The Case for the 'FairTax'

Wall Street Journal Online ^ | March 7, 2005 | Laurence J. Kotlikoff

[Eagle of Liberty]

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

If you look at post #59, wouldn't your solution still fall into Wolfie's example of a regressive tax?

[camle]

"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.

Boo frickin' hoo."

if this is the attitude of nsrt-ers towards the basic regressive nature of their proposal, then how can anybody beleive your objectivity?

[CSM]

I am stunned to see you stand up against a tax plan that would remove the embedded taxes from American products, making US manufactured products more competitive globally, and add taxes to imported goods at the point of sale, making american products more competitive at home.

Why would you take such a stance when offered the opportunity to accomplish much of what you have been hoping for?

[camle]

and an huge sales tax is fair? how?

[numberonepal]

count all income as income. tax everybody at the same rate. simple and really fair.

And some government employee somehow gets to demand knowledge of my earnings. By what right?

[Principled]

...seems to me the politicos are just looking for a way to tax the savings of the boomers an second time.

Savings are already being taxed again when spent. That so many don't realize this is a tribute to the effectiveness of the efforts to keep the true cost of government hidden.

We must change the method of tax collection - the income tax and withholding hide the amount we all really pay to feed the gov't beast.

[camle]

how is it regressive when all income is taxed at the same rate?

[Petronski]

Why wouldn't the "fair tax" will suppress new home construction (since it creates an incentive to purchase existing homes)?

[numberonepal]

Does anyone else beside me see the irony in this?

I was gonna just ignore it. But like I said before, you're man man.

[numberonepal]

man man = mean man

[camle]

govermnent employees already know how ,uch you make - don't kid yourself. and that ewould be preferrable th thier knowing what you buy and when you buy it.

[CSM]

I don't think the NRST is regressive. If I can't earn enough to buy a new car+tax, then I can buy a used car with no tax.

Each person will have the ability to make this choice.

[Principled]

Regressive means that they must spend a larger proportion of their resources simply to acquire necessities:

Very good. (Even a stopped clock is right twice a day!). Now if you'd just remember that the nrst that's in Congress now provides for tax free spending up to the poverty level, you'd know that this nrst is not regressive.

Geez, can ya post that thingy again???

[Diamond]

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

Exemptions under the current Income Tax structure.

Cordially,

[camle]

you really think that there won't be any tax on used cars?????

please. governments don't create such loopholes.

besides, aren't you really saying that only the rich should be able to buy new cars, anfd that the rest of us are opnly good enough for their cast-offs?

[Principled]

WG: Tenants pay NRST
alnick:Based on what? I don't think rental property would be taxable under NSRT.

Rent payments are taxed under the nrst, just as rent payments today include tax. That so many folks don't realize that today's rent includes an increase of 25% or so to pay for tax costs tells just how effective this tax code of ours is at hiding the true cost of govenrment.

[numberonepal]

if this is the attitude of nsrt-ers towards the basic regressive nature of their proposal, then how can anybody beleive your objectivity?

Those that tout the special priviledge of the "poor" are objective? Hardly. What's objective is to treat each and every person as an individual no matter their production or achievement. My point is that who cares if the poor pay more than they do now. I sure as hell don't. If you want to bark up the objectivity tree, you picked the right person.

[Diamond]

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.)

I'll agree with you there. That 23% really bugs me. If the government has to take that much money to stay "revenue neutral" it is spending way too much money. Heck, I'll bet the ancient Israelites didn't even pay that much when they were slaves in Egypt.

Cordially,

[EternalVigilance]

and an huge sales tax is fair? how?

First, if it is 'huge', that is a comment on the level of government spending, not a commentary on the relative value of the FairTax.

Secondly, the 'FairTax' is fair because it treats every American exactly the same.

It is also simple, visible, efficient and noninvasive.

Sounds fair to me. That's why I support it wholeheartedly.

[Principled]

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.

Of course it was a problem. The luxury tax was an additional tax. The nrst replaces existing taxes. The luxury tax was levied only on certain items - the nrst applies to all.

The nrst and the luxury tax are as different as night and day.

The luxury tax increased the cost of goods. The nrst doesn't.