Therefore, we have only two alternatives left: The flat income tax and the sales tax. They have the same base: Consumption less approximately $25,000 exemption per household. Therefore, they will affect the economy in the same way over the long run. The reason the flat income tax wins is because it doesn't have negative monetary policy consequences in the short run.
Therefore, we have only two alternatives left: The flat income tax and the sales tax.
True,
They have the same base: Consumption less approximately $25,000 exemption per household.
False, the Flat Tax legislation proposed taxes business capital gains, dividends, and interest income even when re-invested as well as initial capital placed into investment and individual retirement plan returns while the NRST does not tax any incomes that are placed into investment/savings or re-invested. Additionally the Flat Tax does not reach to transients in the US where the NRST does.
Those reasons alone, not even extending myself to dig into secondary sources mean the Flat Tax actually has a smaller tax base than the NRST, and impacts investment capital.
Therefore, they will affect the economy in the same way over the long run.
Untrue for the above reasons.
The reason the flat income tax wins is because it doesn't have negative monetary policy consequences in the short run.
And what negative monetary policy consequence do you figure an NRST has that your Flat Tax does not?
The net effect I see, of monetary consequence, is a strengthening of the dollar in response to foreign trade balances attracting investment flows that strengthen our markets and business infra-structure, which looking at current valuations we see to be rather down on as it is.