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"Taxes have nothing to do with eternal vigilence. They are how a people collectively fund their government. With the requirement to file tax returns, people are not scrutinizing where their money goes,. Just look at this last election. How much play did taxation and government spending get?"

That is because we currently have nearly half the population that is not carrying any burden, and in many cases these individuals are adding to the burden. When you have half the electorate not carrying the weight, then it is no longer an issue. The only remaining issue is the benefits that can be used to purchase votes from that segment of the electorate. Oh, yeah, if you can increase that pool of voters (say only tax the rich) then you can also purchase more votes.

"How will NST be any different?"

All members of the electorate will be carrying a portion of the weight of the largesse used to fund unconstitutional elements of the federal government.

I have yet to see any pro-APTer address the million transactions a day that a US OEM makes and will be forced to pay taxes on and pass that cost along to the customer. I have yet to see any pro-APTer address how this is good for the American worker? Why support a tax policy that gives a competitive edge to foriegn manufacturers?

Regardless of where the tax revenue is generated, the costs are carried by some portion of the 230-250 million American citizens that we have. The pro-APTers seem to think that there is some other element that will just absorb the tax burden. The bottom line is that the citizens pay the tax burden, either through direct taxation or through economic theft (price increases, lower productivity, etc.). Shouldn't the citizens have the ability to directly see the burden they are carrying? Shouldn't the largest segment of citizens be carrying the burden? According to the answers I have seen here, the biggest selling point to the proposal is the ability to keep the burden hidden from the citizens. How is that a good thing?

How do you expect government reduction if you don't give the citizen the power of knowledge with which they would hold the elected responsible?

I keep seeing from the pro-APTers the statements that the markets transactions will be taxed, that the unproductive trading will be taxed, etc. What will this do to my retirement investments (401K's), mutual funds, health care ins. premiums, etc. What the proposal does is hit the people who saves for the future the hardest. How is placing the larger burden on the frugal best for this country?

Needless to say, I have asked these questions of the pro-NRSTers and the Flat Taxers. Generally they have well thought out answers to these questions and both are convincing. I have decided that the NRST is the best proposal I have seen so far. Now is the pro-APTers opportunity to do the same. Convince me.

Hello again -- bet your glad to hear from me again. I want to make several points on the stellar thread.

Regarding the famous "cascade effect". Every OEM manufacturer will experience the embedded tax reduction a la NRST of about 20% of the cost of each product. So when they are charged the 0.5% (both sides) back the saving will be 19.5% to the extent that the market will allow they will put that net in their collective back pockets. That's a savings cascade not a cost cascade.

I have not studied the turnover tax referred to but there must be considerable differences. Possibly the interactions (piling on) with other taxes may explain the failure. The fact is there are existing, successfully operating transaction tax systems functioning as add-ons today and every day in Brazil for example. They have their problems but according to a resident economist they are NOT related the the transaction tax with which they are pleased. A few other South American countries are having similar experiences.

Regarding the effect on the security and derivative markets.
The expansion of the tax base and shifting of burden substantially away from the critical engine of our economy the consumer will do nothing but spur business along with the tax and compliance savings business will experience. The revenue and earnings increases will expand the stock prices and your 401k plans NOT decimate them. True use of futures by people hedging production will continue but traders will be hurt. Floor traders and market makers are involved in internal transactions that would be protected from taxation.
When they remove funds to their personal or corporate accounts they will be taxed at 0.25%. The universal benefits that virtually everyone will realize under APT cannot hinge on a futures traders smile. Let the speculators move to other markets and experience their own versions of security taxes of which there are many. Further if they are looking for liquidity and volume they will be hard put to find it elsewhere. I can hear SAJ calling for my head already but that will be unrealistic, very loud, rhetoric. The major investments will flourish and there will be plenty of savings/investment capital to build new companies.

Now regarding NRST, I see five major problems:
1. It aims 100% at heart and engine of the economy with the potential for major price increases with wishing and hoping the market will force price reductions commensurate with tax and compliance cost savings.
2. It is the most regressive form of taxation even with the rebates.
3. It fully double taxes after-tax savings and accumulated, after-tax home equity that millions of Americans look to provide retirement source of funds for living.
4. The definition and compliance burden of differentiating used from new products is highly susceptable to evasion schemes and black market activity. Are taxed goods going to be "stamped" kinda like King George did awhile back which I believe we all found revolting?
5. There will remain a substantial collection and compliance bureaucracy, possibly moved to the state level, but they can be just as nasty or worst then the IRS especially when their ranks are expanded by Federal grants to states to provide these functions.

There -- that oughta spur another 400 posts. Could we keep them respectful and civil? -- probably not.

The significant thing about APT is not that it taxes less, because we're assuming revenue neutrality. Rather, it's a matter of where in the economic cycle it is collected. APT encourages economic expansion by decreasing the tax burden on production, as well as consumption. Securities markets derive their value from the productive sector, and so will increase in total value as a result of expanded production. So the tax is collected on the transfers of securities values, after these values are created by the expanding production economy. Presently, expansion occurs only by the FED priming the money supply, and Congress increasing deficit spending. APT stimulates without resorting to those traditional means of market manipulation. Incidentally, the Fair Tax proposal "buys votes" or public acceptance with its universal rebate feature. Whatever tax reform proposal eventually gets adopted will be very effectively marketed to the public by a political class that survives on it's ability to do so.