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To: pigdog

Price effects of the FT are exactly what is being addressed. Those arguing for FT do not grasp the issue of how prices are determined in a market system thus the argument that removing income taxes will lower prices is flawed theoretically. Most of economics boils down to prices.

If you want to argue that prices will go down you must deal with the economic theory which says they won't. (At least from the income tax removal.) I agree as regards payroll taxes at some point but they are in the price equations.

Not only are these issues NOT "off topic" but they constitute the most important aspects of the topic.


1,095 posted on 05/24/2005 7:05:17 AM PDT by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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To: justshutupandtakeit; pigdog; ancient_geezer

With respect to prices.....I direct your attention to section 902(a)(3) TRANSITIONAL INVENTORY CREDIT- The trade or business which held the qualified inventory on the close of business on December 31, 2006, shall be entitled to a transitional inventory credit equal to the cost of the qualified inventory (determined in accordance with paragraph (2)) times the rate of tax imposed by section 101.

On day ONE when the FairTax is enacted.....businesses with qualified inventory (Finished goods and WIP) will get a credit against the tax equal to 23%. No need to let the change in tax law work through the supply chain...it's a done deal on day one.

That will effectively remove all embedded tax cost from the inventory on hand on day one....and all prices to fall without sacrificing profit margin. Competition will certainly reset the intersection of the supply and demand curves....where the price is determined.


1,096 posted on 05/24/2005 7:20:14 AM PDT by Conservative Goddess (Politiae legibus, non leges politiis, adaptandae)
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To: justshutupandtakeit

I assume that your use of the abbreviation "FT" means FairTax and not Flat Tax. In any event my comments were to the poster (not you) who was offering up notions of "profit maximization", "demand curves", etc. (among other ideas).

Despite your claim and pretense of economic snobbery, most of the FairTax backers grasp the issues quite well, thank you.

Your representations merely illustrate why economics is called "the dismal science". There are many economic theories that may be cited to illustrate almost any point one chooses (the meaning of the "dismal science" phrase since it is not a science at all, but merely - given the trappings of such by those such as yourself who wrap themselves in calculational economics - has the appearance of a science but is merely a manner of expression).

And one does not deed to "deal with" economic theory at all to realize the deleterious effects of the income tax and the fact that a good bit of this is passed forward to consumers. To argue otherwise as you do is nonsense no matter how many "economists" you may cite. Most people are not foolish enough to sign on to such a representation.

With respect to economics and economists (or even "economists" such as yourself), there is this to illustrate their Alice-In-Wonderland approach to things

THE DISMAL SCIENCE:

"A slang term used to describe the discipline of economics. It was given this description by Thomas Carlyle, who was inspired to coin the phrase by T. R. Malthus's gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship.

While this story is well known, it has been debated and deemed to be inaccurate by some. Those doubting the story say that Carlyle was reacting not to Malthus but economists such as John Stuart Mill, who argued that institutions, not race, explained why some nations were rich and others poor. Carlyle attacked Mill, not for supporting Malthus's predictions about the dire consequences of population growth, but for supporting the emancipation of slaves. It was the discipline's assumption that people are basically all the same and thus entitled to liberty that led Carlyle to label the study of economics "the dismal science". The connection was so well known throughout the 19th century, that even cartoonists would refer to it knowing that their audience would understand the reference."

So, you see, economists never agree on anything (not even to the meaning/origin of the term for which their discipline (discipline, not science) is known: To pretend that you (or your sidekick with the Nightmare VAT) have all the answers to all economic concerns is ludicrous as is the repeated promotion of off-topic points.


1,106 posted on 05/24/2005 8:14:45 AM PDT by pigdog
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