The FairTax revenue estimates come from longterm historical consumption data. These data are stable. The FairTax/NRST analysis starts with these data and operates under the model that if taxes (income, payroll) taxes are taken out of one end and the NRST replaces it at the other end, the FairTax system of taxation is revenue neutral and consumption patterns are statistically the same given sufficient price stability.
Price and consumption stability is why the FairTax will be tested on selected states for evaluation. The full enactment may leave individual states with a choice, pay X amount of federal taxes and we don’t care how you choose to do it as long as it is lawful (Constitutional). However, the 16th Amendment will be repealed but the states may be allowed to administer their own income tax so long as they pay the federal government the level of taxes they have historically with year to year adjustments based on population data (apportionment).
This involves decentralization of federal government and this is where the ideological battle lies. The Uniformity clause is already in preparation for proper interpretation as it has been misinterpreted for several decades.
Decentralization is key to limiting federal government spending and allowing States to return to their historical roles in deciding local policy in all matters of their 10th Amendment jurisdiction. Quasi-Decentralization started with block grants but the uniformity clause still keeps power at the federal level.
And the FairTax is key to decentralization.
Looking back over the decades since Ronald Reagan, attempts to limit government spending and borrowing have failed because of the ability of legislators to manipulate the current Tax code or to run deficits without budget restraints. Both parties blame the other for failure.
The FairTax allows the electorate to understand increases in government spending by a simple monitoring of the NRST rate.
Recently, Kotlikoff estimated the necessary NRST rate for 2007 based on increases in government spending and consumption. The results were to increase the NRST from 23% to 23.82%.
It is widely believed that if the NRST were to edge up year over year, the electorate would notice and act accordingly.
but the states may be allowed to administer their own income tax so long as they pay the federal government the level of taxes they have historically with year to year adjustments based on population data (apportionment).It doesn't sound like "decentralization" to me it sounds more like a lot of wishful thinking and double talk.This involves decentralization of federal government...
Price and consumption stability is why the FairTax will be tested on selected states for evaluation.The full enactment may leave individual states with a choice, pay X amount of federal taxes and we don’t care how you choose to do it as long as it is lawful (Constitutional).We?
What's the bill number?
“However, the 16th Amendment will be repealed......”
This will take 38 states to ratify will it not?
The FairTax leaves in place excise taxes, like the federal gas tax. Its not hard to imagine that, from a politician's point of view, raising those taxes would be the way to sneak in tax increases without touching the NRST rate.
For instance, the gas tax is now 18 cents; the FairTax would tax the gas tax at 30%, so increasing the gas tax would automatically increase the amount of sales tax collected on a gallon of gas without increasing the FairTax rate.
“However, the 16th Amendment will be repealed but the states may be allowed to administer their own income tax so long as they pay the federal government the level of taxes they have historically with year to year adjustments based on population data (apportionment).”
You cannot legislate to repeal an amendment to the Constitution, I believe that will take 38 states to ratify.