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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: Willie Green
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"

I KNOW you are aware of the deduction for necessity spending to the poverty level. Why would you ignore that fact?

41 posted on 03/08/2005 10:08:40 AM PST by alnick (Rice 2005: We've only just begun to see what Freedom can achieve.)
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To: Willie Green
All consumption taxes, including sales taxes, discourage consumption.

Yet we still manage to buy all that Chinese crap at Wally World.

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...

So what? At least with the Fair Tax they will actually pay something. The freeloaders in America have to go. You also fail to mention that said "poor" would be keeping that whole paycheck every week. You think they're just gonna sit on that money?

42 posted on 03/08/2005 10:09:01 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: n-tres-ted

this tax is regressive and you are naive if you think that the government is going to allow ANYBODY to pay less taxes. it opens up a new pocket got the government to pick.

the rich who spend less of their total incomes will pay less, and that amount woulr have to be made up by the lower income groups who spend more of their total incomes. you're squeezing the middle class and placing aa virtual halt on consumer spending.

the "fair tax" is a misnomer and will (not may) doom our economy. The poor end up subsidizing the rich.


43 posted on 03/08/2005 10:10:48 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: elbucko
The Omnibus Budget Reconciliation Act of 1990.

This was on top of all coprorate and earnings taxes. Apples and oranges.

44 posted on 03/08/2005 10:11:35 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: Wolfie
Doesn't have anything to do with how much you buy. Its what percentage of your income you're taxed on.

The NRST has everything to do with how much you buy and nothing to do with your income.
45 posted on 03/08/2005 10:11:46 AM PST by Eagle of Liberty ("Science without religion is lame; religion without science is blind." —Albert Einstein)
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To: n-tres-ted
Add together all the federal and state personal income, payroll, excise and sales taxes, and you quickly reach effective wage tax rates of 50%

How would this change by replacing income and payroll taxes with another sales tax, since the FairTax is revenue neutral?

46 posted on 03/08/2005 10:12:36 AM PST by David75 (I am personally opposed to slavery, but I cannot impose my view on others - 1860 Democrat platform)
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To: Willie Green

It is not disimilar to a 21st Century eco-feudal system where the corporate aristocracy invest and expand their property holdings completely tax-free, while the serfs are overburdened with the excessive taxation on consumption and persuaded that it's supposedly "fair" because the consumption taxes are redistributed through the formal social welfare system.


Ward? Is that you?


47 posted on 03/08/2005 10:13:10 AM PST by Leatherneck_MT (A Patriot must always be willing to defend his Country against his Government)
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To: Kerretarded
Um....everyone is reimbursed on necessity expenses up to the poverty level under the NRST.

Do you really, in your heart-of hearts believe that the government will always send you your refund check? Do you really think that Dems will "reimburse" all or just those they favor?

This is like taking the 2nd Amendment out of the Constitution, on a promise from the Democrats and RINO's that they will put the RKBA into federal law, so the states wouldn't regulate firearms. Would you go along with that?

48 posted on 03/08/2005 10:13:26 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? "

two points: how long do you expect those items you claim are exempt to remain exempt?

secondly, the more you exempt the higher taxes you must impose on non-exempt items.

if you want to destroy the middle class, this is the way to do it.

49 posted on 03/08/2005 10:14:45 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: Kerretarded
"Um....everyone is reimbursed on necessity expenses up to the poverty level under the NRST.

already with the "exemptions/rebates! how long before the politicians errode those "reimbursements" into nothingness?

50 posted on 03/08/2005 10:15:55 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: alnick
I KNOW you are aware of the deduction for necessity spending to the poverty level. Why would you ignore that fact?

Why do YOU ignore that I explained how your "deduction" is distributed as cradle-to-grave "rebates" from the Social Security Administration.

Have to misstate my assertions in order to have something to dispute?

51 posted on 03/08/2005 10:17:01 AM PST by Willie Green (Go Pat Go!!!)
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To: Kerretarded
The NRST has everything to do with how much you buy and nothing to do with your income.

Correct. If you do not wish to pay taxes, buy used. Simple as pie.

You see 'tard, there are folks here that actually enjoy seeing the producers and achievers in America get stuck with the burden. For some reason they believe achievers should be the keepers of others. I do not understand or tolerate this mentality in the least. What's mine is mine, and no one has the right to pilfer my production at the point of a gun. This is why voluntary taxation is absolutely the only morally and logically acceptable means for funding government.

52 posted on 03/08/2005 10:18:01 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: numberonepal

Bump for the NRST NOW!!!


53 posted on 03/08/2005 10:19:14 AM PST by Judith Anne (Thank you St. Jude for favors granted.)
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To: elbucko

You're mixing apples and oranges.

You're referring to a VAT and I'm talking about a NST.

Mfg's would not be responsible for NST, only the retailer who sells the merchandise.

If you eliminate a companies' income tax, you lower their cost of operation...hence more American companies are more competitive with imported goods .


54 posted on 03/08/2005 10:19:56 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: Willie Green

Oh, so you characterize it as cradle to grave, so we should ignore the fact that it's a rebate for taxes paid on necessities to the poverty level.


55 posted on 03/08/2005 10:22:21 AM PST by alnick (Rice 2005: We've only just begun to see what Freedom can achieve.)
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To: numberonepal

See this thread:
http://www.freerepublic.com/focus/f-news/1355031/posts


56 posted on 03/08/2005 10:23:06 AM PST by expatpat
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To: elbucko
Do you really, in your heart-of hearts believe that the government will always send you your refund check? Do you really think that Dems will "reimburse" all or just those they favor?

In my heart of hearts, I do not trust any of them. I also understand that the government needs our tax money to exist. I wish that they would spend less and hopefully we may one day get someone in office who will truly cut spending, not just freeze spending. Until that day comes, I don't care if they tax all of my consumption if I get all of my income.
57 posted on 03/08/2005 10:23:45 AM PST by Eagle of Liberty ("Science without religion is lame; religion without science is blind." —Albert Einstein)
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To: Diamond; Willie Green
All you would have to do to fix the inequity is exempt new homes from the NRST.

I was under the impression that one of the advantages of an NRST would be to eliminate "exemptions".

Cordially,

58 posted on 03/08/2005 10:24:42 AM PST by elbucko (A Feral Republican)
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To: Kerretarded

If you're paying 23% sales tax for a widget, and you earn $30,000 per year, the sales tax is taking a bigger bite out of your income than if you earn $100,000 per year. That's regressive.


59 posted on 03/08/2005 10:24:44 AM PST by Wolfie
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To: Willie Green; 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.

Yep, the shills don't like exemptions one bit.
I've also suggested lowering the tax rate instead of offering rebates. (Rebates are taxpayers money the government shouldn't have taken to begin with.)

The shills don't like that either, since it interferes with their ability to make people dependent on that monthly welfare rebate check.

60 posted on 03/08/2005 10:24:53 AM PST by Willie Green (Go Pat Go!!!)
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