Hi Doug, That was a good question you asked about the rental end of the FairTax. And I'll be honest with you, I didn't feel qualified to answer the question. So I contacted our state director (Steve Curtis-Ohio) and he sent me a response and an attachment. Here is his response;
Don't forget, the property owner no longer has to pay taxes on their income,
or pay embedded taxes when they hire work done, purchase remodeling
materials, etc. In other words, the FairTax works here as well. The "950"
is no longer what the property owner needs to charge in order to maintain
their profit on the property.
I have attached a write-up I did a few weeks ago. Let me know if it helps.
I hope you find his explanation and the attachment useful.
Rental rates are determined by amount of the mortgage, property taxes, utilities if included, cost of repairs and a contingency fund. Presently I rent a house for $950 a month and as the owner I can not lower the rent. under fair tax I have to let my tenet absorbed the cost of fair tax. my mortgage rate on this house is already below 5%, I do my own repairs, and my contingency is only $50 per month.
you stated i no longer have to pay income taxes, Is that not supposed to be for me to have more of my income, for me to enjoy, not to subsidize the rent of someone else out of my own pocket.
you stated i no longer have to pay embedded taxes when I hire work done, purchase remodeling
materials, etc. correct I now have to pay the 23% inclusive embedded sales tax, thus NO SAVINGS HERE. The Fair tax people say prices will remain about the same.
So please tell me exactly how am I supposed to lower the rent $283.77
So I guess you didn't like the answer? Well, we tried. Just one thing. As the owner of that property, its up to you how much you charge for rent. And as your costs go down, you can adjust your rents accordingly. Also, some things won't go down 23%. That's an estimated average.
Your usage of the words inclusive and imbedded is incorrect too. The FairTax is an not imbedded. That is why when you go to the store under the FairTax, you'll get a reciept that shows any taxes you are actualy paying and you won't have the imbedded (hidden) taxes to pay. Remember, the imbedded taxes are taken away (that's why its a wash).
Hope you'll research this some more and maybe have a little more back and forth discussion.
used the word embedded because the price on the shelf includes the fair tax in it. the definition of embedded is not " hidden" it is " To cause to be an integral part of a surrounding whole:" the tax is integral part of the price. Yes it is inclusive and I know that. It wasn't that I did not like your answer. It was that I gave you the circumstances of my situation And for you to show me where I could lower the rent. Your first post was ambiguous and I showed you where that was. You on the other hand apparently didn't like my response so you start by assassinating my use of words when in reality you are wrong, in your usage. But the coupe de grace was you didn't even answer my question. Now if yo can not answer the question please just say I can't. You had already stated earlier that "You" did not feel qualified to answer. All Steve Curtis gave you was the overall outlay/ rhetoric, of the Fair Tax. There are cases where FT will hurt some people and this is one of them. If I am wrong have Steve Curtis use my previous post and show me where I can lower the rent.http://www.synonym.com/synonyms/hidden/ note embedded is not a synonym of hidden
Maybe they don't make out as well as a homeowner, but they still make out better under the FairTax. I'm glad your for the FairTax. I'm still going to forward your message onto our state director and see if he wants to respond. Perhaps I didn't convey the message in the right way. Your own words may bring the response you seek. By the way, I thought "assassinating" was a little strong, but I can live with it (lol).