As a general rule, tax/title/license/drive-out prices will change little, if any, under the FairTax. Simply put, the FairTax is a revenue-neutral proposal, raising no more money than does the current system. The FairTax only changes where the money is raised, not the amount. Becuase the FairTax is a zero-sum proposal, it also translates to price neutrality.

Additionally, some erroneously believe that people who have invested in Roth IRAs will never pay taxes on this money again. They may not know it, but with corporate income taxes, they are paying hidden taxes averaging 22 percent (for goods) to 25 percent (for services) on everything they buy. Under the FairTax, they break even from the very beginning because they only pay $0.23 out of every dollar they choose to spend on new goods and services, rather than anywhere from 20 to 30 percent in hidden taxes through their lifestyle choices.

When corporate income taxes are repealed, pre-tax prices can come down an average of 22 percent for goods and 25 percent for services according to Dale Jorgenson, Ph.D., former chairman of the Harvard University Economics Department. Furthermore, used goods are not taxed because they have already been taxed once – when they were new. Therefore senior citizens, like all Americans, do not lose purchasing power, but gain it instead. Government benefits are maintained. Seniors receive a monthly rebate so they don’t pay taxes on the purchase of necessities. Tax-deferred investments get a one-time windfall. Savings invested in any long-term, income-generating asset such as a stock, real estate, or a long-term bond that can’t be called, will increase substantially in value. Finally, complex estate planning is an artifact of an earlier age.