Posted on 12/17/2004 4:38:48 AM PST by JOHN W K
1. on Page 140: "... to the existing federal income tax system? The popular perception is that the introduction of a national retail sales tax (NRST) or a Hall-Rabushka type flat tax (FT) in place of existing federal income taxes will significantly increase the tax burden ..."
Yep that is often the "popular conception" alright, only in a revenue neutral situation the NRST only replaces one tax with another without adding to overall tax burden. There is the the exception of course for for the flat tax with its higher costs imposed at multiple levels of production as compared with the NRST with taxes imposed only once at the retail sales level for final use or consumption of new goods and services.
The NRST is not collected on purchases of goods or services for business use unlike the business income tax, Business Transfer tax and flat tax situations where all businesses get a financial hit just trying to arrange to avoid paying more taxes than they are required to. Indeed the overhead costs associated with dealing with those taxes are often a greater burden on business than the tax that is actually remitted to government. Unfortunately the ability to report a paper loss in avoiding a federal tax still engenders the overhead costs of realising that paper loss condition or whatever other mechanism is used to reduce a corporate tax bill, even to the extent of the costs removal of headquarters to foreign tax havens. The extent that businesses and individuals go to avoid that next increment in tax payment is sometime amazing.
Of course popular conception often has little to do with reality. and your elipsis at the begining and end of this statement leave one wondering what is said about perceptions other than the popular one.
I'm sure we will will find out in do course, and how NRSTs & Flat taxes rate against the existing federal in come tax system.
"Belief and sincerity do not define truth; it exists despite belief and sincerity."
- Joshua David Mather
2. on Page 141: "... and increase the real wage. Third, estimated consumption by income level is used to allocate the tax burden of an NRST. Although this method is in accord with the procedure used by other studies of an NRST, it conflicts with the ..."
Nice to know real wages increase rather than decrease under an NRST. Hmmm, you have held in the past that wages must decrease with NRST and consumption taxes. I find it more likely that wages remain unchanged unless there are substantial reasons to beleive that additional production capacity is needed to increase the demand for more workers and more hours worked by those who are employed. Then one might expect some upward pressure in wages to attract the necessary work force to sustain increase production, paid for of course out of economic expansion that occurs with a growing consumer demand that underlies rising production in the first place.
3. on Page 142: "... basis of long-run allocative and distributional factors.
Tell us, is that one continuous sentence from Page 141 above in the book, or are you indicating something missing in between with your elipsis? helps to keep things together and in context.
There is greater administrative familiarity with the VAT and FT than with the NRST.
Indeed this is true. Which leaves long-run allocation and distributional factor tables somewhat questionable in regards an NRST. Especially seeing that distributive static analysis has a lousy history of success in predicing anything concerning changes in taxation methods.
Indeed, some skeptics (Slemrod, 1996, and Gale, 1998b) argue that a high-rate NRST could not be administered effectively. Accordingly, the ..."
Well we do know about Gale and Slemrod, and the fact that Gale especially streches things just a tad bit in his Brookings papers, in not recognizing that NIPA:GDP measures exclude current income/payroll tax evasion as the activities of such are not reported to government to be recorded thus any tax rate based on NIPA measures discounts at least the same amount of tax evasion as the current tax code does. In fact Gale tends to overlook and stretches a lot of little things in his articles to create a tax systems that no Congress would ever enact. Of course the Selmrod was abit ahead the Fair Tax Act in '96 with analysis that is not related in any substantive way to the actual provisions of HR25 which did not see its debute until '97.
In fact the main thrust of the Selmrod '96 paper was to replace the current corporate income tax system with a VAT, not a particularly palatable situation, and actually would be no better than the current corporate tax system in preventing evasion of income and payroll taxes now. Most of the evasion occurs with the single proprietor and small business sector in the current system, there is no reason at all to believe that would change any under a VAT or Flat Tax looking at the Experience of the European Union and their 15-35% of GDP evasion/underground economy rates.
As the European experience is demonstating in spades, administering VATs is no mean little trick, with evasion rates apparently much higher than they or in any of the US retail sales taxes or even the Federal income/payroll tax system with its ~ 15% of GDP underground economy.
4. on Page 143: "... $540, and government expenditures or consumption are equal to $60. The replacement of a PCT of 10 percent with a NRST imposed at a tax-inclusive rate of 11.11 percent would have no real effects.
Interesting statement, I assume a PCT = Personal Consumption Tax, levied with the hapless citizen having to file reports with an IRS subtracting savings and investments from gross income to derive a the equivalent of a consumption tax base. Not exactly a no cost situation for the hapless citizen, certainly as compared to the NRST where only business in retail sales collects and remits the NRST along with any state sales tax to state tax administrators. The little guy just pays a the register and that is the end of his liability to the tax system.
