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To: SolidSupplySide

"Revenue neutral" means bringing in the same amount of revenue to the government.

It means bring in the same amount of money to government as the tax law it replaces would.

If government gets the same amount of money as it would under the tax law it replaced, the economy gets the same as it would as well. That is revenue neutral and economically equivalent.

10 posted on 12/16/2005 2:45:28 PM PST by ancient_geezer (Don't reform it, Replace it!!)
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To: ancient_geezer
If government gets the same amount of money as it would under the tax law it replaced, the economy gets the same as it would as well. That is revenue neutral and economically equivalent.

You seem to be caught in static analysis. You cannot see that reducing property tax and increasing sales tax will affect the decisions of economic participants.

A flat income tax and a sales tax will certainly change the behaviors of economic participants over today's income and wealth tax. But in steady state, a flat income tax and a sales tax will affect economic participants in the same exact manner. The only difference is that a sales tax has destructive consequences at transition due to the necessary increase in money supply.

14 posted on 12/16/2005 2:54:33 PM PST by SolidSupplySide
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