Comment: They pulled it out of their butts. Really.

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In reply to comment: I hate the fair tax. LOL no (see in situ)

They pulled it out of their butts. Really.

It is based on their assumption formed from a cocktail napkin math problem that they estimate the "embedded" taxes in everything amounts to 23%. (there is an inclusive/exclusive issue, but that isn't really important)

The kicker is their whole selling point is you get to keep more of what you earn. (no withholding at all)

So they claim this means you have more purchasing power of course, and will be better off.

Of course, they admit you won't be paid as much. Actually, your take home will NOT change. Employers will simply pay you less, and then cut prices accordingly because there will downward pressure on prices since labor costs aren't as high.

So they presume, you'll still say take home 20K on gross 30K, but you'll be able to buy MORE because everything will be 23% cheaper.

But then while you are watching the left hand, the right hand is taxing you BACK to the original old retail price. So that $5 value meal will now cost $3.85, but after taxes will still cost $5.

So there is NO net benefit to you.

All that has happened is now they take it at the register than before you get your check.

And once they have the power to tax a retail sale, they theoretically have no limit. They could tax it at ANY RATE they want. If they want to tax it at 75% they could.

And this is before we even get into the whole "welfare" scam that everyone will be on with the pre-bate.

These numbers remember, are not founded on anything more than cocktail napkin estimates.

It's just one big "shoot'n the bull" idea.