With the Fair Tax - it eliminates embedded taxes and has no tax on used goods right? But...?

Question

...on the same account, if the tax will only be on new goods, won't this trickle into the cost of used good essentially making used goods have an "embedded" tax?

I really do not like the verbiage and semantics the fairtax people provide. Why can't they just be straight forward that all the same amount of taxes will be collected, just in a different manner?

Answer 1

You are correct that the tax is only on new goods.  And yes that would likely affect the cost of used goods, since they'd be more desirable since they wouldn't be taxed.

There are a ton of issues with the "fair tax" that make it unworkable, and not "fair".  The books purporting to explain away the objections tend to just set up straw men and knock them down, while glossing over the real issues.

Answer 2

Fair tax will shift the burden around.  You would probably pay more than you do now.

Answer 3

The Fair Tax applies to NEW goods at the retail level.  The government should not be taxing items twice, therefore no federal taxes applies to used goods.  This will have an effect on the price of used goods as more items will be resold (buyers who do not want to pay any tax.)  It will not add an embedded tax to used goods, just more profit for the seller!

The Fair Tax changes the basis of how the tax is calculated.  The current income tax is based upon income (penalizes the individual for doing a good job with earnings, investments or savings) while the Fair Tax is based upon how you spend your money (not what you earn).  You control how much tax you pay.  The politicians do not take the money from you before you even receive it!.

Answer 4

Taxes are already embedded. Every layer of sales have embedded tax ( income tax ) Taxes would only be charged on new items. No income taxes paid by you, the company you by from of the plant that makes the parts.

Read the book! The Fair Tax by John Linder & Neal Boortz & Answering the critics by the same. Lots of straight netural.

Answer 5

Fair Tax is an oxymoron.

All tax under all systems of taxation (including "fair tax") has its element of being unfair.

Answer 6

I do not believe you have read the book on the fair tax.  It will answer all your questions.