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.