[Filo]

The FairTax is only revenue neutral if scored statically - which is what congress requires for consideration. You won’t find a single reputable economist who will agree that the economy is static, rather than dynamic.

True, but that doesn't change anything. The fact remains that unless there is some "hidden" magic in the FT (there isn't) it collects the same as current tax methods.

Some have suggested as a goal doubling the size of the US economy within the first 15 years after the FairTax is enacted.

And I suggest that we can triple the economy in 10 years if I can learn to poop gold. . .

Even if the economy isn’t doubled, it is still certain to grow at a much faster rate than will the labor force.

And yet nobody on the FT side has yet put forth a credible argument as to why the economy would grow. The only thing that is changing is the method of taxation. The only possible improvement is the reduction (not elimination) of compliance costs.

How does that grow the economy?

Don't get me wrong, I can see how the government can easily manipulate things to grow their revenue, but that's different.

The FairTax is the only proposal that I am aware of which addresses the core issue with both of these programs, which is the demographic bubble and the unsustainable dependency of the system on payroll revenues. Without addressing that issue, the only way to address SS and Medicare’s insolvency is with enormous tax increases or benefit cuts, or a combination thereof.

Again the FT doesn't do anything to actually effect these changes. . .

The likelihood of me pooping gold is higher.

Unless you are saying that the FT will discover revenue after it is implemented at a "revenue neutral" rate.

That is just one example of how the FT addresses the adverse economic trends which I enumerated above. The fact that you, as well as most Americans, do not understand the relationship does not make it any less valid. This is one reason that we find that the more Americans understand the FT, the more strongly they support it.

There is nothing to understand. Either the FT raises exactly the same amount of money as always and, as such, represents exactly the same drag on the economy as the current system or it doesn't.

The only way for the FT, or any program, to improve the economy is to collect less and yet you are saying that the FT will not only collect more, but it will improve the economy while doing so.

These are specious claims, at best.

[phil_will1]

“And yet nobody on the FT side has yet put forth a credible argument as to why the economy would grow. The only thing that is changing is the method of taxation. The only possible improvement is the reduction (not elimination) of compliance costs.”

That statement is demonstrably false. There are good explanations on FR and other forums for why the FT would increase economic growth. The most important reasons are:
1. The FT eliminates the bias that the current tax system provides in favor of foreign producers over and above our own producers, both in foreign markets and also here at home in our own domestic market.
2. It eliminates several hundred billion $$$ in compliance costs - capital which would be freed up for far more productive pursuits.
3. The FT would facilitate the repatriation of much of the $10+ trillion which is trapped offshore by the current tax system.

There is virtually no debate among economists who have studied the FairTax that it would increase the rate of economic growth in this country. The degree of acceleration may be debatable, but not whether or not any increase will result.

The economic studies performed on the FT indicate that GDP growth of 10+% in the first year or two after passage are likely, with that rate gradually tapering off after that. However, even 10 years after implementation, GDP growth would be a fraction of a percent higher under the FT than under a continuation of the current system. By that time, the US economy would be 1/4 to 1/3 larger than it would have been under a continuation of the current system.

To put that 10+% GDP growth number in perspective, let’s remember that no American alive today has experienced a year in which the US economy grew at double digit rates. 4% is considered strong economic growth - a level we have not achieved since the late 90s. China’s economy is one of the fastest growing in the world and I don’t think they have hit 10% for a full year.

“The only way for the FT, or any program, to improve the economy is to collect less.....”

That’s a ridiculously simplistic view of tax reform and one that you won’t find any support for among respected economists.