You were the one who brought up the pay 'em more argument not I thus I made a little fun of it. But Bigun actually bought it and is using it too.
I do not argue that there would be some relief afforded by the reduction of compliance costs but do not see it as having more than a small effect on productivity or efficiency. And there are other productivity lowering aspects you do not mention. For starters the current tax code encourages investment because of the write offs and depreciation deductions these would disappear and I can even envision the change in the code lowering investment and retarding productivity. Economics is filled with examples of counterintuitive results.
Reductions in cost through tax relief can lead to greater profitability without any necessary change in technology or investment plans and could be a one time thing. Reductions in costs due to increased competition can be the result of the forced new technologies caused by increased competition. Your question was difficult to frame and my answer is too. If this is not sufficient try again and I will also.
Everything equal implementation of the FT will increase takehome wages by the no-longer-paid employee share of SS/Medicare which is around 8% however there is going to be a 30% sales tax on purchases. FT advocates maintain that the base price is going to drop so that the final price will be no greater than the REAL price paid prior to FT. I don't believe that will happen in such a smooth and seamless manner. If I am correct the real wage will fall at least initially until the new code is incorporated in the economy. Depending upon how sticky price adjustments are it could be as much as 20% but probably around 10%. I cannot prove this but it seems logical to me. Cost declines due to compliance cost removal will at first show up in increased profits thus this decline will be a one time thing.
And we should not overlook the fact that these compliance costs are declining because of the computerization of accounting and bookkeeping. Personally I don't accept the estimates of the actual cost of compliance in any event and believe them to be overstated.
It is just that "sticker shock" which I fear will wreck the Big Ticket sectors like autos and housing. Adding a visible sales tax of almost 30% will cause demand in those sectors to collapse in my view though I understand you do not agree that will be the result. So even if you are getting a bigger paycheck you stop buying because of that ss. But IF I am correct we are screwed.
Nonsense, Chicago is no home of "inherited wealth" but a blue collar working town like most of the cities. Even NY is not some kind of Palm Beach.
Alan Keyes is not an authority on Economics and his rhetoric may make you feel good but is not an argument.
"And we should not overlook the fact that these compliance costs are declining because of the computerization of accounting and bookkeeping."
Do you have a source for that assertion? Every analysis that I have seen of compliance costs shows them increasing constantly. The reason, of course, is that the growth in our tax system overwhelms the improvements in technology that you cite. In fact, if you look at a graph of the number of pages in the system and study it carefully, you will learn that the rate of growth is not only unsustainable, it is actually accelerating.
"Personally I don't accept the estimates of the actual cost of compliance in any event and believe them to be overstated."
There are a number of estimates of compliance costs out there, with fairly wide ranges. All are huge. Since you don't accept any of them, do I take it that you believe that the compliance costs of the current system are $0?