All of this Jorgenson stuff is based on the idea that workers will receive smaller gross pay, it all falls apart once you give the workers their full paycheck.
And it is ten years old, the tax code, and the world has changed. Businesses have become more global, and eliminated layers of cost, corporate and capital gains taxes have changed, income tax rates have been lowered.
Get Jorgenson to do a new study, and make it clear to him that you want him to be sure and keep all the workers and business owners getting to keep their income and payroll taxes as a windfall pay increase, and have him turn his Big Ol' Econometric Forecasting Machine back on and see if it doesn't spit out something awful.
Note that even under his flawed assumptions, he still had Crude Oil and Refining with large increases. With realistic current numbers those will only get worse.
All of this Jorgenson stuff is based on the idea that workers will receive smaller gross pay, it all falls apart once you give the workers their full paycheck.
Mere assertion no matter how many times it may be repeated does not change reality. Sorry your presupposed conclusions that such must be true are simply not supported in the actual study.
And it is ten years old, the tax code, and the world has changed. Businesses have become more global, and eliminated layers of cost,
Yep and tax related costs have been rising due to evergrowing tax system complexity and the increasing pace of tax code changes coming out of Congress.
corporate and capital gains taxes have changed, income tax rates have been lowered.
Yep, and subsequently the original 23% estimate of the revenue neutral tax rate for the NRST is falling rapidly. During that 10 years the the revenue neutral rate calculated for the FairTax has ranged between 24% and 19% with 2003, the latest done, standing around 19.5%.
To provide a idea of the magnitude and direction that revenue neutral change in tax rate has been, the Tax Foundation's Tax Freedom Day reports provide useful historical tables of the change in tax rates relative to dollars available for use in consumption:
refer Tax Freedom Day 2005 report PDF: Special Report No.134, April 2005
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Total Effective Tax Rates by Level of Government |
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| Year | Federal | State | Total |
| 1996 | 21.3% | 10.4% | 31.6% |
| 1997 | 21.8% | 10.3% | 32.1% |
| 1998 | 22.4% | 10.4% | 32.8% |
| 19990 | 22.5% | 10.4% | 32.9% |
| 2000 | 23.1% | 10.4% | 33.5% |
| 2001 | 22.2% | 10.5% | 32.7% |
| 2002 1 | 19.6% | 10.2% | 29.8% |
| 2003 2 | 18.8% | 10.1% | 28.9% |
| 2004 3 | 18.4% | 10.2% | 28.6% |
| 2005 | 19.0% | 10.1% | 29.1% |
| Notes: Leap day is omitted to make dates comparable over time. Since depreciation is not available to pay taxes, GDP is an overstatement of spendable income for the purpose of measuring tax burdens. Depreciation is netted out of NNP. "Overall, NNP provides the best statistical representation of the common notion of “spendable” resources. In 2004 NNP was $10,371.6 billion. Like GDP and PI, NNP is a component of the National Income Product Accounts (NIPA). These accounts are computed and compiled annually by the Commerce Depart-ment’s Bureau of Economic Analysis (BEA)." 0 First year introduction of HR2525(Fair Tax legislation). 1 Economic Growth and Tax Reform Reconciliation Act of 2001 Sources: Office of Management and Budget; Internal Revenue Service; Congressional Research Service; National Bureau of Economic Research; Treasury Department; and Tax Foundation calculations. |
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Get Jorgenson to do a new study, and make it clear to him that you want him to be sure and keep all the workers and business owners getting to keep their income and payroll taxes as a windfall pay increase, and have him turn his Big Ol' Econometric Forecasting Machine back on and see if it doesn't spit out something awful.
Get your buddies together and chip in to hire him to do a study for you.
Or better yet, wait for a few months down the line as everyone and his brother-in-law commissions new studies from many economists based on the current tax code and condition of the economy to evaluate Flat Tax, fair tax, USA tax, etc proposals as they fight for recognition and the public's thumbs up.
Note that even under his flawed assumptions,
What flawed assumptions are those, be specific by citing them from his studies.
he still had Crude Oil and Refining with large increases.
Now how could that possibly happen with flawed assumptions? Surely a bought and paid for economist wouldn't show something negative about the tax system he has been hired to present would he? One would think that a Harvard hired gun could have at the least chosen a set of flawed assumption that would make the FairTax look better than that.
With realistic current numbers those will only get worse.
How and why?
The performance of the FairTax, NRST, FlatTax and other tax systems analyzed by Jorgenson are measured against the tax system in place, all of which operate under the same conditions whatever oil prices may be due to other reasons. The output results of the Jorgenson studies are relative to the tax law replaced as it manifests its impact on the economy above and beyond other factors in the economy.
For instance, a 10% gain in GDP under the FairTax is relative to what GDP would be under the tax law replaced in the same economic scenario otherwise.
Changing market oil prices changes the economy for all tax systems in much the same manner and degree. The relative measure as regards changing tax systems, the effect of one tax system compared to another, would remain much the same regardless of how oil prices or any prices change for other reasons.