The nominal price of consumption goods increases ..."
Interesting statement if the nominal price of consumption goods increases, and no real effects occur as a consequence of "replacing a PCT with an NRST imposed at a Tax-inclusive rate of 11.11 percent". Makes one wonder what comes after "The nominal price of consumption goods increases ..." doesn't it?
The statement seems abit disjoint as costs to upstream and intermediate businesses fall with repeal of income & payroll taxes, when the are replaced with a single stage tax at final retail sale releasing alot of dollars and resources to productive use instead of overhead costs. That is especially true for the NRST due to its high visibility and the removal of the high marginal tax rates that exist on wages removing the implicit subsidy encouraging leisure and consumption as opposed to demand for additional income to enhance one's taxfree savings & investment.
Of course if we are talking about Business Transfer Tax(a substraction method VAT) or a Flat tax which is essentially a wage tax with a BTT, and PCTs we would see rising prices where business costs rise in attempt to recover any additional cost factors associated with VATs, with the upward price pressure arising from increased consumption that is encouraged by removal of tax from individual savings and investment returns without comensurate incentives to put the tax moneys released back into investment or savings as the BTT & business Flat Tax tend to be perceived as paid by business in the eyes of the consumer.
5. on Page 145: "... the current period by persons in proportion to their current consumption just as it is under the PCT or an NRST. All consumption- based tax systems (PCT, NRST, VAT, and FT) are equivalent for each individual on a period by period ..."
At least insofar as revenues extracted by goverment.
However the exceptional visibility of the tax in the case of the NRST, and release of taxation from business enterprises create substantive modification of economic behaviours in both business and the consumer. Consumer being encouraged to save and invest taxfree, as opposed to the perceived tax on new goods and services. While businesses realise cost reductions from repeal of all business income and payroll taxes allowing them to reduce pricing to compete both with the desire of the Consumer to invest rather than spend, and other businesses looking to maintain profitibility through lowering prices to attract demand for goods away from competitors as well as attract dollars heading for those savings accounts.
6. on Page 146: "... project. Only the risk premium p is taxed under this response to the accelerated depreciation associated with expensing.
What project, what response?
Under the NRST, PCT, or FT the returns to risk taking, economic rents, above-normal earnings to entrepreneurial activity, and other investment activity will ..."
will do what??
7. on Page 154: "... tax burdens on the rich will be reduced if the present personal taxes were replaced by either the FT or NRST. Analyses in Which Consumption Is Used as a Proxy for Lifetime Income Poterba (1989, 1991) was the first to use ..."
Gee terrible, terrible, to have the rich bear lower burdens, interestingly the percent tax burden on all income levels under an NRST are reduced in respect to income/payroll tax systems due to greater economic efficiency at which the economy operates and grows, thus a lower percentage of GDP & personal income for the same revenue going to government.
8. on Page 157: "... rather than 16 percent." Feenberg, Mitrusi, and Poterba (1997) also use CES data to calculate the effects of implementing an NRST. They link the consumption data from CES to a more detailed income tax data base. The latter data set has ..."
Unfortunately the calculations in the Poerba paper were abit off of mark according to later remarks by Jim Poterba concerning them, for one the baseline tax law used for the NRST of that study was 1991, the initial baseline calculations for the Fair Tax Act was '94 with a number of provisions implemented in the AFT proposals that expand the consumption base about 50% greater than that used in the Poterba study. All in all the '98 Poterba study was interesting as far as a narrow tax base retail tax, but of little use in regards conclusions about AFTs Fair Tax Act.
It was alse noted by the Poterba '98 paper (NBER WP 5885 pp 19) on this subject that there is an extreme descrepency in income reporting in the low income brackets. Poterba could not attribute it to spending out of savings (same distribution of folks had little savings to report either). The surmise was that at the low end of income rankings of the Consumer Expenditure Survey(CES) one finds substantial unreported income most probably from underground cash economy, ratios of estimated expenditure to reported incomes run as high as $4.61 expenditure for each dollar of reported income at the less than $5k income ranking. That makes for little confidence in what is actually happening at low of distributions. The high end, according to Poterba '98, also appears to have significant errors associated with the broad top end ranges making distributive tables questionable as far as saying much about incomes and expenditures over $100K.
In between, is anyone's guess as far as I can see with a mixture of problems associated contributing to the large error factors that are always the rule with distributive-microeconomic analysis.
9. on Page 158: "... 1.4 percent ranked by consumption is estimated to have its taxes increased by 30 percent by the introduction of an NRST. Intertemporal Lifetime Approaches to Distributional Analysis Studies of the distributive effects of taxes based on the distribution of income for ..."
