Inez Tenenbaum, in a TV ad, is making a totally incorrect representation of the FairTax stand of her opponent.
The FairTax would replace income tax with a consumption, or sales, tax. According to many economists, current prices have more than 20 percent of their costs as built-in costs to pay taxes on everything going into the product.
If the FairTax was instituted, competitive pressures should force down prices so that there would be very little, if any, increase in net cost to the consumer, since the built-in taxes would no longer exist.
The plan also calls for a monthly refund check to every American family, equal to the costs of the necessities of life including food, rent, transportation and medical expenses, so that the lower-income families would pay no tax on their cost-of-living expenses, including all withholding taxes.
An additional benefit would be the reduction in costs, which would make our products much more competitive on the world market, keeping jobs here in the United States. This tax proposal has too much promise for Mrs. Tenenbaum to be demagoguing the issue. ...
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