Posted on 03/03/2005 7:05:07 AM PST by FairOpinion
WASHINGTON Mar 3, 2005 — Federal Reserve Chairman Alan Greenspan on Thursday embraced the notion of overhauling the nation's tax system and said that some form of a consumption tax such as a national sales tax could spur greater economic growth.
"As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth particularly if one were designing a tax system from scratch because a consumption tax is likely to encourage saving and capital formation," Greenspan said.
(Excerpt) Read more at abcnews.go.com ...
The information is available. If you choose not to believe it, fine of course - But have some reasons! Just saying you don't believe it isn't an argument.
You'll have to dig into the numbers and tell me what's wrong with them- if you're willing.
Who's getting laid off?
Hey, your 'guesses' were the first insult -- "live by the sword,..
They were not insults. They were just as I wrote, educated guesses. Save for the third which was jovial.
I note that you admit that yours was an insult. And your response when you thought -- despite the thought being in error -- a person has lowered themselves to sling an insult you respond by slinging an insult.
You're a hoot!
That is from 682.
Remember under the nrst, business (your "corporations") don't pay federal income tax. Only individuals pay tax. So I have no idea what you meant.
An aside - do you believe "corporations" pay taxes today?
Workers aren't getting extra money. Their contracted salary/wage doesn't change.
The change you reference is simply that the worker is allowed to receive his money before paying taxes. Today, payroll tax and income tax is removed from paychecks before the worker gets it - and thus his payroll and (approximately) income taxes are paid. Under the nrst, the worker pays his taxes when he spends, not when he earns - but he's still paying taxes that pay for the same things as before.
But under the nrst, the tax base is much larger - so the amount collected from each person is less - except for those who weren't paying before!
Incidentally, if it really were, say, $700B, we'd have the worst depression in the history of the world when your FairTax passed and all those 15 million or so people were laid off!
Same people will be employed, differently is all. Instead of that $700+ billion going into non-productive endeavors and losses due to lower productivity, it winds up going into capital investment/saving and subsequent business expansion and people originally bound up in tax planning and non-productibe tax compliance activities turning to more productive applications of their talents.
You also over look the fact that removing costs and taxes on business endevours helps to lower the costs on product exports increasing that segment of GDP. Increasing GDP is not a condition of layoffs or depressed economies.
Overall an initial surge in export volume and expansion of those markets will be seen tapering down somewhat with time and currency adjustments over a long time frame. However as neither taxes nor the costs associated with them will be embedded into our exports a decided shift will develop in the export import balance.
Additionally with tax treatement favoring business expansion and creating a substantive tax haven to business foreign investment in the US will increase substantially creating the basis of expanding industrial infra-structure with consequent job opportunites for a widening labor supply that is encourage by the premium that is created on leisure time by removal of current high marginal rates of taxation on income, removal of the taxation on investment/savings incomparison to the taxation of consumption activity.
The economy is not a zero-sum game, nor is a shift in the mode in how this nation is taxed. The changes in behaviour brought about by shifting to a visible consumption based tax system are significant and beneficial to all levels of our economic lives.
Your statement that due to the compliance cost being 700b a NRST would result in the loss of 15m jobs. I realize it was rather tongue in cheek. The point is, compliance isn't just the cost of CPA's and bookkeepers. Billions of dollars are poured into estate planning life insurance policies so that heirs don't have to sell off family land or business in order to pay estate taxes. Billions of dollars are poured into tax shelters such as low housing tax credits and energy credits. Microsoft alone probably invests 10's of millions in housing tax credits each year, not because it is beneficial to low income folks, but because they get a tax write off. Those programs are designed purely for their tax effect. Some of these programs only have a rate of return that is due to their tax avoidance traits.
Ultimately, yes, but the dislocation in the first year or two, before they find new jobs will bring the depression -- then there won't be any new jobs to switch into until we can pull out of it.
Just a couple of tax credit programs designed entirely because of the income tax code:
http://www.petd.com/
https://www.bostoncapital.com/aboutIndex.html
OK, capisco. But surely this money is not a valid cost, since it is money returned to the families when the insureds die.
Of course they are. Their take-home pay is higher, because their gross pay is the same and there is no payroll tax withheld.
Charitable Remainder Trusts, Rabbi Trusts, Foundation planning, CRUT's, Irrevocable Spousal Trusts. Billions and billions of dollars for experts to put this crap together and then billions to fund them.
http://www.pueblo.gsa.gov/cic_text/money/estate/estate.htm
Let's say your estate is 10m. Your estate tax liability is projected to be 5m. Your estate is all in raw timberland that has been in your family for 6 generations. You buy a life insurance policy at age 65 for 5m. The premiums are say 50,000 a year. When you die your family gets 5m in life insurance proceeds to pay your estate taxes and they keep the land in the family for another generation. How much could the estate have grown if the 50,000 in premiums had been invested instead of dumped into an insurance policy?
That's me. Odd behavior for a man, huh. I'll confess to worse: if someones slings a punch at me, I'm apt to respond with a punch.
A tongue-in-cheek comment in 709.
I don't know the answer to that question, but I'm sure the insurance company invested it.
I don't know about CRUTs and Rabbi Trusts, but the others return all of the money to the beneficiaries. I'll grant you that there is a cost to prepare and administer these trusts, though. OTOH, there are many other reasons to have a trust beyond tax minimization.
This won't wash, because I'm assured by ancient_geezer and others (maybe you? I'm not sure) that gross prices won't go up when the FairTax is instituted. In fact, that's the motivation for posts like 682. Whenever someone tells me there's a free lunch, I begin to get suspicious.
That's me. Odd behavior for a man, huh.
Yes.
I'll confess to worse: if someones slings a punch at me, I'm apt to respond with a punch.
Something's out of whack. Defending yourself from assault -- initiation of force -- is not a bad or worse thing. It's good to defend yourself from assault. Using force in self defense doesn't equate to lowering oneself to the level of the person initiating force.
OK, mybad.
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