It would be of interest to know 1.4% of what ranked by consumption. And whether that is in upper range or lower range of whatever distribution is being referred to. Especially being based in CES data as implied in 8. page 157 above. knowing what the basis is critical to any understanding of this statement.
10. on Page 160: "... the current federal tax system.
Would be nice to now what they have to say about the current federal tax system. After all that is what one wishes to make comparisons against.
Our objective is to estimate the short-run distributive impact of substituting a fully comprehensive, single-rate NRST for the major federal taxes on personal income, estates and gifts, corporate profits, and payrolls . The estimates are based ..."
Nice objective but estimates based on what?? An NRST based on an artificially constructed taxbase not matching that of the provisions of the Fair Tax Act distorts and invalidates the results of any analysis. Garbage in, garbage out is always the rule.
11. on Page 161: "... coupled with a demogrant, indexation seems an overly generous means of protecting recipients of transfer income from the payment of NRST.
Once again the statement seems abit disjoint, so I assume the elipsis indicates that there was something between the statement above on page 160 and the pick up on 161. One always wonders in such situations.
However, we'll take it as it stands and guess that pretty much depends on how the recipients view having benefits taxed away where those benefits today are not subject to individual income or payroll taxation.
Since base product prices the Cost of Living Indexes as now constructed most assuredly would not reflect for the repeal of income & payroll taxation, to not index with the NRST inplace of the embedded tax burdens removed, would appear to be much more problematic. Poterba '98 suggested that the current CPI be adjusted by adding in individual income & payroll taxation as a cost, then any varience would be totally compensated across transition by removing the effective income/payroll tax rate and replacing it with the NRST rate.
To me that makes excellent sense and would minimize transitional problems in transfer payment indexing as well as Cola's that are used throughout the public and private sectors.
Estimating the Distribution of Tax Burdens under the Current Federal Tax System The basic source of data on the characteristics ..."
Another of those elipsis that would be nice to fill.
12. on Page 176: "... burden on low-income groups. One of these provides for a rebate on Social Security taxes. If the adoption of an NRST results in an increase in absolute prices, this is equivalent to the indexing of Social Security benefits for inflation. This ..."
Well since bothe the social security and medicare payroll taxes are repealed undee the Fair Tax Act, obviously this assumption is abit of mark to say the least. Not to mention the assumption that there would be an increase in prices with business competing for the consumer's dollar with both other businesses and taxfree savings and investment of the dollars.
13. on Page 177: "... at incomes below $25,000, although they are smaller than for the existing tax system and significantly smaller than for an NRST without any tax relief. The important point is that it is possible to design a demogrant system that will lower ..."
although what are smaller than for the existing tax system? elipsis again.
Since the Fair Tax Act obviously does provide substantive tax relief with its FCA demogrant at incomes below $25,000, this statement goes nowhere. Another case of garbage out apparently.
Looks like I'll just have to go borrow a copy of your book for a while. to see what was left out with all the elipsis. Though the appearence would be that the Chapter really says little of substantance pertaining to the the provisions of the Fair Tax Act as implemented in HR25.
If so, I am at a loss to fit such a tax into the delegated taxing powers granted to Congress by the constitution.
Guess you'll just have to resolve your problem on your own.
Constitution for the United States of America:
- Article VI: "This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding."
- Article I Section 8: "The Congress shall have power to lay and collect taxes, duties, imposts and excises,
to pay the debts and provide for the common defense and general welfare of the United States;
but all duties, imposts and excises shall be uniform throughout the United States; "
- Article I Section 8: "To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof."
A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
DUTIES. In its most enlarged sense, this word is nearly equivalent to taxes, embracing all impositions or charges levied on persons or things;A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
EXCISES. This word is used to signify an inland imposition, paid sometimes upon the consumption of the commodity, and frequently upon the retail sale.
A LAW DICTIONARY
by John Bouvier, Revised Sixth Edition, 1856:
IMPOSITIONS. Imposts, taxes, or contributions.
can you give an example of such a tax being applied during the contemporary time our constitution was being framed and ratified?
- Nothing, therefore, can be more fallacious than to infer the extent of any power, proper to be lodged in the national government, from an estimate of its immediate necessities. There ought to be a CAPACITY to provide for future contingencies as they may happen; and as these are illimitable in their nature, it is impossible safely to limit that capacity.
- ``A CONCURRENT JURISDICTION in the article of taxation was the only admissible substitute for an entire subordination, in respect to this branch of power, of State authority to that of the Union.'' Any separation of the objects of revenue that could have been fallen upon, would have amounted to a sacrifice of the great INTERESTS of the Union to the POWER of the individual States. The convention thought the concurrent jurisdiction preferable to that subordination; and it is evident that it has at least the merit of reconciling an indefinite constitutional power of taxation in the Federal government with an adequate and independent power in the States to provide for their own necessities.
