University Economists review "FairTax"

Americans for FairTax ^ | current | University Economist listed in article

[Principled]

He didn't even come up with that. It's a segment of an oft-seen cut-n-paste.

Notice he'll escape without (being able to) defending his assertion.

[Principled]

Didn't you know they're all kooks? In fact, the millions and millions of people who support the nrst are all kooks. Our founding fathers were kooks. The federalist papers are kooky ideas written by kooks too.

[Final Authority]

Simple answer to you and the other farttaxers. BS. BTW, the pre-index argument is the silver dagger into the heart of the dark monster that the farttaxt certainly is.

You can't make claims on purchasing power based on alleged facts not yet placed in evidence.

[Taxman]

The FairTax will allow everyone in America to grow richer!

And, BTW, drive a stake in the heart of the kind of class warfare arguments ignorant fools such as yourself trot out when you run out of legitimate arguments supporting your position!

[FreeKeys]

BTW, the pre-index argument is the silver dagger into the heart of the dark monster that the farttaxt certainly is.

For myself, I'm willing to go through ANYTHING to shove a "dagger in the heart" (Chuckie Schumer's favorite phrase, BTW) of THE OLD INCOME TAX for the sake of my kids, grandkids and the future of this great country of ours, in case things don't work out quite the way it's hoped (Do you want a COMPLETELY ACCURATE crystal ball?  WTFKOFAYA?) Whatever, it will kick the American economy into hyper-overdrive within 2 years if not sooner, and I'm not so mean-spirited as to put everyone else through more hell just so I won't have to suffer that long.
 

So when I go to the store to buy a $100 coat, will I now have to pay $123?

The short answer is, No.  The longer answer is also No, but it depends on what exactly you mean by the question.

     If you're asking whether a $100 coat you see for sale before passage of the FairTax Plan will cost $123 under the Plan, the answer is no because -- as you'll remember from previous chapters -- that $100 price is already inflated by 22 percent worth of embedded tax.  Once those embedded taxes fall away, the 23 percent FairTax will bring the price right back to the $100 level.

     If you're asking whether a $100 coat you see for sale after passage of the FairTax will actually set you back $123, the answer is no because the FairTax was designed as what's called an "inclusive" tax -- that is, the tax is included in the list price of the product.  When you go to the store and purchase an item for $100, in other words, the retailer will get $77; the remaining $23 is paid to the federal government.  This is the biggest difference between the FairTax and most current state sales taxes, which are "exclusive" -- that is, added to the price of the merchandise at the time of the sale.  Since our current income taxes are figured on an inclusive basis -- that is, they are taken out of our paychecks, not added to them -- it was decided to handle the sales tax in exactly the same manner.

-- "Questions and Objections," The FairTax Book, pages 150-151
 

also see:  FairTax FAQ #17

<<<<<<<<<<<>>>>>>>>>>> Find all 35 ways to LISTEN|to|BOORtz over the web  including evenings and weekends -- HERE: http://FreedomKeys.com/boortzcast.htm <<<<<<<<<<<>>>>>>>>>>>

[Final Authority]

Simple answer, BS. A retail product now selling for $100 will cost that $100 plus any sales tax. That is exactly the way it works now between two states, one with and one without sales tax. It will be no different with a NRST.

How do you deal with the prospect of paying a pre-index payment of 23% of the trillions in private accounts made with post tax money? The farttaxers can't and that is indeed the dagger into the heart of this socialist plan to make everybody sign up for their government basic income guaranty, aka, prebate.

BTW, stuff the graphics and the copy and paste.

[phil_will1]

"What I read from this list is that the famous economists who work in taxation do not agree with this group on 'fair taxation.'"

The "famous economists who work in taxation" do not agree on much of anything in terms of a single plan that they all support. Therefore, if we follow their lead, the current system will continue to grow like a cancer, the trade deficit will continue to swell and Americans will grow progressively more frustrated each successive April 15.

[phil_will1]

To: Eaglewatcher
Excellant post!
Of course the resident naysayers will appear and attempt to trash ALL if these learned scholars.


