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Originally Posted by KMA-628
Look at it this way, using the loaf of bread as an example:
Cost of bread: $1.00
Taxes: $0.20 (using a number I am pulling out of my ass)
Remember: Your income will automatically go up once the plan is put into action, probably in the neighborhood of 18-22%. Also, the cost to make the loaf of bread could very feasibly go down because the manufacturer is wasting man-hours and money on tax compliance. Also, since they have "new" money, it could also be feasibly spent on machinery that will make the bread faster, cheaper, etc.
So:
In relative dollars, the new cost of the loaf of bread (including the consumption tax) could stay at the rate of $1.00--no real cost increas/decrease felt.
Also, your first purchases of $18,588 are tax free. That means, averaged over the whole year, the real cost of the bread could be less than $1.00--a decrease that would be felt by all consumers.
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I don't see how income would rise. On the fairtax.org site, they were stating that prices would most likely remain neutral. This being the case, why would businesses bother to raise wages? Many large companies are currently opperating with excessive capital, and to my knowledge not one of them has decided to increase the workers' wages. Microsoft is one I can think of who have had excess cash for awhile. Instead of raising pay, they gave it back to shareholders in the form of dividends. They also have put forth a plan to buy back approx. 3 billion shares of stock in the next 3 years in an effort to raise the value of their stock. Remember, corporate decisions are based upon whats good for the shareholder, not the employees. Most businesses would likely consider the lower taxes on wages offset by lowering the price of their product (so that when the NCT kicked in the point of sale price is the same) to be enough of a benefit for consumers/employees.