Hylton v. United States(1796), 3 U.S. 171
"A general power is given to Congress, to lay and collect taxes, of every kind or nature, without any restraint, except only on exports; but two rules are prescribed for their government, namely, uniformity and apportionment: Three kinds of taxes, to wit, duties, imposts, and excises by the first rule, and capitation, or other direct taxes, by the second rule. "
PACIFIC INS. CO. v. SOULE, 74 U.S. 433 (1868),7 Wall. 433
- "Congress may prescribe the basis, fix the rates, and require payment as it may deem proper. Within the limits of the Constitution it is supreme in its action. No power of supervision or control is lodged in either of the other departments of the government."
I would suggest you go somewhere off into the hinterland and take a nice, long, quiet vacation. It would do wonders for your perspective upon life.
Which brings this discussion to a close.
It looks like he's starting with 18.4% (and it goes up from there) and I don't see a demogrant in the details. That's not the FairTax.
Nice try but no go. The tax modeled were indeed the Fair Tax Act provisions, simulated to estimate the revenue neutral rate for the Fair Tax Act, against the taxlaw in place during the Clinton Administration.
Jorgenson's model is limited and the results are flawed, particularly in the short term.
LOL well then we'll just take a look at the long term limits as they compare to those short term ones:
5.Since producers would no longer pay taxes on profits or other forms of capital income under the NRST and workers would no longer pay taxes on wages, prices received by producers, shown in the sixth chart,would fall by an average of twenty percent.The seventh chart shows that industry outputs would rise by an average of twenty percent with substantial relative gains for investment goods producers.
6.In the long run producers’ prices, shown in the eighth chart,would fall by almost thirty percent under the NRST.In addition,the shift in the composition of economic activity toward investment and away from consumption would drastically redistribute economic activity among industries.The ninth chart shows that production would rise in all industries,but the increase in production of investment goods would be relatively greater.7.The imposition of the NRST would produce a sharply higher tax rate on consumer goods and services, but the tenth chart shows that the initial consumption tax rate would be twenty-three percent at both federal and state and local levels or only 18.4 percent at the federal level. This would gradually rise over time,but remain below thirty percent or 23.8 percent at the federal level.
And that is in comparison with tax law as it stood in 1996. Over a charted 25 year range from 1996 through 2020 the numbers look quite consistant. Don't see a problem other than the NRST rate does appear abit high to my liking.
Fortunately tax laws manage to change with new administrations, so the NRST rates will be even lower with the current set of tax cuts made permanent through the efforts in this second Bush term.
I know, that just set your teeth on edge and grinding, but that's the breaks.
It also needs to be pointed out again that Jorgenson has since realized that his "revenue neutral" rate isn't revenue neutral at all. It would have to be much higher than even the AFT proposed rate.
Nahh, that's just Jorgenson being lazy and using Gale as an alternative claim to what Jorgensons Fair Tax Act simulation shows. To bad but there are too many similar calculations from several sources all showing the revenue neutral rate to lay between 21 and 25% under the Clinton administration tax law.
With the current administration's mindset to make permanent cuts, no problems at all. Course there isn't a problem anyway, as any legal requirement for revenue neutrality in the enactment of revenue bills died in September of 2003 to remove artificial impediments to permanent tax cuts in any case.
You just as well get over it YN, rates for the NRST and current tax law are going down and you will just have to cry alot I guess :O)
from Tax Freedom Day 2004 PDF http://www.taxfoundation.org/sr129.pdf
|
Total Effective Tax Rates by Level of Government |
|||
| Year | Federal | State | Total |
| 1998 | 22.4% | 10.4% | 32.8% |
| 1999 | 22.5% | 10.4% | 32.9% |
| 2000 | 23.1% | 10.4% | 33.5% |
| 2001 | 22.2% | 10.5% | 32.7% |
| 2002 1 | 19.7% | 10.2% | 29.2% |
| 2003 2 | 18.5% | 10.1% | 28.6% |
| 2004 3 | 17.9% | 10.0% | 27.9% |
| Notes: Leap day is omitted to make dates comparable over time. Positive and negative percentages in parentheses after legislation indicate the first-year fiscal impact of the bill,measured as a percentage of NNP. Since depreciation is not available to pay taxes, GDP is an overstatement of spendable income for the purpose of measuring tax burdens. Depreciation is netted out of NNP. 1 Economic Growth and Tax Reform Reconciliation Act of 2001 Sources: Office of Management and Budget; Internal Revenue Service; Congressional Research Service; National Bureau of Economic Research; Treasury Department; and Tax Foundation calculations. |
|||
Good night! and sleep restlessly, we pay the national debt off with your next pay check ;O)
The one line Democrat EZ1040:
How much is in your wallet --> $_________
Send it in.
