Hauser's Law, or, How I Came to Love 9-9-9.

vanity | 10/13/11 | Ziravan

[ziravan]

Hauser's Law is an extension of the Laffer Curve (Art Laffer supports 9-9-9): "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP."

The 9-9-9 plan is a bridge to the Fair Tax. A consumption tax is the ideal Republican tax. It is the least progressive tax and it ensures that everybody 'pay their fair share'.

One of the chief complaints here on FR about the 9-9-9 plan is that is introduces a NRST without eliminating the income tax. What's to stop some future Congress from turning it into 20-20-20?

Hauser's Law.

Not only is a consumption tax a more broad based and transparent tax that will make it difficult for politicians to raise, raising it to high levels would be counterproductive: the result would be to hamstring economic growth without significantly increasing taxation.

The ingenious thing about a consumption tax is that YOU control your rate of taxation by controlling consumption. The higher that tax, the more consumption avoidance.

In short, a consumption tax will be hemmed in between Hauser's Law and Say's Law (production creates its own damand).

It's time that Republicans take a chance on throwing out the book on taxation and beginning to replace it with a consumption tax. It is our ideal tax.

It's really none of the government's damn business how much money I make.

[ziravan]

Texas' economic miracle is based on a de facto Fair Tax: its main tax is sales tax with no income tax. A chief draw for business is low regulation and no income tax.

If we want to bring Texas' miracle national, the vehicle to do so is a consumption tax, just like Texas uses.

[avacado]

"A consumption tax... It is the least progressive tax ..."

Just to be clear, there is nothing "least progressive" about a consumption tax. It's a regressive tax.

[Elendur]

Herman Cain explaining the FairTax.
http://www.youtube.com/watch?v=_lMmEhffs3k&feature=player_embedded

Phase 2 of Cain’s 999 plan: The FairTax!
http://www.freerepublic.com/focus/f-news/2791979/posts?page=1

[taxcontrol]

At current spending levels, 9-9-9 needs to be more like 15-15-15. We need to cut spending ... drasticly. Not saying a change in the tax code is not due. Just pointing out that our current problem is caused by spending.

[MNJohnnie]

Yea and a “progressive” tax that robs some people and leaves others getting a free ride is so desirable. /s

[MNJohnnie]

At current spending levels, 9-9-9 needs to be more like 15-15-15

Which is why 9-9-9 with a balanced budget amendment forces the massive cuts you desire. Govt doesn't have the revenue to continue the spending at current level and cannot barrow the difference. Why is it Conservative never learn the lesson? No amount of spending cuts will fix the problem. We been chasing the same notion for 40 years. It never works. How about we try something different this time? Merely cutting spending is addressing the symptoms, not the disease. The disease is the build in incentives for spending in our current tax code. No matter how much you cut, the spending always comes back. Until you control the revenue side, you will never control the spending side.

[Marie]

“Just to be clear, there is nothing “least progressive” about a consumption tax. It’s a regressive tax.”

This is EXACTLY what the democrats are saying.

Regressive tax is the opposite of a redistributive progressive tax.

[Mase]

Spending absolutely needs to be cut, but the revenue shortfall we're experiencing is due mostly to a moribund economy. Overhauling the tax system could solve the economic part of the equation. Congress will, at some point, have to deal with the spending part.

Can Herman Cain supply the leadership necessary to do both? Hell if I know. I do know that he'll have to win in a massive landslide if 9-9-9 is going to have any chance of seeing the light of day.

[greeneyes]

As long as the income tax exists, politicians can always drum up support to tax the rich. Consumption tax has a some definite benefits, but it is a no go for me until the amendment allowing the income tax is repealed.

A sales tax is also regressive, and I am not in favor of taxing necessities such as food, housing, and medical supplies.

[avacado]

Yea and a “progressive” tax that robs some people and leaves others getting a free ride is so desirable. /s"

I'm not arguing the merits of either type of taxes. Just giving the technical definition of the consumption tax. No sense in being ignorant about types of taxes.

[rockrr]

Two words: “Empowerment Zones”

[Roninf5-1]

At current spending levels, 9-9-9 needs to be more like 15-15-15

Once Cain imposes his national sales tax (what kind of conservative wants a new federal tax anyway?) at 9 percent whose to say future Congresses won't raise it to 15 or 20. Or raise it to 30 for the "rich" or 0 for the yutes. I love how so-called small government conservatives give Republicans a pass when they create all these new government taxes and programs, Nixon created the EPA, Bush created the DHS, and then they act all surprised and angry when Democrats use those same agencies to go after the American people.

[factoryrat]

While various tax schemes may work at the state and local levels, any attempts to change the tax codes at the federal level will be met with vicious resistance. As long as people can game, cheat, exploit, and profit from our current “progressive” tax code, nothing will change. As an example, I asked a person I worked with, who prepared tax returns part time, what he thought about a flat tax, or the fair tax concept. His reaction was predictable; He went ballistic on me about how much that would ruin so many accountants and tax industry people.

The point too many people have a lot at stake by maintaining the status quo, so any suggestion of stopping their gravy train will be met with fierce resistance at best, ruin at worst.