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Ancient_Geezer is conspicuous by his abscence...

Very very strange, indeed. must be some kind of conspiracy, or perhaps hiding in a corner.

Or perhaps ancient_geezer does not respond to pings never received from those who would rather not have him show up as they gossip.

Perhaps, even the omniscient ancient_geezer does not view threads before the time he gets up in the morning.

However since ancient_geezer is here now, lets just look at what your bug is all about. You know the meat in the actual reports that Jorgenson has published on the subject, rather than interpretaions of representations made about his model six years later after the fact and after Jorgenson has begun promotion of his own tax reform idea (the Efficient Tax).

You know, the "obvious" assumptions Jorgenson makes in constructing his general equilibrium models concerning wages that Jorgenson fails to mention in his descriptions, even for his "Efficient Tax", you know the assumption that every one makes, that employers are expected to steal witholding from their employees when income taxes are repealed.

Of course not mentioned by the opponents of the NRST and the article of this thread is the engaging result provided by Jorgenson's study. Namely, in repealing income taxes alone prices to the producer are expected to fall 22%, providing a net increase in purchasing power of the consumer (with tax included) of 3% in the first year rising to 10% in the 25th year. All for an NRST replacing only income taxes and leaving SS/Medicare tax inplace.

Of course everyone should naturally expect wages themselves to go down with results indicating:

more than 10% GDP growth,
more than 70% increase in personal savings and investment,
more than 25% increase in exports from US industries closing the trade gap,
production quantities rise more the 20% for most of the 50+ industry sectors in his model

all of which must assuredly force wages in the dumps. At least according to opponents of the FairTax legislation.

Yes indeed it is a real strange conclusion that maybe wages would at least stay about where they are today with such results, lacking any statement to the contrary in his published studies or in assumptions made in their model descriptions.

For those who care to look beyond the hoky headlines, here is a link to Jorgenspn's IGEM preformance in a national retail sales tax replacing only income tax, (not to mention anything about SS/Medicare the Fair Tax act also implements.) Interestingly it also provides a comparison with FlatTaxes as well. Are we to make a conclusion concerning falling wages with Flat Taxes as well?

http://www.economics.harvard.edu/faculty/jorgenson/papers/baker.pdf

Revised April 12, 1999.
THE ECONOMIC IMPACT OF FUNDAMENTAL TAX REFORM
by
Dale W. Jorgenson Harvard University
and
Peter J. Wilcoxen University of Texas, Austin

This paper was prepared for presentation at the
Baker Institute Conference
on Tax Policy Reform
Rice University Houston,
Texas November 6, 1998

We have simulated the impact of implementing two different versions of a consumption tax at the beginning of 1996. The first is the Armey-Shelby Flat Tax. The Armey-Shelby proposal levies taxes on the difference between business receipts and the sum of business purchases and business payrolls. Labor income is taxed at the individual level. An important feature of the proposal is the system of personal exemptions at the individual level that we have described.

The second proposal we have considered is the National Retail Sales Tax. The tax base is the same as in our simulations of the Flat Tax. However, the method of tax collection is different. The Arrney-Shelby Flat Tax preserves the existing structures of the corporate and individual income taxes, but alters the tax base. The National Retail Sales Tax eliminates corporate and individual income taxes; retail establishments would collect the taxes. This would require a broad definition of these establishments to include real estate developers and providers of services, such as medical, legal, and personal services. Most important, no personal exemptions are provided.

If Fair Tax proponents have made an error in interpreting Dr. Jorgenson results, perhaps you can point out where Jorgenson has indicated which direction wages trend in his papers, and what one is to make of his conclusions on the basis of what he actually published rather than interpretations of his communications 6 years after the fact.

The conclusions begin on page 25 of the PDF, after his description of his IGEM model implementation, for those who would rather get to the meat of the results first. However I highly recommend reading his descriptions to determine just what his model is held to represent.