Sure there was, as the material you quoted had a much greater context demonstrating how opponents of the NRST misrepresent it through fallacious, inconsistant and incomplete arguments.
My quote from Mastromarco and Burton was none of those.
Strange, I could have sworn the article you quoted from was concerning a rebutal of William Gale.
Guilty conscience perhaps?
"The lady doth protest too much, methinks."
--Hamlet (III, ii, 239)
None of what you posted changes what they said.
True, it changes nothing at all about what they had to say used in regard William Gale's analysis at all.
"Gale’s analysis of the impact on prices and assets levels is contradictory and confused."
"He [Gale] states that income taxes are “clearly incorporated in the price of goods that are bought and sold.” This means that when they are repealed, producer prices will come down as research conducted by Harvard’s Dale Jorgenson suggests. Jorgenson finds that repealing the income and payroll tax would reduce producer prices by 20-35 percent depending on the industry. "
Gale, however, then rejects the view that income taxes are in the price of goods we buy and assumes that removing them will not reduce prices. He can not hold both points of view simultaneously. Federal income and payroll taxes either are or are not incorporated into the prices of goods and services. If they are embedded in prices, their removal will reduce prices. If they are not, then their removal will not reduce prices but instead returns to labor and capital will go up. If returns to labor go up, people will see their after-tax wages increase and asset values will increase since the present discounted value of the new, higher returns will be higher.
They clearly stated that either inclusive prices and after-tax wages stay the same; or prices and after-tax wages will increase. It's their opinion that it's an "either/or" situation.
Actually there is a threeway potential, either people have more real income, or they pay less for goods and services, or a combination of both lower producer prices and higher wages as the economy grows.
For as pointed out by Kotlikoff
Statement of Laurence J. Kotlikoff,
http://waysandmeans.house.gov/legacy/fullcomm/106cong/4-11-00/4-11kotl.htmProfessor of Economics, Boston University, and Research Associate, National Bureau of Economic Research
Testimony Before the House Committee on Ways and Means - Hearing on Fundamental Tax Reform
April 11, 2000
- "Consumption taxation is needed not just to help our children. It is also needed to simplify the tax code and reduce effective marginal tax rates. The Fair Tax proposal is a case in point. This proposed reform would eliminate both the personal and corporate federal income taxes as well as the payroll tax, and replace them with a federal retail sales tax plus a rebate based on each household's demographic characteristics."
- "Compliance costs would be vastly lower under a retail sales tax. So would, it seems, enforcement costs. The reason is that a broad based sales tax, with no exemptions for housing or any other forms of consumption, would feature much lower effective marginal tax rates than those we now face and, therefore, much smaller incentives to evade taxation."
with the consequence:
"This means that when they are repealed, producer prices will come down as research conducted by Harvard’s Dale Jorgenson suggests. Jorgenson finds that repealing the income and payroll tax would reduce producer prices by 20-35 percent depending on the industry. "
Abit more than just Mastromarko & Burton's opinion concerning the inconsistencies of William Gale, is pointing in the most likely direction business will take in utilizing their reduction in taxrelated overhead costs.
Seems that the primary effect will be in the direction of reduction of lower producer prices, with growth in capital investment under tax free savings and investment providing the technological advance in productivity that leads to real wage growth and increased living standard even under Kotlikoffs very conservative assumptions of 25% higher tax rates than are actually called for in the FairTax legislation.
Statement of Laurence J. Kotlikoff,
http://waysandmeans.house.gov/legacy/fullcomm/106cong/4-11-00/4-11kotl.htmProfessor of Economics, Boston University, and Research Associate, National Bureau of Economic Research
Testimony Before the House Committee on Ways and Means - Hearing on Fundamental Tax Reform
April 11, 2000
- "The lower effective marginal tax rates under the Fair Tax would also mean much smaller economic distortions than currently exists. This reflects the proposition, which is well known to economists, that the welfare costs of distorting economic incentives rises with the square of effective marginal tax rates."
- In contrast to the limited empirical analysis of consumption taxation that has been conducted to date, consumption taxation has been studied extensively with large-scale life-cycle simulation models. My own research and that with Alan Auerbach, Cleveland Fed David Altig, Kent Smetters, and Jan Walliser indicates that the Fair Tax would raise the economy's living standard over the long term by roughly 15 percent. (3) This long-run increase in output is generated by a major long-run increase in capital formation and a modest increase in labor supply.
Sure there was, as the material you quoted had a much greater context demonstrating how opponents of the NRST misrepresent it through fallacious, inconsistant and incomplete arguments.
My quote from Mastromarco and Burton was none of those.
Strange, I could have sworn the article you quoted from was concerning a rebutal of William Gale.
No reason for me to feel guilty. You're statement reads as if it were accusing me of "fallacious, inconsistent and incomplete arguments".
Actually there is a threeway potential, either people have more real income, or they pay less for goods and services, or a combination of both lower producer prices and higher wages as the economy grows.
For as pointed out by Kotlikoff
The quotes by Kotlikoff you posted don't point this out. They simply state "This proposed reform would eliminate both the personal and corporate federal income taxes as well as the payroll tax" and "Compliance costs would be vastly lower under a retail sales tax. So would, it seems, enforcement costs." You are making assumptions as to the effect of these statements. And then you try to tie these points to price drops by following them up with this quote:
"This means that when they are repealed, producer prices will come down as research conducted by Harvard's Dale Jorgenson suggests. Jorgenson finds that repealing the income and payroll tax would reduce producer prices by 20-35 percent depending on the industry."
Which Kotlikoff never said. Talk about dishonest.
Mastromarco, Burton, and Kotlikoff are very clear on the effect of the FairTax on prices and wages. It's an "either/or" situation.