Nice try but no go. The tax modeled were indeed the Fair Tax Act provisions, simulated to estimate the revenue neutral rate for the Fair Tax Act, against the taxlaw in place during the Clinton Administration.It's not the same rate and it has no demogrant. It's not the FairTax.
LOL well then we'll just take a look at the long term limits as they compare to those short term ones:It's also flawed in the longer term. It's also interesting to see how later version of this paper have changed in their results. The one paid for by the AFT seems to have much greater result than more recent versions. Interesting...
Nahh, that's just Jorgenson being lazy and using Gale as an alternative claim to what Jorgensons Fair Tax Act simulation shows.How do you tell when Jorgenson's being lazy or not? It is that when he says something that doesn't support your position he's being lazy?
You just as well get over it YN, rates for the NRST and current tax law are going down and you will just have to cry alot I guessRight. What ever happened to that big Congressional Research Service study of the rate? Didn't go well? This isn't what you were talking about, is it? Because it doesn't have much good to say about a NRST. And it really looks down on trying to predict the outcome of tax changes with intertemporal models like Jorgenson's. Guess what? It turns out they aren't very realistic. Surprise.
Of course popular conception often has little to do with reality. and your elipsis at the begining and end of this statement leave one wondering what is said about perceptions other than the popular one.FYI, I cut and pasted this snippets from Amazon's search. If you want to read the whole book and are too cheap to pay the money, go to a library. I'm not going to type in the whole damn thing for you.
The popular perception is that the introduction of a national retail sales tax (NRST) or a Hall-Rabushka type flat tax (FT) in place of existing federal income taxes will significantly increase the tax burden ...""on low and middle-class income groups, while decreasing it at the high end of the income distribution."
Nice to know real wages increase rather than decrease under an NRST.Go to the library, you don't know what you are reading. (And you are making too much of this one paper. There are plenty others that come to the same conclusion.)
Tell us, is that one continuous sentence from Page 141 above in the book, or are you indicating something missing in between with your elipsis? helps to keep things together and in context."Moreover, if differenet consumption taxes are equivalent, the choice between them should be based on administrative, compliance, and short-run transitional considerations, bont on the basis of long-run allocative and distributional factors."
Well we do know about Gale and Slemrod, and the fact that Gale especially streches things just a tad bit in his Brookings papers, in not recognizing that NIPA:GDP measures exclude current income/payroll tax evasion as the activities of such are not reported to government to be recorded thus any tax rate based on NIPA measures discounts at least the same amount of tax evasion as the current tax code doesWell, it seems many respected economists (Jorgenson included) disagree with your opinion of Gale's work. Who's opinion should we trust? I guess you're just lumping Slemrod in with him.
Interesting statement if the nominal price of consumption goods increases, and no real effects occur as a consequence of "replacing a PCT with an NRST imposed at a Tax-inclusive rate of 11.11 percent". Makes one wonder what comes after "The nominal price of consumption goods increases ..." doesn't it?Go to the library. You don't know what you are reading.
The statement seems abit disjoint as costs to upstream and intermediate businesses fall with repeal of income & payroll taxes, when the are replaced with a single stage tax at final retail sale releasing alot of dollars and resources to productive use instead of overhead costs. That is especially true for the NRST due to its high visibility and the removal of the high marginal tax rates that exist on wages removing the implicit subsidy encouraging leisure and consumption as opposed to demand for additional income to enhance one's taxfree savings & investment.
Of course if we are talking about Business Transfer Tax(a substraction method VAT) or a Flat tax which is essentially a wage tax with a BTT, and PCTs we would see rising prices where business costs rise in attempt to recover any additional cost factors associated with VATs, with the upward price pressure arising from increased consumption that is encouraged by removal of tax from individual savings and investment returns without comensurate incentives to put the tax moneys released back into investment or savings as the BTT & business Flat Tax tend to be perceived as paid by business in the eyes of the consumer.
What project, what response?It was just an example, go to the library.
will do what??"Under the NRST, PCT, or FT the returns to risk taking, economic rents, above-normal earnings to entrepreneurial activity, and other investment activity will be taxed at the time the income is consumed."
Gee terrible, terrible, to have the rich bear lower burdens,It's just a distributional analysis. It doesn't comment on the morality of it. Are we not suppose to care about the distribution of tax burdens with a NRST?
interestingly the percent tax burden on all income levels under an NRST are reduced in respect to income/payroll tax systems due to greater economic efficiency at which the economy operates and grows, thus a lower percentage of GDP & personal income for the same revenue going to government.Yeah, when Santa Claus is Sec. of Treasury and the Tooth Fairy is Fed Chairman. What's the old saying about things that sound too good to be true?
