THE FAIRTAX BEATS THE INCOME TAX HANDS DOWN

How can a home be as affordable to a homebuyer after the FairTax as it is under our present income tax system? Below is an example of the total costs of buying a new home comparing the FairTax with the income tax. There is a chart in the FairTax website: http://www.fairtax.org/ that shows this better than I can. I am not computer-literate enough to transfer the chart without it going belly-up on me. There is comprehensive information under the research section of this website, much more than I can include in this blog. So if this subject (real estate) is of particular interest to you, please go into the website and read the entire content. I have just given you a brief overview during the last couple of days.

The example shows a new home purchase price of $153,800 and a break-down of the total costs over the 27 year life of the loan. With the income tax, payroll taxes on interest and principal, the total taxes comes to $66,851. With the FairTax, only $46,140. Total housing cost including taxes: with income and payroll tax system, $377,790. With Fair Tax and a 25% mortgage interest rate drop: $312,099. Which sounds better to you.

The Fairtax completely untaxes preexisting homes. Homebuyers can buy a used home with pretax dollars. With the present income tax system, they have to use after-tax dollars, PLUS they bear the burden of all the embedded taxes that went into the building of this home: timber producers, lumber mills, construction material supplies, etc. These costs are passed through time and again as part of the “value” of the home. This is why used homes are not taxed with the FairTax; they have been taxed and taxed and taxed…………..and nobody realizes it.

A new home is only taxed once, at the point of purchase. There are no embedded taxes along the way because the builder bought the materials without being taxed. Taxes are taken at the consumer end, not all throughout the building process. The tax is paid once, and only once, so the prices are kept lower over the long haul.