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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: kellynla; n-tres-ted; Willie Green
Eliminating the federal income tax and replace it with a national sales tax.......

Will result in the deepest economic depression that this country has ever seen. An NST will make the 1930's seem like the .com '90's.

21 posted on 03/08/2005 9:50:54 AM PST by elbucko (A Feral Republican)
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To: Fan_Of_Ingraham

WSJ is a subscription paper. You have to pay for it.


22 posted on 03/08/2005 9:51:56 AM PST by Melpomene
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To: Kerretarded
Interested in how you came to that conclusion. Please explain.

It's a straightforward examination of how their oversimplified, snake-oil panacea actually works.

All consumption taxes, including sales taxes, discourage consumption.
And the burden of taxation will fall most heavily on those on the lower rungs of the economic ladder because they must devote a larger proportion of their earnings to purchasing "necessities" (food, clothing, shelter, medicines). The so-called "fair tax" falsely promises to remedy this inherent burden by entrapping them in cradle-to-grave "tax rebates" from the Social Security Administration.

23 posted on 03/08/2005 9:52:44 AM PST by Willie Green (Go Pat Go!!!)
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To: n-tres-ted
Fundamental tax reform is long overdue. Consumption taxation is the way to go. The FairTax is a reform every Democrat who cares about equity should love. And it's a reform every Republican who cares about efficiency, transparency and growth should champion.

This bears repeating at EVERY opportunity!

24 posted on 03/08/2005 9:55:18 AM PST by Bigun
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To: Willie Green
The NRST would discourage individual "consumption" of real property.

Well, at least real property consisting of new homes. All you would have to do to fix the inequity is exempt new homes from the NRST.

Cordially,

25 posted on 03/08/2005 9:57:01 AM PST by Diamond
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To: Willie Green
Now, now. You and I have gone over this at length. That wasn't a personal attack. I was a philosophical attack. For those interested see this thread to see where this same argument started.
26 posted on 03/08/2005 9:57:10 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: Willie Green

The NRST is an inherently regressive form of taxation that is truly despotic.



Unless you are using a Democrat dictionary, "regressive" means that poor pay more than the rich. I don't know many poor folks who buy more stuff than rich folks.


27 posted on 03/08/2005 9:57:20 AM PST by Atlas Sneezed (Your Friendly Freeper Patent Attorney)
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To: elbucko

says who? you? LOL
gotta come up with some better documentation than your word!


28 posted on 03/08/2005 9:57:53 AM PST by kellynla (U.S.M.C. 1st Battalion,5th Marine Regiment, 1st Marine Div. Viet Nam 69&70 Semper Fi)
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To: numberonepal

I should read "It".


29 posted on 03/08/2005 9:59:40 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: Willie Green
...the burden of taxation will fall most heavily on those on the lower rungs of the economic ladder because they must devote a larger proportion of their earnings to purchasing "necessities" (food, clothing, shelter, medicines).

Ok. Exempt foods, medicines and clothing, too. Is there still a problem?

Cordially,

30 posted on 03/08/2005 9:59:53 AM PST by Diamond
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To: elbucko
Will result in the deepest economic depression that this country has ever seen. An NST will make the 1930's seem like the .com '90's.

You're joking, right?

31 posted on 03/08/2005 10:00:46 AM PST by groanup (http://www.fairtax.org)
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To: n-tres-ted

seems to me the politicos are just looking for a way to tax the savings of the boomers an second time. the paid tax when they earned the savings and now they will pay a tax when they spend it. sounds like double taxation.


32 posted on 03/08/2005 10:01:30 AM PST by beekay
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To: kellynla

Bump for the NRST NOW!!!!


33 posted on 03/08/2005 10:01:48 AM PST by Judith Anne (Thank you St. Jude for favors granted.)
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To: Beelzebubba
Unless you are using a Democrat dictionary, "regressive" means that poor pay more than the rich. I don't know many poor folks who buy more stuff than rich folks.

Regressive means that they must spend a larger proportion of their resources simply to acquire necessities: food, clothing, shelter, medicines. Therefor, placing a tax on these items is much more burdensome to lower incomes citizens than it is to those who are more affluent and have greater discretion and choice over the utilization of their resources.

34 posted on 03/08/2005 10:03:03 AM PST by Willie Green (Go Pat Go!!!)
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To: Willie Green

Fair Tax = Oxy Moron


35 posted on 03/08/2005 10:03:26 AM PST by OB1kNOb (mrducks. mrnot . osmr, cmwangs? lib! mrducks!)
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To: Willie Green
the burden of taxation will fall most heavily on those on the lower rungs of the economic ladder because they must devote a larger proportion of their earnings to purchasing "necessities" (food, clothing, shelter, medicines).

Um....everyone is reimbursed on necessity expenses up to the poverty level under the NRST.
36 posted on 03/08/2005 10:03:59 AM PST by Eagle of Liberty ("Science without religion is lame; religion without science is blind." —Albert Einstein)
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To: Willie Green
Tenants pay NRST

Based on what? I don't think rental property would be taxable under NSRT.

37 posted on 03/08/2005 10:04:23 AM PST by alnick (Rice 2005: We've only just begun to see what Freedom can achieve.)
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To: n-tres-ted; Willie Green; kellynla
Is a sales tax the best way to tax consumption? Notwithstanding some enforcement concerns, my answer is yes.

Oh really? Analyze this:

"The Omnibus Budget Reconciliation Act of 1990. Controversy arises from ambiguities in the determination of tax liabilities for the automobile, boat, aircraft, jewelry, and fur industries."

Portions of, and finally all of this "consumption tax, had to be repealed because it was a job killer. Companies that made boats and private aircraft had to lay off skilled craftsmen. Whole companies had to declare bankruptcy. If you people think that the NST is the road to tax payer nirvana, you need a new Guru.

38 posted on 03/08/2005 10:05:38 AM PST by elbucko (A Feral Republican)
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To: Diamond
Ok. Exempt foods, medicines and clothing, too. Is there still a problem?

The only problem is that the NRST shills will flame you because they can't raise enough revenue without taxing those items.

39 posted on 03/08/2005 10:05:45 AM PST by Willie Green (Go Pat Go!!!)
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To: Beelzebubba

Doesn't have anything to do with how much you buy. Its what percentage of your income you're taxed on.


40 posted on 03/08/2005 10:07:56 AM PST by Wolfie
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