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To: Your Nightmare; phil_will1; Chilldoubt
You're getting ahead of yourself YN.

Your numbers are inconsistent with the conditions under which the NRST of HR25 were set, and your estimate of compliance costs are far too low. Business portion of the compliance burden is a substantially greater portion of the total economic burden than the portion non-profits and individuals. That is why the compliance costs are roughly $800 billion for companies and the remainder of $500 billion split between individuals and non-profit organization.

The rebuttal of your attempt to change data invalidly is going forward here:

==> http://www.freerepublic.com/focus/f-news/1196095/posts?page=233#233

We reset back to the valid data set and conditions under which the NR25 NRST rate was established, pre Bush Tax Cuts.

Any calculations that need to be updated after the new studies under the congressional research staff at the Library of Congress, will be I assure you. But until then one should restrict themselves to the period and conditions which are valid for the bill, 1997-2000. Subsequent period looks to be coming in much lower with 18-20% range on the new NRST rate current economic conditions.

Reset:

I refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.

"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."

Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.

Economists Gary and Aldonna Robbins of the Texas-based Institute for Public Policy examined the case of dry cleaning a shirt, with a particular eye toward uncovering the hidden costs of taxes in price.

The Robbin's attributed over 33.6% of "consumer prices" to be due to federal taxation passed on to the customer.

http://fms.treas.gov/mts/mts0901.pdf

  • Total revenues collected by Feds in '00 = $2,025 billion
    (33.6% of consumer price [per Robbin's 1999 federal tax contribution to prices] )

Those tax components which will not change prices as a consequence of enactment of HR2525

  • Individual Income Tax (Labor) = $1,004.5 billions,
  • Employee half of Social Insurance = 648/2 = 324.0 billions,
  • Excises = $68.9 billion
  • Customs Duties = $19.9 Billion
  • Miscellaneous = $42.7 Billion
    ============================
  • Total constant price factors = $1,460 billion
  • Remainder federal tax components affecting price = (2,025 - 1,460) = $565 billions

Adjust for a conservative $800 billion cost of tax compliance,
    (The Flat Tax; Hall & Rabushka, '95,What the Income Tax Costs the American People: quoting James L. Payne estimates 65cents for each dollar of revenue collected)

  • Total tax related factors affecting consumption price = (800 + 565) = $1365 billions

Estimated change in consumption prices as consequence of enactment of a National Retail Sales Tax, repealing all business income and payroll taxes:

33.6*(1,365/2,025) = 22.64% reduction in consumption prices

Which more than verifies the Jorgenson empirical study of a 22% fall in producer prices

The two sources are in reasonable agreement, Just using static analysis taking the repeal of SS/Medicare taxes as well as income taxes into account for HR25.

I see 20-25% a reasonable value to expect retail prices to fall, not only for customers here in the United States, but in our exports as well making them far more competitive on international markets.

 

Accounting for productivity enhancements and other economic growth factors would add to the potential for decline in consumer prices as can be determined from Jorgenson's studies! But would be beyond the scope of this validation.

410 posted on 08/29/2004 8:24:23 AM PDT by ancient_geezer (Equality, the French disease: Everyone is equal beneath the guillotine.)
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To: ancient_geezer

You continue to post numbers that have been conclusively shown not to be accurate. Why?


411 posted on 08/29/2004 8:43:55 AM PDT by Your Nightmare
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