The end result of purchasing a $100 item and sending $23 to the Federal Government is still $100 coming out of a consumer’s pocket and $23 going to taxes, whether that rate is quoted as 23% of $100 or 30% of $77. The same would hold true if a consumer ‘purchased’ $100,000 of income with their time, only receives $65,000 and $35,000 goes to the Federal Gov’t; that could be described as a 54% rate, instead of 35%, when calculated the same way you propose for the FairTax.
I do agree with your section dealing with tax avoidance/evasion, desire for exemptions, and the danger of ending up with both sales and income taxes. I would simply respond this way: We currently have tremendous tax avoidance & evasion behavior with the current system – the FairTax would have the same problem because some Americans just don’t like to pay taxes, no matter what system is used; the bill would need to include provisions which absolutely disallow showing any societal/market favoritism by implementing exemptions (I happen to disagree with the categorization of Education expenses as an ‘investment’ instead of expenditure I would like to see a provision in the bill which, after passage, would cause it to not take effect until after the 16th amendment is successfully repealed.[p] I hope you found this engaging and found some additional points and perspectives to consider. Thank you for your time and for contributing to the public discussion of this topic._z_economics_z_);
