Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: rolling_stone
Ok, so just how much money IS spent on tax planning?

The Payne Study often referenced by many FairTax supporters lumps enforcement and avoidance (planning) together and values their total impact at about 1/3 of the value attributed to actual "compliance costs" (filing forms, record keeping and such.) That would suggest, using your study as a base for "compliance cost" for businesses at $91 Billion, that "planning" adds no more than $30 Billion, or so ... and that double counts enforcement (Payne lumps enforcement with planning, Slemrod lumps enforcement with compliance.)

That bring compliance, enforcement, and planning to no more than $121 Billion. Still far short of the FairTax claims.

Do have another source that would help pin down the actual magnitude of "planning costs?"

264 posted on 09/20/2005 2:26:46 PM PDT by Dimples
[ Post Reply | Private Reply | To 260 | View Replies ]


To: Dimples
From Payne's article:
"Tax disincentive costs: the loss of production because of the discouraging effect of taxes on investment and labor. In recent years, a number of economists have made calculations of this "excess burden" for a wide variety of taxes. In a 1985 article in the American Economic Review, Michigan State economist Charles Ballard and his colleagues estimate that for each additional dollar in taxes collected the economy loses 33.2 cents of production."
This is really interesting. The study he quotes, General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States by Charles L. Ballard; John B. Shoven; and John Whalley, lists the marginal excess burden for all taxes at $0.332 per dollar raised. They list the marginal excess burden of "consumer sales taxes" at $0.388 per dollar raised. They show sales taxes as having a 16% higher economic burden than all the current taxes!

I guess that changes the calculations.
285 posted on 09/20/2005 4:56:11 PM PDT by Your Nightmare
[ Post Reply | Private Reply | To 264 | View Replies ]

To: Dimples

I do not know how much is spent on tax planning, but it is a huge industry, just google tax planning, tax attorney or tax accountants....While you are at it, how about answering my previous questions? Oh a one more, what do you suggest?

...Do you believe our current system is fair and simple? Does the power lie with the people or Congress?....


294 posted on 09/20/2005 6:02:41 PM PDT by rolling_stone (Question Authority!)
[ Post Reply | Private Reply | To 264 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson