On my way to pick up my son from preschool, I heard a segment on the Michael Medved show where the caller was really tweeked that he got paid $8/hour for caring for the elderly while the auto workers were making $75/hr (probably inclusive of union dues - I just don't know).
He indicated that one way out of the economic problem is to raise the pay at the lower rungs which would put more money in the pockets of the less fortunate to help them pay their mortgages, etc. He wanted to be paid $75/hr for caring for the elderly. This is fine but... in order for this to happen AND for his employer to make a reasonable profit the employer would have to bill out his time at $150/hr. Are the elderly expected to pay this? If not, who?
Part of his argument was that executive management and business owners make millions but he is stuck making $8/hr.
It occurs to me that part of the reason that there may be such a wide gap between what business owners make and what line workers make is that the obstacles to start up a competing business are too great. Any business - big or small - has to have all of their compliance ducks in a row just to operate. These include complex accounting, HR, Income Tax withholding, Payroll Tax Withholding, etc., etc. If these huge obstacles weren't in place, a dissatisfied worker could hang his shingle in the next town and offer his services / products elsewhere.
I heard the term "too big to fail" too many times recently. Level the playing field and we will have no "too big to fail" enterprise organizations and plenty of "if I don't operate efficiently and provide excellent products/services I am going to fail" mid and small-sized organizations.
The FairTax removes these obstacles that alter the free market and allow gross pay inequities as well as enterprise organizations that are "too big to fail". Don't get me wrong... I don't care if one person makes a ton of money... more power to him. That means that he is doing plenty of things right. I would just like that to happen in a true free market system. The FairTax promotes a true free-market system.