Lando 
Posted on 04/18/2005 9:30:29 AM PDT by witchypooy
IT'S YOUR PAYCHECK - KEEP IT ALL FAIRTAX CALCULATOR HR25/S25
Now that April 15 is past, it's time to tally up the tax score. Go to the FairTax calculator, http://www.pafairtax.org/calc.php and using 2004 figures, figure out (anonymously) what you would have spent in 2004 in taxes if we had the FairTax, the simple, honest, and progressive national retail sales tax, instead of our current complex income tax/FICA tax system.
TOTAL INCOME TAX + TOTAL FICA = TOTAL FAIRTAX : For your household, please remember to make an honest and accurate comparison. FairTax will fund social security and medicare with 1/3 of all sales taxes collected, thus eliminating FICA withholding from your pay also. Therefore, to be an honest comparison, you MUST take your total 2004 income tax paid PLUS your total FICA withholding for the year for social security and medicare, and add them together. This becomes the accurate figure for current income/fica you would compare to the projected FairTax shown on the calculator. You can get the total FICA withheld for the year off your last pay stub, or just figure 7.65% of your yearly gross wages. If you are self-employed you will figure 15.3% for FICA.
We are only dealing with the 7.65% FICA you pay yourself here. Remember, your employer also pays 7.65% for you under today's system. In Business bookkeeping terms, this is actually YOUR money that your employer must spend for your benefit, and really should also be added to your overall Income Tax/FICA costs today. Under FairTax your employer will NOT be paying FICA on your behalf. This business expense is eliminated. This FairTax advantage means more money for businesses to use to either lower prices, or raise wages.
The rebate of taxes paid up to the poverty level of spending for your household, that will be provided to ALL Americans under FairTax, is calculated and shown in the FairTax calculator formula. The HHS poverty lever table is also there, for all situations. This rebate essentially gives every American tax free spending on the necessities of life.
noirs@pafairtax.org
I didn't get it from them. But I'm sure they have it since they paid so much money for it. You're so chummy with them, ask them.
Ahhh I see, not published and AFT is holding onto it to hide it from everyone, but Your Nightmare is able to somehow ferret it out when no one else can. ROTFLMAO.
Poorer and middle income people spend nearly 100% of their income every year, while richer people don't. Furthermore items I consume overseas are taxfree, like that $5 million house that I bought in Bora Bora.
Ahhh a rate set on expectations of spending rather than revenue neutral conditions, for reforms expected to replace current law and revenue receipts only.That's because a significant portion of the "revenue" the FairTax generates isn't just "revenue," it's an expenditure also. It's just the federal government giving themselves money. Your buddies at the AFT counted the revenue but seemed to forget to increase expenditures to allow for paying the sales tax. That is Enron accounting.
LOL, now that is funny. Where do I find these workers? I find once workers take home enough money to pay their bills they tend to stop working. These models have some wacky assumptions about human behavior.
There is no Enron style accounting going on here. The slow real wage growth is a function of the increased labor supply.
Of note here, is the fact that the paper actually shows a real wage increase under conditions of higher supply of labor.
That indicates to me that there must of necessity be a growth in jobs in manufacturing and business creating sufficient demand for labor to maintain a growing real wage as folks are looking for more work to support there new found ability to invest and save tax free and still maintain consumption at pre-NRST levels and higher.
I can see how the Fair Tax stimulating the economy that way can generate not only real economic growth, but at the same time constrain total price paid for goods an services such that everyones standard of living can grow the 15% indicated in Kotlikoff's Ways & Means Committee testimony without inflationary price increases, in fact pricing would pretty much have to constain itself to accommodate the expected increase in savings and investment with money supply growth remaining constant in per-capita terms and productivity growth.
A smaller rise, not a decline.
A smaller rise, not a decline.
Wow, the house building business must be good!
The more I think about that, the more I think it is a great idea to raise revenue. Why don't we charge the govrenment a 100% on all the taxes they currently collect. We can double tax revenues overnight, and no one will have to pay a dime more.
Which would be offset by a reduction in payroll taxes.
That's because they are under current tax law.
I just re-read/skimmed the paper and I don't find any such footnote or discussion in the body of the paper.
Seems as though we could be reading two different papers. Where did you get your copy? Can you provide a link? I looked at the NBER website....didn't find it there...is it archived somewhere?
Lando
I just re-read/skimmed the paper and I don't find any such footnote or discussion in the body of the paper.Sorry. The paper's being referenced here are switching to often. This is the one (from 1993) I was referring to. I understand now you were referring to the 1996 paper.
Seems as though we could be reading two different papers. Where did you get your copy? Can you provide a link? I looked at the NBER website....didn't find it there...is it archived somewhere?
Poorer and middle income people spend nearly 100% of their income every year, while richer people don't.
Of course you are overlooking the fact that FCA rebate of the NRST to povertyline expenditure amounts to a much higher percentage of their expenditure than that richer people.
The consequence due to the tax rebate is that the lowest quintile of the income ladder are fully compensated for the taxes they pay on their expenditures, while the richest are only partially compensated as a much lower percentage of their income. In short, the NRST with rebate retains much the same progressivity as the current tax system as Kotlikoff and several other economist point out.
I'm sure the Kotlikoff paper YN is referencing has a bit to say on progessivity of the NRST, could you look that up in your copy of the Kotlikoff study Conservative Goddess and see what he Kotlikoff has to say?
Kotlikoff's '96 study for AFT is a distributional study afterall so progressivity should be tested in it. Does he say anything specific concerning it?
Maybe the people who funded the paper did not like the footnote, so it was left out in the update.
Well, actually, it's just a statement of the obvious.....the current code creates a work 'dis-incentive' by punishing productivity and earning with a tax bill. Under a progressive tax system, the effect is exacerbated at the upper margin of the rate brackets. One of the things economics teaches you is to think about the person on the margin and not to view the situation as someone buried deep within the bell curve.
IN laymans terms, If the next hour of work effectively returns less to my pocket than the last, I'm going fishing. Whereas in reality you and I might be inclined to work until we drop, not everyone thinks like that. There are undoubtedly people that simply work long enough to get by and value leisure over work.
The model Koltlikoff developed stratified the population into "ability levels" but there was not enough in the paper to determine what assumptions were made about propensities to prefer work over leisure at the various levels.
I saw something that lead me to believe you are a contractor? My Dad was a contractor. I can sympathize with the mindset with which you must deal, but I don't think it is representative of the whole.
It's not. In fact, the Associated General Contractors of America has endorsed the Fair Tax plan. http://www.fairtaxvolunteer.org/materials/factsheet.html
Thanks for the clarification. The 1996 paper includes the following on the model:
"The model used in this study is a modified version of the Auerbach and Kotlikoff (1987) general-equilibrium OLG simulation mode, henceforth referred to as the AK Model. the new model was developed by a team of five economists in academia and the government." There are some more specifics with respect to the model, but the paper is silent with respect to global capital flows.
You taught this group I never heard of that has nothing to do with homebuilders as important. Does NHBA support this? Haven't seen anything. Even AGA doesn't bother to mention the NRST or any Fair Tax on their web page, eventhough they have quite a few issues mentioned. Obviously is not high on their priority list if in fact they actually endorsed it. Not really impressive.
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