Quote Originally Posted by Jaimecbr900
What's been a buzz word in the last 5-10 years??? OUTSOURCING. Why does outsourcing work? Because in the countries where U.S. BASED COMPANIES send that work to be done there are BIG tax advantages to doing so. From cheap land to the most expensive cost ANY company has......LABOR. Labor costs are the biggest expense any company has that is neither replenishable nor easily expandible. From straight up hourly wages to the truly more expensive insurance and TAXES, the corporate world loses BILLIONS to Labor each and every year. Just as one example, every reputable employer now pays between 3-10% of every single dollar paid to TAXES and Labor related expenses. Remember FICA? Remember Unemployment? Remember benefits/insurance?

Now, offer those BIG companies ....
Ok, let's look at this simply and carefully - once again.

If I as an employer pay you 50K/yr and 10K is taken out for takes, that's 20%. Suppose I give you 50K/yr under the Fair Tax - and we will assume that everything is just as you describe. As an EMPLOYER, I am paying out the same thing, so my prices will not decrease.

I work in a field with LOTS of outsourcing. Taxes are NOT what gets companies to outsource - wage rates are what does that. For example, in the US a IT person going through Accenture may be billed at 90/hr, but when the company want's to lower costs, Accenture will tell them that they can outsource the work for $55/hr to India. Of course, this looks good to the company beacuse they are saving 35/hr. They never ask about taxes - all they care about is being able to report that they cut costs in order to do one thing - met projections and raise the stock price. Accenture compensates by assigning 3 people in place of the one on the project - so you now are paying 165/hr - thus giving Accenture more income and reporting more profit and raising their stock rates. Fair Tax will not alleviate outsourcing, as you are not lowering manufacturing costs. You would see company headquarters move here, since they would not be taxed, that's all.

Another point is new people/groups/companies getting taxed. Let's look at this scenario:
A company make cabinets. They did buy material tax exempt. Now under Fair Tax, they have to pay 23% - because there are no exemptions. It now cost them more to make the cabinets, plus they are paying the same wages to their workers. Finally, shipping services are no longer $100K/yr - due to the Fair Tax collected on services - they jump to $123K/yr. Now tell me, how will the company NOT raise prices? They have no choice, so your 23% raise just got eaten up by higher prices. Even Boortz says that this is not a plan that will save people money.

Also, non-profits like churches will now be taxed, as will all companies and our own federal and state governments. Services will be taxed, like doctors and lawyers. So your simple out-patient surgery that would have run you $1,000 out-of-pocket, will now run you $1,230. That additional $230 might not hurt you if you make $1 million/yr, but for the middle class, that's a large increased cost. If you are in the middle class, not everything is covered my Medicare.


Jaime, here's the thing that I don't understand. Fair Tax is an income redistribution scheme - plain and simple. It's take from the rich and give to the poor. That is a liberal Democratic Party scheme. I thought that you and Leadfoot were both conservatives.