To be honest, I have no idea. A couple people have brought up that FairTax will cause either better health care plans for employees or lower health care payments. I can't figure out how they expect this to happen.
Response:
Under the FairTax plan, purchases of health care services made directly by an individual are subject to sales tax just as they generally must be paid from after-tax dollars today. Health insurance premiums are subject to tax.11 Reimbursements to the insured person are eligible for a tax credit (in effect refunding the tax paid when the individual paid for the medical services directly).12 If the insurance company pays a doctor or hospital directly, the transaction is not subject to tax (since the tax on those medical services is paid by taxing the entire insurance premium that funded the purchase of the services).13 Of course, the most fundamental change is that all participants in the health care industry whether hospitals, pharmaceutical companies, insurance companies, doctors, nurses or other workers pay neither individual income taxes, corporate income taxes nor payroll taxes (including Social Security and Medicare payroll taxes).
Your comment:
I'm not the one saying that prices are going to drop 12% or 18% or 314% like many FairTax advocates are. I don't think that's going to happen at all. What I am saying, even if those claims are true, would a general drop in the level of prices even be desirable? Deflation occurs when prices are declining over time. So any study which says that the prices of goods will drop is implying that there will be deflation, even if they're not using the "D" word
REsponse:
It is economists, nationally recognized, that have said the prices will go down. Federal income and payroll taxes either are or are not incorporated into the prices of goods and services. If they are embedded in prices, their removal will reduce prices. If they are not, then their removal will not reduce prices but instead returns to labor and capital will go up. If returns to labor go up, people will see their after-tax wages increase and asset values will increase since the present discounted value of the new, higher returns will be higher.
If deflation is the word you would prefer so be it. But, I have read every economist's prediction on price drops and have never heard it called the D word.
your final comment:
Final thought: The income tax was originally 3% and only applied to a small segment of the population. Look where it is today. If we enact the FairTax today, what will rates be in a few generations?
Response:
I could not disagree more with this comment. Yes INCOME taxes have gone up. Money taken out BEFORE you spend it. Everyone has become accustomed to this removal of their earning BEFORE they see it. With the FairTax the tax is at the point of each and every purchase! Each and Every! It is so visable that even a one penny increase will cause the same, if not worse, havoc than gasoline prices recnetly surging up. Look how, with their constituents growling at them, the issue of gass prices became front and center. Raise my consumption tax? Not if you want my next vote!
Thank you for bringing the FairTax to the front of your readers minds. Even though it was not your intent, each article, pro or con, helps the cause by raising awareness.
Keep your eyes and ears open for the news on the Orlando FairTax Rally this Saturday. We expect 10,000 to show up! Can you think of another tax proposal that brings people in from all over?
Congress may be slow, they may even be dumb, but they are not stupid!This Car is waiting in the garage gassed up and ready to go. Democrats and Republicans need to climb on board and drive our economy in a positive and new direction with the Fair Tax Legislative package.The Fair Tax has been built from the ground up, it has been test-driven and shared with many researchers, economists, average Americans and American Organizations.Supporters include 560,000 members of Americans for Fair Taxation, 350,000 members of The National Tax Payer's Union, and is outlined as a legislative agenda item of the 6 million member American Federation of Farm Bureaus.Who supports this? How about: -80+ economists in an endorsement letter including economic department heads, professors, former members of the federal reserve, and a Nobel Prize winner (no endorsement letter of any kind for any other tax proposal)
