Thread: Deduction Limits Pose Test for Donald Trump’s Tax Plan

Originally Posted by JohnDoe2

YOU are a builder.

You are ready to sell the new houses you just built.

You add up your cost of the land, grading, sewer line, water lines, gas lines and electric line to each house in the project and the cost of building materials and labor to build them.

YOU have spent an average of $600,000 per house. (That money is GONE. You already paid everyone.)

You want a profit of $50,000 per house.

The government wants 23% tax. ($149,500)

You have to sell each house for $799,500 to pay all of your bills and taxes and make a profit.

If you sell the houses for $650,000 and send 23% to the government you will lose money.

The costs that you add up will be much less because there are no income tax costs in your costs. Who do you think pays ALL and I mean 100% of income tax, all types, collected by the US government? CONSUMERS. Income taxes are already built into the price and cost of everything because every business includes these taxes in their COSTS and prices. When there are are NO INCOME TAXES in their costs, their costs are lower. The FairTax just replaces the income taxes that existed in our prices and COSTS before the repeal of them and then the FairTax tacks it back on at the final point of sale.

The FairTax is only charged at the end of the production chain at the retail level. There are no FairTaxes along the line, just the one time FairTax at the final point of sale to the consumer. The FairTax is revenue neutral so it generates approximately the same revenue as the income tax, it's just collected in a much easier simpler way.