The only thing about depreciation that is a compliance costs is the time it takes to track it and to fill out any applicable IRS form.
Can someone give me a link to where this research is spelled out so I don't have to do all this myself?
Dr. Jorgenson formally of Harvard did a study of embedded costs in 1997 for the fair tax organization. This study is not available anywhere on the net. I assume the fair tax organization has it, but since they grossly misrepresent what Jorgenson is on record as saying, I highly doubt they will ever release it.
If Dr. J's study is not available anywhere on the net, hopw is it you claim to know so much about it and how he does things???
Seems a BIT inconsistent.
This study is not available anywhere on the net.
One study available on the internet of a barebones NRST replacing only the income tax compared with the Armey/Spector Flat Tax doing same came up with a 20% drop in prices received by the producer in first year for the NRST, 6-8 percent for the Flat Tax.
http://www.economics.harvard.edu/faculty/jorgenson/papers/baker.pdf (November 6, 1998 revised 1999)
I assume the fair tax organization has it, but since they grossly misrepresent what Jorgenson is on record as saying, I highly doubt they will ever release it.
If you want a copy of the specific study done for the FairTax, all you have to do is drop AFFT an email and they will send you a PDF copy of it just as they did for me.
Here is a summary results taken from my copy that study:
| THE ECONOMIC IMPACT OF THE NATIONAL RETAIL SALES TAX By Dale W.Jorgenson May 18, 1997 Final Report to Americans For Fair Taxation INTRODUCTION AND SUMMARY The purpose of this report is to analyze the economic impact of substituting the National Retail Sales Tax (NRST)for individual and corporate income taxes,the Medicare,Social Security, and FUTA payroll taxes,and the estate and gift taxes.1 I consider a revenue neutral substitution-one that leaves the government deficit unchanged. Finally,I focus on the impact of this fundamental tax reform on economic growth over the next quarter century. I have summarized my conclusions in a series of charts: 1.The revenue neutral substitution of the NRST for existing taxes would have an immediate and powerful impact of the level of economic activity.The first chart gives a projection of GDP under current tax law. The second chart shows that GDP would increase by almost 10.5 percent in the first year.This increase would gradually decline to a little under 5.4 percent over the next twenty-five years. 2.Taxation of consumption would induce a radical shift in the composition of economic activity-away from consumption toward investment. The third chart shows that real investment would initially leap by a staggering 76.4 percent and then gradually fall to about 15 percent higher than under existing taxes. The third chart reveals that real consumption would initially decline by 9.1 percent. However,consumption would overtake the level under existing taxes within five years and grow rapidly under the NRST. 3.Holding net foreign investment constant,the fourth chart shows that exports would jump by 26.4 percent under the NRST, while imports would rise only modestly. This is the consequence of excluding exports from the tax base while including imports. The initial export boom would gradually subside, but exports would ultimately remain more than 13.3 percent above the level under the current tax system, while imports would fall a modest 0.9 percent below this level. 4.As a consequence of the elimination of taxes on capital income,individuals would sharply curtail consumption of both goods and leisure. In addition,the implied subsidy to leisure time would drop to zero under the NRST; under the existing tax system this is equal to the marginal tax rate on labor income. The fifth chart shows that the NRST would generate dramatic growth in the capital stock and a sharp initial rise in the labor supply that would gradually decline over time. 5.Since producers would no longer pay taxes on profits or other forms of capital income under the NRST and workers would no longer pay taxes on wages, prices received by producers, shown in the sixth chart,would fall by an average of twenty percent.The seventh chart shows that industry outputs would rise by an average of twenty percent with substantial relative gains for investment goods producers. 6.In the long run producers’ prices, shown in the eighth chart,would fall by almost thirty percent under the NRST.In addition,the shift in the composition of economic activity toward investment and away from consumption would drastically redistribute economic activity among industries.The ninth chart shows that production would rise in all industries,but the increase in production of investment goods would be relatively greater. 7.The imposition of the NRST would produce a sharply higher tax rate on consumer goods and services, but the tenth chart shows that the initial consumption tax rate would be twenty-three percent at both federal and state and local levels or only 18.4 percent at the federal level. This would gradually rise over time,but remain below thirty percent or 23.8 percent at the federal level. |