Dear Always Right,
"I don't see how rents go down."
Yeah, that one's really problematic.
As the landlord likely derives his income partially, mostly, or even completely tax-free, he has little in tax savings directly to reduce the rent. The largest costs he has are typically the cost of the capital (whether he borrowed the money, or paid cash for the property) and the property taxes and insurance.
I know that a lot of NSRTers claim interest rates will plummet, but frankly, that strikes me as being as plausible that we are all about to get a 25% raise. * chuckle *
I'm skeptical that property taxes will decline. Perhaps eventually there will be a small decline in insurance costs.
I can see that there could be modest declines of a few percent. After all, the landlord can do all the maintenance on a pre-NSRT basis, and that saves 23% of a modest part of his costs.
However, I don't see rents not soaring by 20% - 25% after applying the NSRT.
It's interesting to think about the different effects to the economy, and to individual groups of folks within society, depending on where you send things: whether you send the saved taxes back home with the worker; or whether you send the to the consumer.
Many transactions that are currently tax-free or deferred will become sources of screwing someone. My own example is health insurance, especially the part that is employer-paid.
In order to maintain the ability of the employer to reduce prices by reducing payroll costs (and to do that in proportion, one to the other), the employer cannot take the burden of the 30% tax on the health insurance. For folks with high-cost health insurance that is largely or completely employer-paid, this will represent a significant bite.
sitetest
That's the most easily provable NRST claim of all. All you need do to convince yourself of the drop in interest rates is to examine the existing rates of taxable vs. tax-free bonds.