[Your Nightmare]

Since your numbers are on in one case and close in another I'll let you off the hook on the small error

They aren't off. I rounded the numbers - one up and one down.

That's not the discussion

That's why I said "BTW."

The actual formulas used for the derivation of the funds generated (and thereby the revenue neutral rate) are shown in Formula (24) on page 17 where in the term C07+G07+GS07 these values are multiplied by the tax inclusive rate (23%) which means, of course that Koltikoff et al are saying that government wages are burdened at the 23% rate and that the proscribed employees we've been talking about when paid $100,000 in gross wages also cause $23,000 (less the adjustments I've mentioned in earlier posts which I don't think the paper considers but haven't time to check) in FairTax to be generated.

They are saying no such thing. You left off a part of the equation–the part that shows that C₀₇, G₀₇, and GS₀₇ include the FairTax. Here is the equation in full:

R_FT = (C₀₇ + G₀₇ + GS₀₇)t_i (1+α)

Where:

RFT	is the tax revenue to be raised by the FairTax in 2007;
C07	is personal consumption at market value in 2007;
G07	is taxable federal government spending on goods and services;
GS07	is taxable state and local government consumption at market value in 2007;
ti	is the is the tax-inclusive rate; and
α	is the percentage by which market prices under the FairTax would exceed expected prices in 2007 under current law.

This change in market prices is due the Fed accommodating the FairTax with consumer price increases. Kotlikoff explains α:

Assuming that the monetary authorities adjust only to the FairTax in setting policy for 2007, The (1-ti) term adjusts for the fall in gross income and in consumer prices (net of the FairTax), given the assumption of no monetary accommodation; with full monetary accommodation this term would drop out. can take values between 0 and t_e, so that 0 ≤ α ≤ t_e, where t_e is the tax-exclusive FairTax rate. With no change in real income or the velocity of money, the maximum amount that prices could increase when the FairTax is imposed is the amount of the tax, so the price would go up by a factor of t_e when there is full monetary accommodation.

C₀₇, G₀₇, and GS₀₇ include the FairTax, whether the monetary authorities adjust to the FairTax or not. If they don't, gross income declines (real income doesn't change).

[Always Right]

It is hopeless. I can't imagine someone posting what pigdog does and not getting paid. Pigdog would not be the first person AFFT has paid to post here.

[pigdog]

Sounds to me like now that you know you've lost the argument of taxable employees you're trying to shift into some different argument.

Hey, wait a minute ... aren't you the one who just said:

"... You always change the question when you are shown to be wrong ... "

You said that when I WASN'T trying to change the question at all (you were) and now you're trying that very stunt yourself. Whoa, Nellie!!!

But your attempted "switch" shows that you know you've lost the argument ... and the term alpha you allude to as though it's a big deal is pretty meaningless since the paper says it can have the value zero (IOW, drop out of the equation). You still have nothing in the way of an argument and the sooner you admit it to yourself, the sooner we can stop wasting time on this nonsense,

"C₀₇, G₀₇, and GS₀₇ include the FairTax, whether the monetary authorities adjust to the FairTax or not. If they don't, gross income declines (real income doesn't change). "

Stop the smoke-blowing since the paper also says:

"... We assume that the monetary authorities do not accommodate the adoption of the FairTax, which is to say that they restrain the growth of the money supply sufficiently to prevent market prices from rising. As mentioned, this is merely a simplifying assumption. We could just as well have allowed for monetary accommodation, so that there would be no fall in producer prices under the FairTax. Doing so, however, would merely have made the algebra more complicated without changing the results..."

All of that including your comments have nothing at all to do with the fact that the government taxable employer wages we have been discussing are taxed at the 23% rate - exactly as I have said for hundreds of posts. You may not know it, but economists do.