Current Tax System versus FairTax - Price Impact on Common Purchases

DRAFT - FURTHER ANALYSIS NEEDED

$300,000 New Home

Current System Cost Total Cost /

Breakdown Building Materials Transportation Construction Other Services Embedded Tax
Cost $ $120,000 $30,000 $120,000 $30,000 $300,000
Embedded Tax % 23% 24% 24% 26% 24%
Embedded Tax $ $27,600 $7,200 $28,800 $7,800 $71,400

FairTax Cost
Breadkdown Building Materials Transportation Construction Other Services Total Cost / Tax
Cost $ Under FairTax $92,400 $22,800 $91,200 $22,200 $228,600
FairTax Tax $ (23% incl. / 30% excl.) $68,580
Total $ $297,180

$30,000 New Car

Current System Cost Pre-assembled Transportation Total Cost /

Breakdown Raw Materials Components Manufacturing and Dealer Embedded Tax
Cost $ $4,500 $7,500 $12,000 $6,000 $30,000
Embedded Tax % 23% 23% 24% 24% 24%
Embedded Tax $ $1,035 $1,725 $2,880 $1,440 $7,080

FairTax Cost Pre-assembled Transportation

Breadkdown Raw Materials Components Manufacturing and Dealer Total Cost / Tax
Cost $ Under FairTax $3,465 $5,775 $9,120 $4,560 $22,920
FairTax Tax $ (23% incl. / 30% excl.) $6,876
Total $ $29,796

$300 Car Insurance Payment

Current System Cost Insurance Total Cost /

Breakdown Services Embedded Tax
Cost $ $300 $300
Embedded Tax % 26% Err:522
Embedded Tax $ $78 Err:522

FairTax Cost
Breadkdown Raw Materials Total Cost / Tax
Cost $ Under FairTax $222 Err:522
FairTax Tax $ (23% incl. / 30% excl.) Err:522
Total $ Err:522
 $200 Basket of Groceries

Current System Cost Agricultural Prepared Food Total Cost /

Breakdown Products Products Transportation Retail Services Embedded Tax
Cost $ $40 $80 $20 $60 $200
Embedded Tax % 22% 23% 24% 26% 24%
Embedded Tax $ $9 $18 $5 $16 $48

FairTax Cost Agricultural Prepared Food

Breadkdown Products Products Transportation Retail Services Total Cost / Tax
Cost $ Under FairTax $31 $62 $15 $44 $152
FairTax Tax $ (23% incl. / 30% excl.) $46
Total $ $198

$200 Visit to the Dentist (w/ 30% Tax Deduction)

Current System Cost Medical Tax Total Cost /

Breakdown Dental Visit Deduction Embedded Tax
Cost $ $200 -$60 $140
Embedded Tax % 27% 77%
Embedded Tax $ $54 $0 $54

FairTax Cost
Breadkdown Dental Visit Total Cost / Tax
Cost $ Under FairTax $146 $146
FairTax Tax $ (23% incl. / 30% excl.) $44
Total $ $190

$100 shirt and pair of pants

Current System Cost Total Cost /

Breakdown Raw Materials Manufacturing Transportation Retail Services Embedded Tax
Cost $ $30 $20 $20 $30 $100
Embedded Tax % 23% 24% 24% 26% 24%
Embedded Tax $ $7 $5 $5 $8 $24

FairTax Cost
Breadkdown Raw Materials Manufacturing Transportation Retail Services Total Cost / Tax
Cost $ Under FairTax $23 $15 $15 $22 $76
FairTax Tax $ (23% incl. / 30% excl.) $23
Total $ $98

* Embedded Tax % rates estimated by economic analysis performed by Dr. Dale Jorgensen, former chairman of the
Harvard Economics Department

DRAFT - FURTHER ANALYSIS NEEDED