Don't count on embedded tax being removed! - Reader comments at The New York Sun

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FairTax's Plausible Solution
in response to reader comment: A good start, but no discussion of embedded taxes misses the biggest point

Submitted by Bruce Barnes, Jan 12, 2008 01:45

Take a simple example we can all understand like a gas station that sells gasoline to a customer and that customer pays the $3.00 at checkout, before adding any state or local taxes. Let's look at that $3.00 price a little closer, as far as everything that is contained. Employee wages and benefits, building rent, utilities, computers, software, store equipment, replacement, repairs, returns, inventory shrinkage, store profit, AND yes, the Gasoline itself. Over 60 % of the oil consumed in this country is imported at a global price. Oil companies that sell US produced oil can produce that oil at a much reduced price but they still sell it at the global rate. If oil companies did not have to pay any federal tax they would still sell that oil at the global rate. There is not anything in the "fairtax" bill to compel any company to reduce their prices.

There may be the $.23 embedded federal tax but I would not count on it being removed at the checkout counter.

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Other reader comments on this article

Comment	By	Date
Dear Ms Diana Furchtgott-Roth Thank you for your positive "Opinion" of January 9,2008 on the FairTax possibilities and the impact it... [MORE]	Joseph LeBlanc	Jan 12, 2008 01:46
Over 60 % of the oil consumed in this country is imported at a global price. Oil companies that sell... [MORE]	Bruce Barnes	Jan 13, 2008 01:36
I love the idea of the FairTax so much I've been staying up and posting in forums discussing it. What... [MORE]	dculling	Jan 11, 2008 06:47
"FairTax" definitions: Used property – defined as property on which the federal sales tax has been collected already, and property that... [MORE]	Bruce Barnes	Jan 12, 2008 01:02
Will the IRS really be gone? The IRS is uniquely qualified to administer the Fair Tax with people, computers, and... [MORE]	Bruce Barnes	Jan 10, 2008 23:46
The Consumption Tax will replace personal taxes of 60 % of the budget and also another 40 % to raise... [MORE]	Bruce Barnes	Jan 10, 2008 23:43
A consumption tax could garner more support if services/labor were taxed at a lower rate than new products. More US... [MORE]	Kristin	Jan 10, 2008 23:19
Ms. DIANA FURCHTGOTT-ROTH, I just read your article. I am impressed by the strong argument you made for investigating the fair... [MORE]	Ed Harrison	Jan 10, 2008 09:42
Take a simple example we can all understand like a gas station that sells gasoline to a customer and that...	Bruce Barnes	Jan 12, 2008 01:45
Thanks for your accurate and thoughtful discussion of the FairTax. I support this proposal and believe the American People will... [MORE]	Rodger Gamblin	Jan 10, 2008 05:00
If the government no longer has the payroll of the multi-thousands of IRS employees and each of these people becomes... [MORE]	mjwhite	Jan 9, 2008 17:35
All the discussion to now has been on the internal effect of the FairTax but the international issues also deserve... [MORE]	Dewey715	Jan 9, 2008 14:00
The fairtax pushes the tax burden to the middle class. It eliminates middle class tax deductions like the mortgage interest... [MORE]	FairTaxFraud Institute	Jan 9, 2008 06:56
The FairTaxFraud Institute is putting out derogatory information about the FairTax to protect their vested interests in the current tax... [MORE]	Tom Kropewnicki	Jan 10, 2008 11:41
Consider: "The fairtax pushes the tax burden to the middle class. " Considering the prebate provisions of the Fair Tax... [MORE]	David Patterson	Jan 10, 2008 14:50
To add research basis to Mr. Patterson's perceptive rebuttal, I offer the following: Over time, the FairTax benefits all income groups.... [MORE]	Ian Repley, Ann Arbor	Jan 10, 2008 20:41
The FairTax Act of 2007 (HR 25 / S 1025) represents a prospective power shift of massive proportions in America.... [MORE]	Ian Repley, Ann Arbor	Jan 9, 2008 04:52