Well, it seems many respected economists (Jorgenson included) disagree with your opinion of Gale's work.
LOL, all anyone has to do is read it with comparison with the actual parameters of the bill to see Gales Brookings flim flam for it is.
Go to the library. You don't know what you are reading.
Do a google search and save the steps LOL.
"Under the NRST, PCT, or FT the returns to risk taking, economic rents, above-normal earnings to entrepreneurial activity, and other investment activity will be taxed at the time the income is consumed."
Obviously, and as long as income is re-invested or held in the value of an estate, it remains untaxed and growing.
That is the value of a consumption tax over general income taxes. Problem is that VATs, BTT raise the shelf prices of goods and services same as the business side of a Flat Tax, hiding tax burdens behind a veil of inflation, while PCT is for all practical purposes a tax on wages such as the individual side of the flat tax.
NRST however is separated from the chain of production and does not add to overhead costs of intermediate busiesses as the VATs, BTT and corporate Flat Taxes do.
Neither does the NRST subtract from received income until such time as the consumer chooses to spend it on new goods or services in lieu of taxfree saving or investment.
It is obvious to anyone who stops and considers the differences of the NRST, that they are profound and significant for both business and the consumer behavior that gives rise to the advantages to both as compared with multi stage corporate and individual income taxes.
It's just a distributional analysis. It doesn't comment on the morality of it. Are we not suppose to care about the distribution of tax burdens with a NRST?
Only insofar as the analysis and distribution factors used actally apply, which they can to first approximation with VATs, BTT, FlatTax, and PCT as a consequence to their similarity to elements of the current federal tax systems they would replace, which is apparent with the references to rises in nominal prices which are associated with any tax legally incident on businesses throughout the chain of production.
NRST however is a significant step in a different direction at national level with substantially different behavioral response to its visibility and lack of burden on upsteam production levels. In short a distributional analysis using what is known of current distributions patterns for analyzing VATs and corporate income taxes for an NRST is worse than wild 'ss guessing, it can be dangerously misleading where policy considerations are concerned.
What's the old saying about things that sound too good to be true?
Fortunately, such does not apply to the present case.
For answers to rest of your question you will have to go to the library. You wasted a lot of time over a lot of nothing, I'm not going to waste any more of mine.
I have plenty of time to waste, apparently so do you in even putting such a cut up piece out for consideration knowing few are going to be easily checking into its basis or what it actually relates to.
one paid for by the AFT seems to have much greater result than more recent versions. Interesting...
Not suprising as the later ones arbitrarily halved the effective taxbase from that specified in the Fair Tax Act and make other changes that pretty much invalidates any results that could otherwise be useful. Most cases try to make an arbitrary NRST mimic the base of an H/R flat tax or a VAT to do comparisons between the systems. However the flat tax and VATs do not encompass as broad a tax base as HR25 and the flat tax variants have much higher rebate/exemption schemes.
How do you tell when Jorgenson's being lazy or not? It is that when he says something that doesn't support your position he's being lazy?
Actually its when he calls on an outside reference as a contrast against Fair Tax Act claims. Especially in refering to extreme distortions of the Fair Tax Act presented by Gale's Brookings paper as credible work.
What ever happened to that big Congressional Research Service study of the rate?
Doing just fine, release is expected with the first tax reform hearings of the next session of Congess.
This isn't what you were talking about, is it?
Nah, that just a very general overview.
"This report does not track current legislation and will not be updated."
as indicated in the CRS report summary.
the particular study for the Fair Tax Act is for Linder and addresses it specifically as a full economic study not just an overview as your piece is.
The report you found mainly discusses VATs and Flat Taxes in general only touching on the NRST in passing and in the most general of terms. In fact your CRS paper is an overview of various types of consumption taxes rather than a detailed study of anything specific as the Summary page quite clearly indicates with very little more coming out in the rest of the 23 pages addressed to discussion.
Found that one to be pretty much a waste of effort to read, though would be alright for its purpose as an general overview of VATs and other emulated consumption taxes like the flat tax in very broad brush strokes.
LOL, all anyone has to do is read it with comparison with the actual parameters of the bill to see Gales Brookings flim flam for it is.Wow, an AFT rebuttal. That has a lot of weight.
That is the value of a consumption tax over general income taxes. Problem is that VATs, BTT raise the shelf prices of goods and services same as the business side of a Flat Tax, hiding tax burdens behind a veil of inflation, while PCT is for all practical purposes a tax on wages such as the individual side of the flat tax.The VAT compliance costs are minimal and could be easily overcome by paying businesses 0.5% (what the FairTax pays out) of the taxes they remit.
