Um I'm not saying after-tax prices will fall by a substantial amount, but that the RST will not increase prices by a substantial amount(after tax), effectively IMO most people will be paying less taxes with NRST than without it..
There serious questions about how the future under a sales tax scenario might develop: Will the dramatic growth predicted be inflationary (can production capacity grow at least as fast as the money supply)especially since consumption is predicted to decline in the early years?
Consumption is also predicted to increase in anticipation of the tax, but all these things will soon reach a market equilibrium just like any other changes inthe market. Dramatic growth is over time not immediately.
Can Congress be restrained from morphing the proposed structure in to a multi-tiered rate structure to make it more "fair" ... you know, tax luxury items at a higher rate, tax necessities at a lower rate, etc.?
Yes
Can Congress be trusted to avoid raising the rate or expanding the base (taxing imputed rents on owner-occupied property) if changes in purchasing behavior result in substantial revenue shortfalls?
The rate is set by law as well as the base, did you read it? Congress may make changes to laws just like it does now, the difference is we start with a clean slate not a dirty one. and it will be easier for the people to oppose any changes they dont want.
Can Congress be trusted to not start handing out industry favors by exempting healthcare or energy consumption because they are perceived to be too expensive when taxed?
Congress does what the people want and currently they hide what they do..any changes in a new clean law will be debated vigourously and out in the open as opposed to what happens now.
Can Congress be trusted to not curry political favor with "the masses" by steadily increasing the prebate to effectively "soak the rich" and exempt the majority of voters?
Like they do now? More likely they can be restrainded under a new simple clean law than the old loophole ridden law.
Can Congress be trusted to avoid the invasive information gathering, supposedly done away with, by requiring states to collect similar information on consumers and their purchases under the guise of plugging the tax leaks in the system?
Uh what can be more invasive than what we have now? Must report all income, vehicle, medical expenses,deductions, contributions,dependents, interest etc,,LOL... Tax leaks are plugged at collection points not the end user, except for business exemptions. A straw argument.
Will the "guilty until proven innocent" premise now afforded the IRS really be changed under the FairTax (since you apparently need to show your receipts to prove you paid the tax if audited)?
Another straw argument, no receipts need be kept by the consumer.
Do you really think large numbers of people will stop buying new goods just to send a message to Congress? What will that do to the affected industries (for every dollar you refuse to send to the treasury, you deny private industry three dolllars!)? How do you buy used food or used rent anyway?
People will at least have the opportunity to send a message that they dont now. It doesn't take much to get Congresses action, just like a sick out for a few days..the message can get to them without any real damage to businesses. Hunt, fish, grow, campgrounds, you know like the old days.
Your tagline says: "Question Authority." Well I'm questioning it and you seem put off by it. Work with me and maybe we can find common ground
I am not put off by you questioning authority, but would hope you really investigate and consider the NRST and not stay with preconceived ideas. There is lots of common ground for those open to new ideas and those that realize what we have now is not fair or working. I never claimed to have all the answers, and am here to learn and discuss the issue.
thanks for bringing these important questions and answers to light...
Well, that is one of the central points of debate. Others on this and other threads are indeed claiming that after-tax prices will fall WRT real wages (ie. wages stay at pre-FairTax gross levels, and producer -- pre-tax -- prices decline enough to allow after-tax prices to remain roughly constant ... that won't happen.
most people will be paying less taxes with NRST than without it.
Hmmmm ... this is where the devil really IS in the details and opinions aren't worth a whole lot. Perhaps we can dig into that claim on another thread.
Dramatic growth is over time not immediately.
Actually no, the dramatic growth is in the beginning. Jorgenson predicts GDP to jump 13.2% in the first year then fall to 9% over the base case over time. Investment (a component of money supply) jumps 78% in the first year before settling down. The labor supply jumps 30% in the first year. It's not at all clear that these discontinuities, coupled with pricing behavior, will not be inflationary.
The rate is set by law as well as the base
... and that is no different than it is today.
In general you display a lot more faith in Congress than I have. Which masses are going to oppose raising the tax on vacation homes, luxury yachts, private aircraft and such in exchange for a healthcare consumption exemption or rebate? You're dreaming if you think this new law with its ability to buy massive numbers of votes is immune from tampering.
Tax leaks are plugged at collection points
Unless the leak is somewhere else ... if people are trading in under-the-table new goods, none of them, represents a collection point. The Bill makes the taxpayer liable for the tax, not the collection agent. If a taxpayer (not the retailer) is suspected of cheating how does he prove his purchases are legitimate? Who has the burden of proof?
People will at least have the opportunity to send a message that they dont now.
This is another area where your faith exceeds mine. First, most expenses by most people go to food, housing, clothing and transportation. Food is off the table; people are no more inclined to stop eating or grow their own to protest tax policy than they are to protest current prices. New housing represents a too small transaction volume to be representative of massive protest, and operating costs fall into the food category: you gonna turn off your electricity because you think the tax is too high? Used clothing ... to protest tax policy??? Finally transportation. First gas: not even a doubling of fuel price has significantly dented demand ... you think people will stop driving to protest tax policy? As for new car purchases, presuming a significant enough boycott of new vehicle purchases to get congress's attention (how many quarters of boycott are needed?) what do you think will happen to the folks employed by auto manufacturers?
Besides, any boycott of taxable goods is likely to have an inflationary effect on the prices of substitutes making the substitutes less attractive. I am not put off by you questioning authority, but would hope you really investigate and consider the NRST and not stay with preconceived ideas.
Sadly, this comment represents a common belief among folks I've debated with here. For some reason, they seem to think I (and others of my ilk) have not "really investigated" the NRST. I won't pretend to guess how much time I've spent finding, reading, and understanding dozens of publication by dozens of economists on this topic. I don't now how many times I've sifted through the NIPA tables or Tax Stats. I can't even begin to adquately estimate the hours I've spent in constructing my own models based on those publications. And I'm embarrased to think of the number of hours I've wasted responding to people here who either ignore, avoid, or simply attack that investigation then dismiss it out of hand without bothering to actually ponder what is said. There is no debate here with some; there's only dogma.
I came into this discussion several years ago with no preconceived notions. I looked into the claims, I did the reasearch, I asked questions, I pondered the responses, I did the math, and I reached conclusions on my own ... some in agreement with the FairTax, some in opposition to the FairTax.
The least you could do is leave room for the possibilty that some of us who disagree are doing so from a perspective of knowledge and integrity.