Since everyone will continue to consume, your strawman is rather poor isn't it.What strawman. Jorgenson's model shows consumption dropping a large amount.
What strawman. Jorgenson's model shows consumption dropping a large amount.
Hmmm, 5.6% decline in consumption first year do to initial increased investment incentives, then consumption overtakes the income tax case by second year ultimately rise to a 5.5% rise over the income tax Base Case, While GDP rises 13.2% first year and Investment rises 78% over income tax investment rates then returning to more normal levels 16% above the income tax Base Case.
Unlike the Flat Tax/VAT case which depresses investment and does little for GDP and or future growth in consumption or anything else for that matter.
"What strawman. Jorgenson's model shows consumption dropping a large amount."
Incorrect. Jorgenson's study shows consumption dropping by about 9% in year 1, a lesser amount in year 2 and by about the 4th year consumption would have caught up to where it would have been under the current system. From that point forward, consumption is greater under the FairTax because of the greatly expanding economy.
Even in year 1, the net drop in consumption is comprised of a large decrease in consumption of exports partially offset by an increase in the consumption of US produced goods. GDP growth during that first year is an eye-popping 10.5%.