NRST however is separated from the chain of production and does not add to overhead costs of intermediate busiesses as the VATs, BTT and corporate Flat Taxes do.It does too add overhead cost, or are you suggesting as business can sell it products without accounting for the exempt status of the purchaser? If so, it sounds like a huge whole in the enforcement. Also, in practice, a sales tax inadvertently leaks into the production chain and cascades through the chain much more than a VAT. [This is where you ignore the empirical evidence and just quote part of HR 25.]
Neither does the NRST subtract from received income until such time as the consumer chooses to spend it on new goods or services in lieu of taxfree saving or investment.Neither does a VAT. What is all this about, anyway. The paper wasn't advocating a PCT. It was only using it for comparison.
Only insofar as the analysis and distribution factors used actally apply, which they can to first approximation with VATs, BTT, FlatTax, and PCT as a consequence to their similarity to elements of the current federal tax systems they would replace, which is apparent with the references to rises in nominal prices which are associated with any tax legally incident on businesses throughout the chain of production.How do you know what's in the paper? Have you even read it? BTW, its conclusions are any different than other distributional analysis of a NRST with a demogrant.
NRST however is a significant step in a different direction at national level with substantially different behavioral response to its visibility and lack of burden on upsteam production levels.And you are smart enough to predict that behavioral response, huh? The empirical evidence does not suggest a hugely different behavior response. You can't get everyone to drink the Kool-Aid.
In short a distributional analysis using what is known of current distributions patterns for analyzing VATs and corporate income taxes for an NRST is worse than wild 'ss guessing, it can be dangerously misleading where policy considerations are concerned.Worse than guessing? Dangerously misleading? Sound like a Jorgenson paper.
I have plenty of time to waste, apparently so do you in even putting such a cut up piece out for consideration knowing few are going to be easily checking into its basis or what it actually relates to.Like I said, that was cut and pasted from Amazon's search. And, if you remember, I only put that up there because you said the index didn't show the NRST being discussed in the paper. It obviously is. (And you didn't even say you were sorry!)
You send me yours since you don't need it. My address is... :-)
switch to a fair-tax that has no influence over family structures and you've eliminated most of the desire for gays to want marriage "rights".
As shown at http://www.fairtaxvolunteer.org/smart/faq-main.html#3 the rebate for 2 single people is the same as the rebate for two single people. No social engineering here!!
Do you not understand that the Fair Tax accomplishes all of this AND eliminates the IRS? The flat tax exempts families of four from paying any taxes up to about $40,000. Why shouldn't they pay any tax? Are they not getting any benefits from national defense, interstate highways, etc? What's fair about that?
What method of collection do you propose with the Flat Tax? How are you going to get drug dealers to pay their "fair share?" I rebuke the Flat Tax on the basis that it still only taxes "legitimate" wage earners. Illegal aliens get "free" healthcare, don't contribute a dime and still continue to procreate at an astounding rate. Get them legal or get them out; get them working, contributing and OFF my healthcare plan. How about the "poor & homeless" who can't afford housing, refuse jobs offered to them, yet come into the emergency rooms weekly to sleep off their drunkeness or drug use, taking up a bed that your grandmother may need? The Flat Tax is NOT the answer.
What method of collection do you propose with the Flat Tax? How are you going to get drug dealers to pay their "fair share?" I rebuke the Flat Tax on the basis that it still only taxes "legitimate" wage earners. Illegal aliens get "free" healthcare, don't contribute a dime and still continue to procreate at an astounding rate. Get them legal or get them out; get them working, contributing and OFF my healthcare plan. How about the "poor & homeless" who can't afford housing, refuse jobs offered to them, yet come into the emergency rooms weekly to sleep off their drunkeness or drug use, taking up a bed that your grandmother may need? The Flat Tax is NOT the answer.
And how do you propose they collect this individual tax bill? Wouldn't the prisons be overloaded with poor & middle class people who couldn't pay their bills, thus creating an even bigger tax burden? Ascinine idea!
NRST forces cheaters to pay, helps reduce the number of illegals crossing our boarders, and allows the John Kerrys and Enrons of the world to spend to their hearts desire without loopholing the government out of millions of dollars in taxes. Enough said.
And how do you propose they collect this individual tax bill? Wouldn't the prisons be overloaded with poor & middle class people who couldn't pay their bills, thus creating an even bigger tax burden? Ascinine idea!
NRST forces cheaters to pay, helps reduce the number of illegals crossing our boarders, and allows the John Kerrys and Enrons of the world to spend to their hearts desire without loopholing the government out of millions of dollars in taxes. Enough said.