3 posted on 11/02/2005 10:15:18 AM PST by Bigun (IRS sucks @getridof it.com)

"What an undistinguished list of academics. I know several of them. Paul Rubin at Emory is quite bright and is a good political economist, but not a taxation expert. In fact, many of these academics are NOT experts in the economic consequences of tax law changes.

What I read from this list is that the famous economists who work in taxation do not agree with this group on 'fair taxation.'"

Whoa! Bigun's clairvoyant!!

[phil_will1]

"The so called FairTax will allow the rich to grow even richer, creating a form of economic feudalism in America--even more so than our current condition."

Oh no! Can't have people getting rich in America, can we?

"From each according to his means, to each according to his needs."

Are you sure you are on the right blog? Class warfare is a bit out of place here.

[FreeKeys]

How do you deal with the prospect of paying a pre-index payment of 23% of the trillions in private accounts made with post tax money?

I don't know; you may have a valid question there.

BTW, stuff the graphics and the copy and paste.

I don't take orders from hair-trigger control-freak moderator-imposters who don't even have the balls to put up a profile page.

[phil_will1]

"You can't make claims on purchasing power based on alleged facts not yet placed in evidence."

Say what? Is this a courtroom? What are your rules of evidence, Your Honor?

[groanup]

How do you deal with the prospect of paying a pre-index payment of 23% of the trillions in private accounts made with post tax money?

Most of those with "trillions" in post tax money have many more trillions in pre-tax money. That pre-tax money is suddenly relieved of any taxes or penalties. So MOST would see a blessing on MOST of their money and a possible decline in the purchasing power on a smaller amount of their money.

[Principled]

Simple answer to you and the other farttaxers. BS.

Ooohhhh! Good one! Simple, to be sure, but not any answer.

You deny the existence of tax costs in the prices of goods and services today - and you want to be taken seriously?

[Principled]

A retail product now selling for $100 will cost that $100 plus any sales tax.

You are asserting that our income tax system adds no cost whatsoever to prices today. You are wrong, and appear ignorant.

Many costs associated with our income tax (which you refuse to believe exist), will no longer be in prices when they're gone (duh).

It's amusing to see someone actually say that the income tax system doesn't inflate prices.

[Principled]

...this socialist plan to make everybody sign up for their government basic income guaranty, aka, prebate.

I believe that you alone, among the millions of individuals who have reviewed this plan (have you reviewed it?) are the single individual who thinks the nrst is socialist.

Are you not aware of the current income tax's ties to marxism?

Further, the prebate (not a BIG), is voluntary. Unlike filing for income taxes - which is mandatory - even if all you're doing is getting a refund.

There is no requirement at all to either file for a prebate nor to receive one. You are free to elect to not file (again, unlike our current income tax).

You really don't know what you're talking about.

[FreeKeys]

The so called FairTax will allow the rich to grow even richer, creating a form of economic feudalism in America--even more so than our current condition.

Sorry 'bout the overkill, folks, but Terminal "Authority" [snicker] needs a spanking:

CLICK ON THE GRAPH TO SEE A CLEARER VERSION OF IT:

And check out the charts on THIS page, and on THIS, THIS and THIS one.

   "Never mind the low wages and harsh living conditions of the early years of capitalism.  They were all that the national economies of the time could afford.  Capitalism did not create poverty -- it inherited it.  Compared to the centuries of precapitalist starvation, the living conditions of the poor in the early years of capitalism were the first chance the poor had ever had to survive.  As proof -- the enormous growth of the European population during the nineteenth century, a growth of over 300 percent, as compared to the previous growth of something like 3 percent per century."-- Ayn Rand

   "Economic growth was non-existent during the centuries 500-1500 -- and per capita GDP rose by merely 0.1 percent per year in the centuries 1500-1700. In 1500, the estimated European per capita income was roughly $215; in 1700, roughly $265." -- Andrew Bernstein

---

|  THE FIXED QUANTITY OF WEALTH FALLACY  | The fixed quantity of resources fallacy  |
| THE FIXED QUANTITY OF RESOURCES FALLACY  | "The Sweatshop Scam"  |  more | more |

---

As Robert A. Heinlein said, "Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded -- here and there, now and then -- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right thinking people. Whenever this tiny minority is kept from creating or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty."

