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The Case for the 'FairTax'
Wall Street Journal Online ^ | March 7, 2005 | Laurence J. Kotlikoff

Posted on 03/08/2005 9:20:44 AM PST by n-tres-ted

Our tax code is a mess for a reason. Special interests pay for special favors. And with 17,000 pages and counting, there's plenty of places for our politicians to hide the kickbacks. Meanwhile, all the exemptions, deductions, exceptions and special provisions reduce the tax base, which means higher tax rates and smaller incentives for individuals and companies to produce income. And whether the tax breaks are set in fine print or spelled out in bold type, they generally favor the rich, making our tax system less progressive than is generally believed.

No tax system is perfect, but ours is so awful that fundamental reform is the only option. Fundamental reform is not just a necessity; it's also an opportunity to stop taxing income and start taxing consumption. My colleagues and I have been studying income and consumption taxation via computer simulations for some time now. We've found that switching from taxing wage and capital income to taxing consumption can significantly improve economic efficiency and growth. What's more, it can make our tax system much more progressive and generationally equitable.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Government; Miscellaneous; News/Current Events
KEYWORDS: fairtax; kotlikoff; taxes; taxreform
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To: Zon
you think it's worse to defend oneself from physical assault than speak an insult to a person.

Still distorting the other guy's statements, are we? You know that's distortion but you still practice dishonesty. How can we believe anything you post?

221 posted on 03/08/2005 12:01:37 PM PST by expatpat
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To: elbucko
Yes, I know and I didn't like it. Why should I work for YOUR tax simplification?

By the I and YOUR, I'm assuming you own a business?

Do you understand that under the NRST, your Federal Corporate/Business Taxes will end? No more, quarterly filings, penalties, or audits. No more withholding for Social Security + employee match, Medicare, etc.

How much time do you spend complying with the IRS regulations now? How much money do you spend on CPAs Accountants etc to comply with that rats nest of a tax code?

222 posted on 03/08/2005 12:01:37 PM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: phil_will1

i didnt' say that, nor would I be dumb enough to imply it because it ain't so. I was saying that if the government gets a vested interest in who's buying what, that they will track it and use that information to their best outcome - not necessarily that of ours.

I am saying that there is a simpler, safer, less risky method that would have a less deleterious effect upon the economy and many of us are ignoring it because they hate the present system so badly.

not that I love the present system, but I think that unless you are planning to make a constitutional ammendment to replace the income tax ammendment, that we are limited as to which directions we may travel and expect an outcome.

if a income tax is codified in the constitution, then it would take nothing less than a constitutional ammendment to overthrow it.

we can work within the constitution to rectify much of what is wrong, and create a system that is both easier and fairer than either the current system or this proposal.


223 posted on 03/08/2005 12:02:12 PM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: Conservative Goddess

Thanks Goddess, I was looking for that.


224 posted on 03/08/2005 12:02:20 PM PST by numberonepal (Don't Even Think About Treading On Me)
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To: camle

You really need to read and learn more about this proposal.


225 posted on 03/08/2005 12:03:05 PM PST by CSM (Currently accepting applications for the position of stay at home mom.)
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To: camle

"...and that ewould be preferrable th thier knowing what you buy and when you buy it...."

There is nothing in the bill that grants the government the right to know what you buy or when. The prebate comes to you so that you ALONE can decide what is a necessity, and what isn't. THERE IS NO TRACKING AND REPORTING SCHEME WITH THE FAIRTAX!!!!


226 posted on 03/08/2005 12:03:10 PM PST by Conservative Goddess (Veritas vos Liberabit, in Vino, Veritas....QED, Vino vos Liberabit)
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To: Conservative Goddess

collecting any tax would require the IRS. if you abolish it, then you would have to recreate it in your image. SOMEBODY has to collect, track, and disburse to the government the funds gathered.


227 posted on 03/08/2005 12:03:40 PM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: Your Nightmare

"I think he's paid to."

Think whatever you like. You certainly like to jump to conclusions, huh, YN?


228 posted on 03/08/2005 12:04:29 PM PST by phil_will1
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To: numberonepal

nice comeback, but i wasn't aware that anybody's life was at stake here. hopefully you aren;'t taking this that seriously.


229 posted on 03/08/2005 12:05:04 PM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: Petronski
I think it humorous that the discussion here is that the new sales tax will be in exclusion to the income tax. Even Greenspan said that there will be both as the elimination of the income tax is "problematic" to use his words.

Those who are shilling for the so-called fairtax is doing the work of the socialists in the name of "fairness", (can anyone here on this thread produce the legal definition of "fairness"). The world socialists have been supporting the idea of a BIG, or a Basic Income Guarantee for some time now and they are convinced that the NRST idea with a personal rebate is just the vehicle to set the social agenda politically. They envision the rebates being legislatively tinkered with to advance the payments for those who are deemed poor and eliminate rebates for those who are deemed rich, in the name of "fairness" and progressivity, of course. With the IRS still in place because the income tax will not be abandoned the government will have all of the personal financial info to carry out such a scenario.

