Income-Tax Foes Regroup(Alliance for National Sales LevyGains With Some Conservatives)

"probably accounted for a couple hundred Huckabee votes."

= In denial

Probably accounted for a lot more.

Every American, excepting politicians of course, should prefer the Fair Tax to that travesty we call a tax code. But, they should also have all preferred the modifications to Social Security that the President recommended a couple of years ago as well.

I can only conclude that most Americans simply aren’t smart enough to understand that what’s best for politicians usually isn’t what’s best for them.

I Agree therefore we will have to drag them kicking and screaming into future of taxation

But, they should also have all preferred the modifications to Social Security that the President recommended a couple of years ago as well.
"Recommended" is the operative word. It's too bad he didn't have as much fervor about that as he does about illegals.

To ensure the income tax never returns, the group proposes repealing the 16th Amendment that created it a century ago.
Where did the WSJ get that misinformation?

There's no proposal in the Fairtax bill to repeal the 16th amendment. Nor is there a "sister" bill that would be enacted should the Fairtax be enacted.

Dear Ms. Calmes:

Thanks for the interesting post. Your graphic, taken from the President’s Tax Panel, contains information not representative of the FairTax plan. It should be noted that FairTax.org and Dr. Laurence Kotlikoff have rebutted the conclusions of the President’s Tax Panel. Specifically,

“Panel statement #3: The FairTax proponents’ calculations used faulty assumptions and a higher sales tax rate would be needed to be revenue neutral.

“FairTax response: The Treasury estimates for a national retail sales tax reported by the panel were not an estimate of the FairTax legislation. The panel concocted a base of their own, one apparently designed to produce the highest possible rate. Rather than follow the FairTax legislation, they apparently used a typical state sales tax base that is far, far narrower (many exemptions) than the single-rate/no exemptions FairTax.”

FairTax.org continues...

“In addition, the Treasury refused to compare rate quotes on an apples-to-apples basis. Rather than quote the rates for replacement systems in a direct comparison to the income/payroll tax rates they replace, they used ‘econospeak’ sleight of hand to compare apples to oranges. Since the ill-fated beginning of the income tax, it has been quoted by government (and taxpayers) in what economists call a ‘tax-inclusive’ manner. ‘My tax rate was 23 percent’ means if you earned $100, the government kept $23. If you talk about that rate as if it were a sales tax, which is added on to a purchase (tax exclusive), the income tax rate is 30 percent. No matter what, the government gets $23.

“... the Treasury **refuses to make public** [emphasis mine] its scoring methodology – estimating the tax base and revenues – for these plans. Providing such methodology is standard operating procedure in the academic world, yet the Treasury has ignored requests for this information from both FairTax.org and academia.

“...The Beacon Hill Institute at Suffolk University and Laurence Kotlikoff, Professor of Economics at Boston University, have teamed up to provide a sound methodology for estimating the FairTax base and computing the FairTax rate.4 Their paper demonstrates that the 23 percent rate specified by the Fair Tax Act (HR 25) is eminently feasible and suggests what led Gale5 and the President’s Advisory Panel on Federal Tax Reform6 to reach the opposite – and incorrect – conclusion. (Paper available at http://www.fairtax.org/PDF/TaxingSalesUnderFairTax.pdf .)”

Study both: http://snipurl.com/taxpanelrebutted + http://snipurl.com/ftgalerebuttal

With regard to effective percentages that different income groups would pay, as shown charted in Ms. Calmes’s article, Prof.’s Kotlikoff and Rapson (10/06) have said,

“...the FairTax imposes much lower average taxes on working-age households than does the current system. The FairTax broadens the tax base from what is now primarily a system of labor income taxation to a system that taxes, albeit indirectly, both labor income and existing wealth. By including existing wealth in the effective tax base, much of which is owned by rich and middle-class elderly households, the FairTax is able to tax labor income at a lower effective rate and, thereby, lower the average lifetime tax rates facing working-age Americans.

“Consider, as an example, a single household age 30 earning $50,000. The household’s average tax rate under the current system is 21.1 percent. It’s 13.5 percent under the FairTax. Since the FairTax would preserve the purchasing power of Social Security benefits and also provide a tax rebate, older low-income workers who will live primarily or exclusively on Social Security would be better off. As an example, the average remaining lifetime tax rate for an age 60 married couple with $20,000 of earnings falls from its current value of 7.2 percent to -11.0 percent under the FairTax. As another example, compare the current 24.0 percent remaining lifetime average tax rate of a married age 45 couple with $100,000 in earnings to the 14.7 percent rate that arises under the FairTax.”

Study: http://snipurl.com/kotcomparetaxrates

And, finally,

“...once one moves to generations postdating the baby boomers there are positive welfare gains for all income groups in each cohort. Under a 23 percent FairTax policy, the poorest members of the generation born in 1990 enjoy a 13.5 percent welfare gain. Their middle-class and rich contemporaries experience 5 and 2 percent welfare gains, respectively. The welfare gains are largest for future generations. Take the cohort born in 2030. The poorest members of this cohort enjoy a huge 26 percent improvement in their well-being. For middle class members of this birth group, there’s a 12 percent welfare gain. And for the richest members of the group, the gain is 5 percent.”

Study: http://snipurl.com/kotftmacromicro