In a modern open-market capitalist society, entrepreneurs get rich and the poor get better off as a result -- OF COURSE they're not going to get as rich as fast (duh). So, of course the gap thereby gets wider -- but the top AND BOTTOM of the gap both rise to levels much higher than before. The gap is widening?? Well, hooray for everyone’s sake! ESPECIALLY the poor!

If the rich weren’t free to "get ever richer," developing or investing in ever-increasing productivity, the poor would NEVER have any chance to improve their conditions at all, let alone to obtain their ever-increasing access to the latest tools of that expanding productivity, making every hour of their labor ever-more valuable. And YOU wouldn't EVER have the chance to read this or anything else brought to you by advanced technology. 

Freedom incents the creators to empower YOU and as many other people in the world as possible. There's little an entrepreneur likes better than a bunch of ever-richer loyal customers. Remember, the wealth you see around you didn’t always exist; it was and is CREATED wherever the right CONDITIONS OF FREEDOM (including the rule of natural law evenly applied, with the rigorous protection of individual rights including property rights and respect for contracts, effective prosecution of the perpetrators of force and fraud, and the ease of engaging in trade without the interference or "permissions" of politicians and bureaucrats) are established and guaranteed._

Now recognize the true nature and scope of evil and wherein it really lies. And don't be too limp a wimp to to call viciousness viciousness even if all your friends and neighbors fawn like groupies over any mantle of global "compassion" in which the evil appears to be cloaked.

-- all from THIS PAGE -- all typed and produced over the YEARS, as part of my contribution to the cause of freedom, by ME. So I copied and pasted it today. SO, Mr. "Authority", SUE ME,
and, uh...click THIS:

K|$$ MY @$$ ! 
(354KB)

[snowsislander]

If you're asking whether a $100 coat you see for sale before passage of the FairTax Plan will cost $123 under the Plan, the answer is no

That's because the coat will cost you $130, not $123.

When viewed from the exclusive rate, which is how sales taxes are charged and how this question is framed, the FairTax rate is 30%, not 23% (which is the inclusive rate.)

And that's part of the point: we certainly want people to understand the huge bite that taxes take out of our economy, and seeing a 30% national retail sales tax will certainly get some attention.

(I am in favor of replacing our income tax scheme with a national retail sales tax, but the FairTax has provisions that I don't care that much for. I can support it and I do since it is still far better than the income tax, but I would much rather see a NRST without a prebate. I think the rate could be far lower than 30% if that were to occur.)

As to some sort of general deflation occuring if we were to remove the income tax (which is what the article is suggesting), that's not likely --- I hope. Deflation, as the Japanese can tell you, and our ancestors could also, isn't all cakes and tea.

Pricing isn't a direct function of seller costs; seller's costs do have some bearing since they set a rough sort of floor, but prices are what the market will bear, not what it costs a producer. If prices were simply based on producer costs, all major brand breakfast cereals would cost far less... ;-)

[pigdog]

Stuff the "basic income guarantee" nonsense. You've had it pointed out about a zillion times that the prebate is nothing of the sort.

In addition the thing now selling for $100 will drop in price prior to the addition of the FairTax so it will not be "plus the sales tax" as you erroneously state. It will probably end up at roughly the same price as at present if you ignore the fact that to buy the $100 thing right now you have to earn much more than that to HAVe THE $100 to make the purchase.

With the FairTax, you actually have much more "in pocket" since you no longer have the income tax and withholding removed from your check, but receive it AND you also can obtain the prebate if you wish. YOU'RE MUCH BETTER OFF UNDER THE FAIRtAX.


Also, don't forget that the price of that $100 thing right now has been raised by the effects of cascading embedded tax costs (making you have to earn even more than you should to buy it. That goes away, too, under the FairTax.

That's a whole lot of difference. Your "double taxation" idea is a non-starter, too as several have also pointed out.

[n-tres-ted]

Thanks for the post. Nice find!!

[Principled]

...prices are what the market will bear, not what it costs a producer

...as long as prices exceed costs as a rule.

A business must generate revenue sufficient to pay expenses. The only indefinite revenue stream they get is from sales revenues.

To say expenses play a part in prices is accurate. Connoting that prices do not include all expenses is not.