The government will never abandon the income tax because the liberals won't let it happen because how else would one tax an American living on foreign soil, or tax old wealth (death taxes) or tax so-called unearned income, or tax windfalls like a signing bonus or the like?

The problem here is we will have both a sales and income tax if the "fairness" folks have their way and we will all suffer for their zealotry.
230 posted on 03/08/2005 12:05:50 PM PST by Final Authority
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To: camle

"i'm sorry but in no way do i beleive that should the government stop taxing businesses that that tax savings would result in lower prices. the very idea that a corporation won't try to skim as much of that as they can get away with boggles the mind."

If you don't believe they will lower their prices, then you must be willing to start a business competing with them in the market place. It would be a gold mine.


231 posted on 03/08/2005 12:05:58 PM PST by CSM (Currently accepting applications for the position of stay at home mom.)
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To: ancient_geezer
..but they will also receive 100% of their gross paycheck.And prices will go down! If any of you believe that, I have a bridge.....
232 posted on 03/08/2005 12:06:06 PM PST by expatpat
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To: camle; Kerretarded

count all income as income. tax everybody at the same rate. simple and really fair. more like Steve Forbe's flat tax.

Little problem with Steve Forbes et.al.'s flat tax. The rules for separating income that is taxable from return of capital that is not, keeps the complexity just where it is now, the requirement for audits by an IRS remain and all the controvercies that arise over what is taxable and what is not, with verification of what is claimed as taxable for both individual and business, regardless of one's income level claimed for under the Flat tax. It isn't the size of the final report card not the number of tax brackets that make the complexity and nastiness of the the current tax system, is the details that don't go away by just calling something a flat tax.

Tax preparers and consultants are still slobbering over the potentials of the "Flat Tax" that does nothing to reduce Congresses favorite section of the tax code that provides the basis of there perpetual "contributions" from interested parties.

Mash yer clicker here for verse & chapter on that one:

Flat Tax as Seen by a Tax Preparer
by Vern Hoven

233 posted on 03/08/2005 12:06:11 PM PST by ancient_geezer (Don't reform it, Replace it!!)
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To: expatpat

Still distorting the other guy's statements, are we? You know that's distortion but you still practice dishonesty. How can we believe anything you post?

It is not a distortion and I'll post your own words to prove it. I note that you write "still" to imply that I have distorted before. That's akin to a person asking you if you still beat your wife. Your attempts at deception are so transparent.

I note that you admit that yours was an insult. And your response when you thought -- despite the thought being in error -- a person has lowered themselves to sling an insult you respond by slinging an insult.723


expatpat: That's me. Odd behavior for a man, huh. I'll confess to worse: if someones slings a punch at me, I'm apt to respond with a punch. 734


234 posted on 03/08/2005 12:06:43 PM PST by Zon (Honesty outlives the lie, spin and deception -- It always has -- It always will.)
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To: CSM

It's no worse than a progressive tax policy, IMHO. Of course, that depends on what end of the stick you're on. My point is why futz with all of this stuff, and not support a Flat Tax on income instead?


235 posted on 03/08/2005 12:06:50 PM PST by Wolfie
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To: camle
collecting any tax would require the IRS.

Good Lawd, nobody said there woudn't be someone to collect the taxes. The point here is that there will be no one to collect taxes from individuals! There will no longer be anyone to "come an git you" if you don't pay. How in the world can this be a bad thing?

236 posted on 03/08/2005 12:07:13 PM PST by numberonepal (Don't Even Think About Treading On Me)
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To: numberonepal
"You have no conception of a free market. "

try me. when a company's board is charged with maximizing profits (to be paid as dividends, for example) and they fail to do so, they can (and often are) sucessfully sued. There is nothing around that I have heard of that obligates a company to pass along any windlfall that it takes in. if they suddenly find their profit margin up by 20-30% they wold be financially misfeasant to give that money away unless to do so is the only way to retain market share.

237 posted on 03/08/2005 12:08:01 PM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: CSM
"You really need to read and learn more about this proposal. "

Hillary said the same about her health care propposal.

238 posted on 03/08/2005 12:09:08 PM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: Valpal1

It's both the tax code and spending, not just spending. If you have a way to cut spending effectively, have at it and I'll most likely want to help (unless it means cutting defense in the wrong places). But the tax code itself puts lots of folks and our businesses a great disadvantages that the Fair Tax would eliminate.


239 posted on 03/08/2005 12:09:45 PM PST by n-tres-ted (Remember November!)
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To: camle

The Founders never intended income to provide a basis for taxation. They believed in taxing consumption.

The FairTax seeks to tax NOT what you contribute to society in the form of work, but what you take from it in the form of consumption. It rewards the frugal contributor and punishes the slothful spendthrift. It fundamentally changes the incentives between work and leisure and spending vs saving.

The point Alan Greenspan was trying to make in his comments before the Tax Reform Panel is that as a nation, we spend too much, save too little; and because work is punished with a tax bill...we work too little. The Fair Tax removes all dis-incentives to work, save and invest for the future.....and that will help us to generate REAL economic growth.


240 posted on 03/08/2005 12:10:11 PM PST by Conservative Goddess (Veritas vos Liberabit, in Vino, Veritas....QED, Vino vos Liberabit)
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