THE MAD DASH TO CONSUME PRIOR TO ENACTMENT OF THE FAIRTAX

Some retailers are worry that the public will rush to purchase durable goods without tax before the FairTax goes into effect. After the FairTax is put into place, retailers fear there would be a compensatory drop in consumption of equal magnitude. A study on this subject shows that (worst-case scenario) the retailers can expect a drop in consumption of 1.15% the first year. By the fourth year and every year thereafter (this was a 10-year study) consumption will be higher. This would amount to a minimum of 3% growth in the economy in the 10-year period than it would have under the present income tax. Again, this is worst-case scenario. Even if growth is reduced the first year, retailers will be more profitable because of the repeal of the income tax and lower compliance costs.

This ends my dissertation on the Impact of the FairTax on Businesses. There is much more in-depth information available in the research section of www.fairtax.org. Since businesses are going to bear the brunt of collecting this tax, I thought it necessary to enlighten both businesses and consumers as best I could.