In the past I’ve been a big fan of a national sales tax – but now I’m reading The Fair Tax Book: Saying Goodbye to the Income Tax and the IRS and I have to say I’m really a big fan.
Did you know that 22% of the cost for each item you purchase in the U.S. goes towards someone covering the cost they had to pay along the way towards taxes? In other words, if we could cut income taxes, corporate taxes, Social Security taxes, Medicaid Taxes and all the others, retailers could sell products for 22% less than they currently do. Granted you might say like I did, well the manufacturers and such will just keep that 22% profit. But in a free market, with competition the costs will eventually be lowered.
Let’s say MyCar Co. makes a $10,000 car. After the IRS is gone the 22% cost of taxes is eliminated from the cost of making their cars. So MyCar Co. CEO says, “Alright, that’s 22% more profit.”
But YourCar Co. also makes a $10,000 car. And while the CEO realizes he could keep prices the same and make a 22% profit, he also realizes that if he cuts his price by 5% he’ll still make a 17% profit and he’ll be able to take more customers away from MyCar Co.
Suddenly MyCar Co. has to cut prices to compete and then YourCar Co. matches. In the end, your $10,000 only costs $7,800.
Even with a 23% sales tax on your car, the total price would be $9,594.
On top of that, imagine:
Imagine….
Read more at FairTax.org – or just buy the book from the Casa de Blundell Store.
Oh and another thing, there is one presidential candidate who continues to pledge that he will fight to appeal the 16th amendment and institute the FairTax – any guesses?
