Your article entitled "FairTax - Income Taxes vs. Sales Taxes" left out the major problem with Income Taxes that is resolved by taxing consumption instead - "Embedded Taxes".
These embedded taxes are expenses (corporate taxes, self-employment taxes, gift taxes, capital gains taxes, estate taxes, and accounting fees to calculate their tax burden), and are a major part of the "cost-of-goods" (along with utilities, labor, and raw materials) that must be passed on to the consumer in the form of higher prices, in order to make a profit and stay in business. Embedded Taxes account for 20 to 30% of the retail price of all the goods and services we buy. Under the FairTax, these embedded taxes will be eliminated, and it will immediately "cost" LESS for businesses to produce their goods and services. Profit margins will fluctuate initially but will ultimately stabilize at or near current levels as prices are driven down due to competition in the market place.
Embedded Taxes are the nemesis of the income tax, and are eating away our economy like a cancer. They must be eliminated, and the only way is to eliminate the taxing of income.
This is the major difference between income taxes and sales taxes. Some say that prices will not come down. If this were true, then why aren't their any businesses out their raising their prices by 20, 25, or 30%? The reason is because their competitors would run them out of business by operating at smaller profit margins.
The FairTax is more than just a sales tax. It is an economic stimulus package that will make the USA a business magnet, thus bringing more jobs back home. It will immediately transform America into the best place in the world to invest capital and do business. The Embedded Taxes must go, and the FairTax can make that happen!
