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To: Kellis91789

More broadly, people correctly have an aversion to taxes, which for some people distorts their judgment. This distortion of judgment I call Tax Derangement Syndrome, and occurs when people are so driven to avoid taxes that they make financial decisions which are suboptimal.

It’s a lot like people going out of their way to avoid a toll by driving an alternate route...and spending more (gas and time) in the process.

The FairTax, by nature of its ubiquity and its high rate, will drive many to seek to avoid it, resulting in inefficiency (on the part of the avoiders) and loss of tax revenue.


42 posted on 05/29/2011 3:44:49 AM PDT by rbb
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To: rbb

Yes, that happens. It is analogous to the man who sells his prized classic car for less than it’s worth just so his wife won’t get it in the divorce. Some call it spite, and some call it principle. It’s a reaction to a feeling of betrayal. It’s their choice to do what they want with their money, and they’d rather blow it than see somebody get it who doesn’t deserve it. The FairTax assumes those people will just sit back and pay and pay and pay even though those people have legal alternatives to skip paying the tax.


48 posted on 05/29/2011 11:37:54 PM PDT by Kellis91789 (There's a reason the mascot of the Democratic Party is a jackass.)
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