I understand that there is a significant difference between a group of commercial consultants who stay in business by selling their services and a group of university professors who do not do that. If you're trying to convince anyone that there is some sort of equivalence of intellectual honesty between thesse two groups you've got a real tough sell on your hands. I've hired commercial consulting firms of this sort and explained to them the objectives they needed to reach and guess what ... they reached them (and were then paid).
A university professor does not have his opinions for sale in that way and if you think so you're sadly mistaken.
A VAT and a sales tax are both consumption taxes.
Gee, thanks for the self-evident truism. Does that mean you think the FairTax and a VAT are somehow the same??? The FairTax is nothing like a VAT in that it taxes only certain retail sales for end consumption and does not tax b2b sales as does the VAT which (despite the theoretical refunding of the b2b taxes) cause embedded tax costs to cascade down to other business levels. And the theoretical refunding of these taxes doesn't work at all well, either, since it always adds many layers of bureaucracy and expenses in verifying and attempting to control fraud in the elephantine bureaucracy. Every VAT counttry I know of has serious difficulty with this issue and most realize that the best way to inflate the bureaucratic levels is to have a VAT.
Also, most of the countries you're trying to use as wonderful examples of the VAT tax form have actually added other taxes after the VAT was instituted. And my point still stands. Both of your sources refer to the two countries as a VAT (not a sales tax plus a VAT - which seems to be something you made up out of whole cloth). In fact it is more truly a VAT plus an income tax - and here's the current income tax table:
Tax rates 2007-08Taxable income
Tax on this income$0 – $30,000
29c for each $1$30,001 – $75,000
$8,700 plus 30c for each $1 over $30,000$75,001 – $150,000
$22,200 plus 40c for each $1 over $75,000$150,001 and over
$52,200 plus 45c for each $1 over $150,000
And both countries with their VATs (and the income tax as well) have all sorts of exclusions and exceptions which is VERY different from the FairTax which has neither of those things.
Again, tax base refers to taxable activities, not people. I suppose FairTaxers get all gleeful when they think of taxing an unproductive child 30% when he buys something with his allowance - but where does his allowance come from?
I've hired commercial consulting firms of this sort and explained to them the objectives they needed to reach and guess what ... they reached them (and were then paid).
Good, then you know exactly what's wrong with the FairTax studies.
BTW, if you admit to controlling the outcome of studies to conform to your own particular agenda, how does that impact your credibility on these threads?
A university professor does not have his opinions for sale in that way and if you think so you're sadly mistaken.
When the AFFT claims all kinds of benefits for retail sales and economic growth, why in the world would they commission a study to prove the opposite?
The FairTax is nothing like a VAT in that it taxes only certain retail sales for end consumption and does not tax b2b sales as does the VAT which (despite the theoretical refunding of the b2b taxes) cause embedded tax costs to cascade down to other business levels. And the theoretical refunding of these taxes doesn't work at all well, either, since it always adds many layers of bureaucracy and expenses in verifying and attempting to control fraud in the elephantine bureaucracy. Every VAT counttry I know of has serious difficulty with this issue and most realize that the best way to inflate the bureaucratic levels is to have a VAT.
I'm willing to bet the theoretical refunding works just fine until it meets up with reality just like the theoretical FairTax works just fine on paper and in commissioned studies.
Also, most of the countries you're trying to use as wonderful examples of the VAT tax form have actually added other taxes after the VAT was instituted. And my point still stands. Both of your sources refer to the two countries as a VAT (not a sales tax plus a VAT - which seems to be something you made up out of whole cloth). In fact it is more truly a VAT plus an income tax - and here's the current income tax table...
The example I cited also uses a much lower consumption tax rate. The point I was making (which seems to have flow right over your head) is that the imposition of a 10% tax on consumption precipitated a 37% decline in construction which resulted in a recession even with a concomitant reduction in remaining tax rates and the elimination of some taxes. Whether the effective tax rate is lower and/or if people have increased purchasing power is irrelevant when all them peeps start controlling when, where, and if they pay the FairTax. For an economy like ours, based on consumption it will be an economic disaster.
And both countries with their VATs (and the income tax as well) have all sorts of exclusions and exceptions which is VERY different from the FairTax which has neither of those things.
So what are those lists of economic activities that will be tax free you like to post, about then?