Thus, by this theory, my purchasing power should shoot up dramatically, which makes no sense.
Your purchasing power will not shoot up dramatically. There will be little or no change to your purchasing power. The Fair Tax plan is revenue neutral.
It you currently make $50,000 before tax, and take home $40,000 (before state tax), then the $10,000 that you are paying in Federal Tax is part of the 22% embedded tax.
Wages will be based off the employer. They will either continue to pay the same amount that you currently get and the price of goods will be roughly the same. Or, they will pass the tax money they currently pay to you, and prices will go up.
I believe you understand it, quite accurately. The theory of purchasing power shooting up is false. Purchasing power will remain about the same. You can increase your purchasing power by purchasing used products instead of new ones. Some people will not want to do this, some will.
The benefit (for me) is in not having to fill out complex tax returns. But, you could also say because of lack of payroll taxes international companies will have incentive to locate in the US providing more jobs.
Another reason that I like it, is that people that consume more of the earth's resources by always purchasing new products will pay more in taxes then people who conserve earth's resources and purchase more used products.
Your purchasing power will not shoot up dramatically. There will be little or no change to your purchasing power. The Fair Tax plan is revenue neutral.
It you currently make $50,000 before tax, and take home $40,000 (before state tax), then the $10,000 that you are paying in Federal Tax is part of the 22% embedded tax.
Wages will be based off the employer. They will either continue to pay the same amount that you currently get and the price of goods will be roughly the same. Or, they will pass the tax money they currently pay to you, and prices will go up.
I believe you understand it, quite accurately. The theory of purchasing power shooting up is false. Purchasing power will remain about the same. You can increase your purchasing power by purchasing used products instead of new ones. Some people will not want to do this, some will.
The benefit (for me) is in not having to fill out complex tax returns.
But, you could also say because of lack of payroll taxes international companies will have incentive to locate in the US providing more jobs.
Another reason that I like it, is that people that consume more of the earth's resources by always purchasing new products will pay more in taxes then people who conserve earth's resources and purchase more used products.
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