Search FAIRtax.org

Grassroots Corner - November 29, 2019

Grassroots Corner - November 29, 2019
Photo Credit: Jim Bennett by Fairtax is licensed under Original Image
Will The FAIRtax Make
Prices Rise 23%?  No!

Sometimes it’s a good idea to give Grassroots Members coaching points on how to answer questions. We will give one here.

When your audience hears The FAIRtax rate is 23% tax-inclusive, the understandable reaction will be one of alarm, thinking prices will rise 23%.  We’ve chosen to handle the topic a little differently from the way many of you probably learned in the first Boortz book.

Prices will actually not rise 23%  under The FAIRtax - in most cases [assuming no “accommodation” (i.e., money printing) by the Fed, according to Economist David Tuerck.].  And if prices do rise some, your purchasing power will rise more.

The FAIRtax eliminates income-taxes, payroll-taxes and tax compliance costs.  These costs must now be passed along to the consumer in the price of every good and service you buy so the sellers all along the line of production can cover all of their costs and make a profit.  The increase in price for each good or service because of these embedded costs isn't possible to calculate precisely, but we know for sure they increase the final price.

We don’t know exactly how all markets will respond when these embedded taxes and costs go away under The FAIRtax.  But in any competitive industry where suppliers vie for market share, pre-tax prices will drop.  In 1995 when Congress didn’t renew an airline ticket tax, airline ticket prices quickly dropped by the amount of the tax.  When Congress restored the tax, airline ticket prices rose again by the same amount.

One economist believes embedded taxes and compliance costs could average as much as 12.5% of today’s prices.  These embedded taxes and costs would go away under The FAIRtax.  Some prices will reduce more and some will reduce less.  Others believe the average costs will reduce even more than 12.5%.  However, if 12.5% is accurate, and if today’s pre-tax prices drop by 12.5%, a one-time price rise with The FAIRtax of nearly 14% over today’s prices would occur (based on a tax-exclusive markup for The FAIRtax from a pre-tax base price of 87½% of today’s prices).

But if you are employed, you would no longer pay the 7.65% payroll tax (and neither will your employer).  And if your effective tax rate today on your taxable income is 12%, you would no longer pay this tax either.  Your available spending would rise over 24% with The FAIRtax (because the 19.65% in income and payroll tax rates are discounts, not markups), putting your purchasing power over 12% ahead of where you are today.

For those of you on Social Security, there is good news for you, too.  The FAIRtax adjusts Social Security benefits upward to compensate for any increase in the cost of living because of The FAIRtax.  And your income, assuming an effective rate of 12%, should rise just about 14% to match price increases.

Not all of your cash outflow is taxable under The FAIRtax.  Consider taxes, charitable contributions, loan repayments, tuition, used goods, deposits to savings, and investments.

Don't overlook the Prebate because the Prebate also helps households whose members are lawfully residents in The United States.
 
The FAIRtax Re-Empowers you once again to decide for yourself when and how much taxes you pay.




I have prepared a condensed version of this response about 1/2 as long.  Let me know if you want it.  Does anyone else have an idea of how better to explain markets’ response to removal of embedded tax costs and tax compliance costs?





And don’t forget to order your FAIRtax gear from The FAIRtax Logo Store

 
Call For Pictures & WriteUps
 
We need more of you to send in pictures and news.  If you have anything to share, please EMAIL your material to me, text me 908-578-4975, Fax me 908-598-2888.

When others see your activity, they are inspired, and the process snowballs.  When the process snowballs, Representatives, Senators and, yes, even the President start to take notice and listen to Us.


Yours In Liberty!

Jim Bennett
AFFT Grassroots Coordinator & Secretary

Help FAIRtax Get In The Presidential Debates in 2020

Enacting the FAIRtax must be a prominent topic on the Presidential Debate stage. We did it before, we can do it again, but we need your help!

Your gift of $25, $50, $100 – even $1,000 or more if you can possibly spare it – will help FAIRtax.org bring an end to the IRS and promote a FAIRtax. So, I urge you, please give as generously as you can.
To donate by check:
Americans for Fair Taxation
PO Box 4929
Clearwater, FL 33758

If you need to make changes to your existing Monthly Re-Occurring Donation with new card or billing address information, then Please call Adam Yomtov our New York State Co-Director. He is assisting with the administration of our donations, technology services, and website.

Please note: Inputting your new information at our website won't update your donation. The only way to update is by calling Adam Yomtov 917-689-3931 mobile.


Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

Connect

Share