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"Unfortunately, your next burden is how to sell your basic point to a public that lacks economic sophistication. They really believe half the social security taxes are borne by the employer. That's why Bush gave his dividend tax break (15% rate) to shareholders, rather than giving a deduction to corporations, which would be a more sensible regime under the current tax code. I know you're right, but how can you possibly explain it to economic illiterates, who, alas, constitute a majority of voters in our fair land?"

What I was saying in #92 was that you're right that the intermediary (employer, business) passes along any tax it collects, so that it's really borne by the ultimate consumer/employee. I wasn't signing on for full agreement with the proposal. (Not that my personal view matters that much anyway, except to me.)

Thinking a little more about the transition, one solution to arguments about unfairness (to the retiree with a pile of dollar bills) is to allow some period (a year?) after enactment, but before the new system comes into force. That way anyone believing himself prejudiced by the new system has an opportunity to change his position (here, to buy stuff).

Thinking a little more about the transition, one solution to arguments about unfairness (to the retiree with a pile of dollar bills) is to allow some period (a year?) after enactment, but before the new system comes into force.

Usually done in default anyway, most enacted tax bills do not become effective until the year following enactment. May not always be a full year in that, but certainly a transition time does take place in that sense.

Though I doubt it would make make much difference one way or the other, as there will be substantial downward pressure on prices, sufficient to nearly, if not completely, compensate for the imposition of the NRST on new products.

Alternative are open in anycase, the purchase of older homes & residential properties or even new homes as investements is NRST free. By any used goods (antiques?), etc. In fact one of the tranistion rules that is explicitly in place in the legislation is the grandfathering of all goods and residential properties owned prior to passage so they are free of NRST. On the rationale that they have already been paid for out of taxed dollars.

" ...one solution to arguments about unfairness (to the retiree with a pile of dollar bills) is to allow some period (a year?) after enactment, but before the new system comes into force."

That is how the proposal would be implemented. It is my understanding that Chairman Greenspan, when consulted on the proposal, requested a minimum of 6 months between passage and implementation to give the capital markets a chance to adjust.

BTW, Chairman Greenspan also recently disagreed with Willie Green, by saying that businesses don't pay taxes, only consumers do.