The FairTax, Join in!

[Andir]

Final-Fan said:
But that doesn't change the fact that the personal income tax is not one of the taxes contributing to the current price of goods. It shouldn't be, anyway, as far as I can see. So the prices would go up in response to the amount of the personal income tax (and other taxes not currently reflected in prices) being factored into prices.

But it is.  That 22% is what companies pay to accountants and lawyers to maintain IRS compliance.  You take this away and the company has less overhead.  It surely won't reduce the price of goods by 22%, but it reduces the cost of doing business.  The 23% is simply to replace the current bracketted tax system (that collects 28% or more from the citizens.)  In doing so, you reduce both the cost of running a business, and the cost of running the country (by not requiring a full blown team of IRS accountants and support) thus reducing the amount needed to collect in taxes and cut the amount needed to regulate and legislate the handling of money.  Over time, the 23% will likely fluctuate (just as sales taxes do / I'm also assuming this isn't fixed, sorry for the ignorance on this) to grant funding for whatever inititives are set forth or to spur the economy just like the current interest rates do.

So, in summary.  Replace the 28%+ tax bracketed system with a flat 23% tax that will cover the current expenses just as the bracketed system does.  After the current year taxes are collected, next years funding will be at hundreds of billions more agile (lower Treasury funding to cover tax returns), that can be used for things like debt repaying, social security, etc.  You reduce the cost of doing business by removing the tax compliance burden, thus enabling competitive pricing even more, or allowing the hiring of more people.  The next budget meeting would simply be, do we need to raise this flat tax by .1% to bring in more funding or reduce it by .1% to relax spending?

 @Entroper: thanks