In short, I favor a flat tax on individual labor income as described by Your Nightmare with one minor change: I would not tax pension contributions or ANY savings/investment targeting sustaining one in retirement.
Such a tax is a Consumption Tax, but allows for incentives to set aside tax free funds that will NEVER be taxed. I believe this to be an important feature to wean people off of the teat of government support in retirement.
The FairTax cannot offer that.
In addition, I am NOT generally in favor of a personal exemption or other mechanism that adds progressivity UNLESS such a mechanism is implemented specifically to eliminate, reduce or avoid a government transfer payment to individuals that would other wise simply keep the exempted tax amount. This is precisely why I dislike the "prebate" mechanism. It is a government transfer payment. I would rather let people keep an exempted amount than have the government send it to them. Ideally, I'd rather eliminate the progressivity, because that maximizes the general economic benefits.
This kind of Consumption tax on Labor Income has been modeled by Jorgenson and has been shown to offer similar and in some forms superior economic benefits to a Retail Sales Tax like the FairTax.
It does not have the price/wage behavior problem of the FairTax.
It can be transitioned into place smoothly with fear of two, coexisting tax systems, unlike the FairTax.
Now, hopefully, the next time we are accused of supporting the Status Quo, you'll know the accuser is lying. This is not the first time we've laid out these ideas, but many, here, continue to pretend otherwise.
Which flat tax proposal are you describing?
"Now, hopefully, the next time we are accused of supporting the Status Quo, you'll know the accuser is lying. This is not the first time we've laid out these ideas, but many, here, continue to pretend otherwise."
What you don't seem to understand is that pontificating on FR and actually getting legislation enacted are two very, very, very different things. I see no evidence that your ideas are gaining traction even among other flatters, much less among the general public or legislators. Unless and until you actually start gaining traction in the court of public opinion and actually get a bill moving forward, and unless and until your primary activity in advancing your ideas ceases to be attacking FairTaxers, you will remain an SQL in my mind.
"Such a tax is a Consumption Tax, but allows for incentives to set aside tax free funds that will NEVER be taxed. I believe this to be an important feature to wean people off of the teat of government support in retirement.The FairTax cannot offer that."
Balderdash. The "tax free" funds that will NEVER be taxed exist only in your dreams since under any form of income-based taxation this money will be taxed when spent by the hidden taxes embedded into the prices of things (and don't try the nonsense that there is no such tax or that it is minimal). The funds will be taxed when spent under either tax system. The FairTax at least has the offsetting benefit of not taxing income or investments until spent for consumption so that one can accumulate capital more easily getting a step or two up the economic ladder sooner
As for the prebate it is no more a "transfer payment" than your April 15 income tax refund. It represents a refund of taxes paid. Letting people keep an "exempted amount" merely leads us right back into the path of K_Street lobbyists fighting for "special things for special taxpayers" and would be exactly the wrong way to do things. I find the prebate much cleaner, more economically efficient, and much preferable.
the Jorgenson models actually show the FairTax better in nearly every aspect than the so-called "flat" tax (whichever one it might be). But you guys continually cavil against Prof. J's work ... now you think it's neat??? Wish you'd make up your minds. Despite the claims of you Squirrels, I see no "problems" with the wage/price behavior of the FairTax. Indeed it's highly beneficial as most people grasp.
In addition, there's no un-smooth integration of the FairTax as you imply since it functions by replaces the existing system, not co-existing with it.
As for your SQL status,it is clear that your primary objective is to attack all things FairTax since you never have any specific alternate but - just like Nightie - refer to vaguely defined concepts that don't exist in legislative (or other form). Since you don't agree with Nightie on the "non-round tax", perhaps the combined plans could be called the Dimp-Nightmare Tax plan??? Or should it be Nightmare-Dimp??? These tough choices give one a terrible headache.