Neal Boortz does NOT support the Flat Tax. He is an avid supporter of the FAIR TAX.
“Neal Boortz does NOT support the Flat Tax. He is an avid supporter of the FAIR TAX.”
Hey tiredtazpayer:
Don’t you mean that socialist not so fair tax idea which puts every American family on the public dole by its family consumption allowance?
Did it ever dawn upon Neal that the carrot of abolishing the IRS may be intentionally designed by folks in government to lure the people into a new and perhaps even more oppressive system?
Do you really think folks in government would willingly relinquish a mighty power they now exercise over the People via the income tax which makes the people their servant? The old saying goes: if it’s sounds too good to be true it probably is!
I have asked a rhetorical question in a number of forums repeatedly, and sincerely thought a thinking person would have answered it by now with some deep and penetrating insight. The question being: why not simply exempt the necessities of life from taxation, instead of creating a family consumption allowance which puts every American Family on the public dole?
You see, my rhetorical question was meant to point out that whenever folks in government make people dependant upon a periodically issued government check, eventually the issuing of that money is used to control and regulate their activities. So, if the family consumption allowance is intended to pay the tax on the basic necessities of life, is it not necessary and proper for Congress to require those who receive a family consumption allowance to prove that allowance was spent on basic necessities and nothing more?
And, who is to say what is considered a basic necessity and what isn’t? Surely, this is within Congress’ powers as Congress is providing the check. And how may Congress ensure that each family spends its family consumption allowance as Congress’ has legislated? We wouldn’t want, for example, pregnant mothers to use a government issued allowance to purchase wine, whiskey, tobacco, or foods which may be unhealthy to the unborn. And so, Congress solves the problem of keeping an eye upon the spending of the family consumption allowance by more regulations, just as the IRS now enforces and checks up on the people through mandatory record keeping, audits, and so forth.
Oh, but I thought Neal told us the IRS was to be abolished!
That is true my child, and in its place we have established a kinder gentler service, but its rules must also be followed, just as those of the former IRS.
Sincerely,
JWK
ACRS
So, do you really think the so called Fair Tax idea, and its family consumption allowance, which is a proposed monthly check to be sent out by government to every American family to offset taxes paid on the basic necessities of life, is a good idea? Neal Boortz, a Talk Radio Host, apparently does, see Neal Boortz supports Fair Tax proposal?
But think of the consequences of creating a system requiring a monthly government check to be paid to every American family. It creates a captive voting block among the working poor, and perhaps the lower middle class, with a vested interest to vote for members of Congress who promises to increase the family consumption allowance, which is exactly what every left wing socialists in Congress will do, and it will help to keep them in Congress!
So, why does Boortz support something which will benefit socialists in Congress? Why is it that Boortz, in proposing an idea to abolish “income taxation“, will not promote our Founding Fathers original tax plan which already provides for an internal consumption tax and was intended to not tax basic necessities?
Why is it that Boortz, in advocating the abandonment of taxing income, which all thinking people must agree is a socialist and Marxists friendly tax, promotes an idea which will help keep socialists and Marxists in Congress?
Instead of promoting a socialists and Marxists friendly tax, why does Boortz not promote the abandonment of allowing Congress to tax income, the worm at the root of the tree, and simply advocate a return to our Founding Father’s original tax plan which is already contained in our Constitution___ a tax plan very different from the so called fair tax which, in addition to disbursing the costs of government in a fair and equitable manner, also contains various essential checks and balances to encourage Congress to follow sound fiscal policies?
The fair tax idea will only tighten the iron fist of government around the peoples productivity while making the people more dependant upon that same fist to feed them, and that is why freedom loving Americans who believe government is a necessary evil, instead of promoting the Fair Tax, promote the Founding Father’s original tax plan which, by contrast, was designed to control the actions of Congress by the peoples iron fist called a written constitution!
For related information and documentation concerning our founding fathers’ original tax plan see EXPOSING THE FAIR TAX HOAX ___ scroll down and start reading at:
American Constitutional Research Service
Before the
Committee on Ways and Means
United States House of Representatives
June 1995
I also suggest those interested in the adverse effects of the fair tax proposal study: The Fair Tax: A Trojan Horse For America
JWK
In matters of Power, let no more be heard of confidence in men, but bind him down from mischief by the chains of the Constitution.-- Thomas Jefferson
The strength of the Constitution, lies in the will of the people to defend it. -- Thomas Edison
I have been told there is a problem in our nation…Johnny can’t read, but as I see the problem, it is that Johnny can read but won’t.---Edward A. Ellison Jr., J.D.
Finally, another one who can think and see beyond the dangling carrot pretty words.
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