Posted on 05/20/2008 7:11:25 AM PDT by ReleaseTheHounds
Kurt Hauser is a San Francisco investment economist who, 15 years ago, published fresh and eye-opening data about the federal tax system. His findings imply that there are draconian constraints on the ability of tax-rate increases to generate fresh revenues. I think his discovery deserves to be called Hauser's Law, because it is as central to the economics of taxation as Boyle's Law is to the physics of gases. Yet economists and policy makers are barely aware of it.
Like science, economics advances as verifiable patterns are recognized and codified. But economics is in a far earlier stage of evolution than physics. Unfortunately, it is often poisoned by political wishful thinking, just as medieval science was poisoned by religious doctrine. Taxation is an important example. ...
Mr. Hauser uncovered the means to answer these questions definitively. On this page in 1993, he stated that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." What a pity that his discovery has not been more widely disseminated.
(Excerpt) Read more at online.wsj.com ...
You right about the blinded part -- good luck with the rest.
And the CORRESPONDING assumption in the fairtax would be that the business remit the sales tax, correct? So under the fairtax, the hooker does not pay anything when she purchases something because it is the BUSINESS who pays the tax. That is where the bait and switch takes place in your analysis. If you truly stick to consistent assumptions you get the right answer. BTW, that is the most straight forward set of assumptions, in the embedded tax model it works out that the John is cheating the system in both cases and not the hooker.
...it is impossible to get through to you.
Coming from you, of all people, THAT is hysterically funny.
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
Under the nrst, the consumer pays the tax included in price and the business remits.
NOw who's changing?
Just admit it AR, you're looking foolish.
INcome tax; criminals pay zero. NRST: criminals pay when they consume.
No that is the consistent with the assumption. Pick ONE, and stick with that assumption for BOTH systems. Business/employees pay the tax OR consumer pays the tax. My analysis uses the SAME assumption for both cases, it is yours that changes. You are the one who first assumes it is the business/employees that pay the tax under the income tax, then CHANGE and start assuming it is the consumer who pays the tax under the fair tax. Really, stick to ONE. Either the consumer pays or the business/employees pay. Be consistent for both.
I’ll tell you what AR, you tell me what assumptions you want me to use....again. I’ll use them...again.
Remember though, under this analysis workers and employees are pocketing ALL the savings, no saving is passed to the consumer. The fairtax then adds 30% to the price of ALL goods and services. People have more money in the pockets, but goods and services cost more.
Because I see PIT and EE payroll paid by individuals, not business. The way you have it written seems to indicate otherwise. What do you mean "workers"?
You'll have to be more specific [to avoid the future charge of me changing again].
Who pays what under your desired assumptions?
“I think the top third of taxpayers should pay 25%, the middle third 15%, and the bottom third — all of them — a token payment of 5%.”
That makes sense to me.
Someone (Mellon?) came up with the low tax rate on upper income that fueled the roaring 20s. He asked the highly affluent of his time how much they would be willing to pay in taxes and it was around 20%. He figured that anything higher would lead to efforts to shelter income, etc.
On the low end, I think there is merit in having EVERYONE pay some of the expense of Government. We ALL benefit from having a nation, and that takes some level of expense. A case can be made that the poor benefit the most.
Better to be poor in America, than anyplace else. The national socialists of the 30s (NAZIs) would have exterminated them. The international socialists of the same time (communists) would have worked them to death in labor camps. Even today, it’s much better to be a poor American than, for example, a poor Mexican.
“There is a flaw in the model here or WSJ is somehow misintepreting what the research means.”
I don’t think there is a flaw as I have seen similar data before. If this is wrong, someone should be able to provide corrected data, and I’ve not seen it. So, take a good look at that graph. It’s real and it’s telling you something.
You might also want to take a look at posts 33 and 76, and maybe reread the article.
I looked up (and downloaded) the data yesterday (a good piece from the Dallas Fed) and reproduced this chart along with the chart for the growth of the inflation adjusted GDP. If you’re interested, I can email a copy.
Yes, I’d like a copy.
If he ever admits it, please ping me. I suspect some persons are intentionally obtuse.
See the first quote on my profile page.
Nice! Now I’ll know where to go when I’m trying to recall that great quote! Interesting to see the things that stick in Fellow Freeper brains!
Well, he has chosen to not continue digging.
He sees it - he’s not obtuse - but he isn’t admitting it.
The next thing for you to do is to compare what happens to her earnings next under both systems. Under the income tax, those earnings are never taxed. Under the nrst, those earnings WILL be taxed.Selective memory?
Under the current system the John pays her with his after tax income...her income is tax free....The government collects from the John
Under the Fairtax the John pays with his prebate money...The government collects the tax from the prebate when the hooker spends it...
Then the hooker also gets a prebate to offset the tax s/he paid. How convenient that you didn't remember the prebate.
Great article....thanks for posting it!
I’ve already quit my second job due to too much being lost in taxes.
Self-employment tax, income tax, AMT....screw them all.
Lower my tax rates, and I’ll work more....raise them? I’ll work less and enjoy life.
It just means the nrst will indeed allow those who currently legally particpate in the income tax system to pay less... because criminals and illegals will pay more.It's not about how much they would pay, it's about where they get it.
Not all illegals work under the table. Some have withholding by using fake SS #s.
After Fairtax Scenario:
A criminal robs a legally participating retail store. Technically 23% of all the proceeds in the cash drawer is federal tax to be paid. After the robbery only the criminal, not the business owner, would be paying any tax...Law enforcement gets involved.
How does that reduce my taxes again?
After Fairtax Scenario:
A legally participating antique/used gun dealer is robbed of his inventory. There is no tax on his sales, however he does pay tax from his proceeds when he spends it.
The robber sells the merchandise for 10 cents on the dollar, then pays tax when he spends it...Law enforcement gets involved...How does eliminating legitimate income from law abiding businesses reduce my taxes again?
After Fairtax Scenario:
You're taking the kids/grandkids to Disney World with a pocket full of cash ready to be taxed to the max. Some low lifes rob you of your cash leaving you with nothing. But they pay tax when they spend YOUR money on their kids at Disney World.
How does any criminal act reduce our taxes again? And don't forget they all get their prebate. Including the illegals with the fake SS#.
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