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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: camle
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?
81 posted on 03/08/2005 10:38:08 AM PST by Eagle of Liberty ("Science without religion is lame; religion without science is blind." —Albert Einstein)
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To: numberonepal

"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?


82 posted on 03/08/2005 10:38:36 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: Willie Green

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?


83 posted on 03/08/2005 10:39:01 AM PST by CSM (Currently accepting applications for the position of stay at home mom.)
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To: EternalVigilance

and an huge sales tax is fair? how?


84 posted on 03/08/2005 10:39:37 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: camle
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?

85 posted on 03/08/2005 10:39:42 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: beekay
...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.

86 posted on 03/08/2005 10:40:03 AM PST by Principled
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To: Kerretarded

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


87 posted on 03/08/2005 10:40:23 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: n-tres-ted

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


88 posted on 03/08/2005 10:40:41 AM PST by Petronski (This is the Serengeti, heart of the Dark Continent, where Bar Codes roam free...)
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To: phil_will1
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.

89 posted on 03/08/2005 10:41:30 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: numberonepal

man man = mean man


90 posted on 03/08/2005 10:41:55 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: numberonepal

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.


91 posted on 03/08/2005 10:42:07 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: camle

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.


92 posted on 03/08/2005 10:42:36 AM PST by CSM (Currently accepting applications for the position of stay at home mom.)
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To: Willie Green; ancient_geezer
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???

93 posted on 03/08/2005 10:42:37 AM PST by Principled
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To: elbucko
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,

94 posted on 03/08/2005 10:43:14 AM PST by Diamond
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To: CSM

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?


95 posted on 03/08/2005 10:44:36 AM PST by camle (keep your mind open and somebody will fill it with something for you))
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To: alnick; Willie Green
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.

96 posted on 03/08/2005 10:45:39 AM PST by Principled
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To: camle
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.

97 posted on 03/08/2005 10:45:59 AM PST by numberonepal (Don't Even Think About Treading On Me)
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To: Willie Green
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,

98 posted on 03/08/2005 10:46:56 AM PST by Diamond
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To: camle
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.

99 posted on 03/08/2005 10:47:32 AM PST by EternalVigilance (Freedom. Brought to you by the grace of God and the Red, White and Blue...)
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To: elbucko
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.

100 posted on 03/08/2005 10:48:37 AM PST by Principled
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