Posted on 08/24/2005 9:40:44 PM PDT by RobFromGa
We have a massive black market now. We always will- it will just shift.
By the way, in the State of Florida, where we are funded 100% by sales tax, I can tell you confidently that the Dept. of Revenue is nothing like the IRS in terms of intrusiveness. Their tactic is to audit sales receipts, but that's nothing compared to the info needed to determine income.
excellent work, Rob. The books should be removed from the shelves due to this HUGE error.
Thank you for a decent, civil reply.
The only thing I have ever been looking for from FairTax proponents is an honest discussion.
You are so focused on the specific numbers that you seem to have missed a vital point in Dr. Jorgenson's first response to you:
Your analysis of employee income, producer costs, and consumer prices is based on a static view of the world that does not take into account the dynamic impacts of the changes to the tax system. Without taking those effects into account, your numbers aren't going to make sense no matter how you apply your assumptions.
I'm not sure what they should do at this point, but I plan to call Mr. Linder today.
you miss the point, I am not debating whether the actual FairTax is a good or a bad thing for the econoy and for Americans in the long term through economic growth.
I am attempting to expose a $1.3 Trillion misrepresentation in the way the plan is sold in The FairTax Book, and this is being accomplished. Once the dust settles on this correction, we can debate away on the relative merits of the actual plan.
But the fair tax assertion that prices immediately come down 20% can no longer be made.
As far as this specific issue, and whether or not it is a misrepresentation, I will reserve judgement until I hear either a rebuttal or an admission from the FairTax folks -- it is possible that something is being missed.
My interest in the FairTax has never been the economics anyway (though the discussion threads always seem to get dragged that way). Let me repeat something I posted on a different thread:
Most of the recent discussions and arguments about the FairTax here on FR have been of the economics variety, and have basically boiled down to "how many angels can dance on the head of a pin" arguments. Nobody really knows what the impact will be due to the dynamic effects of changes to the tax code (even tax cuts under the current system are hard to predict the effects of accurately), though guesses can be made by using certain assumptions -- and its these assumptions that appear to be the main point of contention in the arguments.While it may be worthwhile to have these discussions, in my opinion, they miss the most important point of all with regards to the FairTax.
Freedom.
Imagine having no IRS to pour over your financial records.
Imagine not having to report your personal finances (income and certain expenditures) to the federal government.
Imagine not having to make investment decisions based on what will or won't subject you to additional taxes.
Imagine a tax system in which your total liability is simple, straightfoward, and doesn't require an accountant or computer software to calculate (especially when different accountants come up with different answers).
Imagine a tax system that doesn't play games with whether or not you're rich or poor, black or white, male or female, or any other social or economic factor.
That is the freedom that the NRST/FairTax will bring. That is the major reason why all of the other schemes advocated (flat tax, transaction taxes, etc.) are unacceptable.
Another BIG advantage is that Ministers can preach for or against candidates or any social issues without loseing their tax exempt status (there being no taxes).
Obviously, politicians won't stop spending more and more money so the pressure has to come from outside. I want people to explicitly pay ALL their taxes, not have them hidden in a receipt or be funny money at pay time. I want people to deposit their FULL salary into their bank account and then have to write checks to the IRS quarterly to pay taxes. No withholding, etc.
Only if you subscribe to a static model of the economy.
That's basically my reason for supporting the FairTax too.
Oh, and by the way, you have it completely backwards -- if Rob's analysis is correct, Jorgenson still maintains that the prices will drop by 20% or so, but that employees would not receive their currently withheld income and payroll taxes.
Of course, that would violate a large body of contract law, but that's probably because Jorgenson just makes an assumption to make modelling the changes easier, not that this will necessarily be the case in practice.
What's to stop the politicians from placing "special" taxes on expensive items, like a luxury tax? For example, a car that's over $20,000 has a luxury tax of 100%.
What stops them now? The last time they did something that stupid, they practically destroyed the yacht-building industry in this country.
No kidding, we have only been debating this point for 6 years
I'm oughta here bump
Your forgetting (for some reason) the 1/4 - 1/5 of the current (untaxed) economy that avoids paying social security, Medicare, and income tax entirely.
But anytime ANY of these people makes a purchase after the Fair Tax begins, that exchange is taxed.
Now ole Rob claims that almost all of the current "underground" (untaxed) purchases (he makes a incorrect assumption that the underground econmy is only drug dealers and prostitues!) are used goods and from pawn shops that would not be taxed, but that is wrong.
I never made that assertion, and haven't made a single reference to undergroung purchases, nor am I commenting on the potential black market that would result from a 30% tax on every retail sale.
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