The Fair Tax: A real attempt at Economic Reform

[Zippyjuan]

You are right- the 25% is over three years, not just one- but still in my opinion way too optomistic an assumption.

 

[bbartlog]

In a perfect world where politicians weren't likely to just add this to all the other taxes we already have, I might possibly be sold on this idea (though frankly I still prefer a progressive income tax to a basically regressive sales tax). Given our current government, there is no way I would support your proposal.

 

[enoch150]

You are right- the 25% is over three years, not just one- but still in my opinion way too optomistic an assumption.

Not even over 3 years. A 1% rise in GDP does not equal a 1% rise in tax revenue.

The Federal Reserve says GDP in October 2007 was $13.326 Trillion. In October 2010 it list it as $13.216 Trillion. That's a decline of less than 1% GDP over 3 years.
But tax receipts in 2007 were $2.568 Trillion, while in 2010 tax receipts were $2.163 Trillion - a decline of 15.8% even while tax changes were slight.

Paul's plan doesn't need a 25% rise in GDP. He just needs a reduction in unemployment to 2007 levels and a reasonable increase in GDP.

 

[Zippyjuan]

US GDP for 2010 was $14.5 trillion. http://www.google.com/publicdata/ex...mktp_cd&idim=country:USA&dl=en&hl=en&q=us+gdp

According to the summary tables from his Plan to Restore America he indicates that in 2013 it will be $16.2 trillion and by 2016 (the last year of his budget proposal) it will be $19.7 trillion. Taken from the PDF link http://c3244172.r72.cf0.rackcdn.com/wp-content/uploads/2011/10/RestoreAmericaPlan.pdf on page #4. From 2013 through 2016 that is 22% higher and compared to 2010 (which is actually six years) it is 36% higher. A reminder that in 2010 it only grew one percent.

 

[Roy L]

What is the FairTax plan?

Thanks for posting this. It very convincingly explains why the "economists" who endorsed the "Fair"Tax should be drummed out of the profession for incompetence.

 

[heavenlyboy34]

Thanks for posting this. It very convincingly explains why the "economists" who endorsed the "Fair"Tax should be drummed out of the profession for incompetence.

This, I agree with you on.

 

[sharkcity]

It won't pass until a policy change in DC takes place

like FREEDOM..The constitution says gov will be funded with excise taxes so Fair Tax is not illegal like the income tax. Also in a so called free country it's none of the govs damn business how much we make or have. Further more compliance cost with income tax is pushing half a trillion a year -way more stupid and wasteful than ethanol from corn. 23% is way too high -15% would be more than enough

 

[heavenlyboy34]

like FREEDOM..The constitution says gov will be funded with excise taxes so Fair Tax is not illegal like the income tax. Also in a so called free country it's none of the govs damn business how much we make or have. Further more compliance cost with income tax is pushing half a trillion a year -way more stupid and wasteful than ethanol from corn. 23% is way too high -15% would be more than enough

+1 Income tax is one of the regime's favorite divide and conquer tools. Very good for stirring up class warfare and distracting from real issues.

 

[HarryBrowneLives]

Rearranging the deck chairs on the Titantic ... This is the kind of thing that is a peave of mine ... it is the type of thinking (or non) that comes from SOME of the populist/tea party types out there ... who, when polled, support the concept of limited government but don't want to cut any benifits or the military -completely irrational ... who think "if only we had a buisnessman to run big government better he could manage it and cut costs and still keep things going" ... which people have been saying for the last 50 years at least and the problems have grown unabated. We're at an empass where tinkering will no longer work. Government is growing exponetially and we haven't even seen the brunt of the baby boom generation with entitlements.

THE TAX ... Fair or not ... IS SPENDING!


In my opinion, the most important question in politics was asked by the late Harry Browne:

"Would you be willing to give up your favorite federal program if we could end the Income Tax forever?"

 

[Zippyjuan]

like FREEDOM..The constitution says gov will be funded with excise taxes so Fair Tax is not illegal like the income tax. Also in a so called free country it's none of the govs damn business how much we make or have. Further more compliance cost with income tax is pushing half a trillion a year -way more stupid and wasteful than ethanol from corn. 23% is way too high -15% would be more than enough

Excise taxes are not the same as the "Fair tax" which is a sales tax. Excises are taxes on imports. If you wanted to balance our current budget with an excise tax on everything we import that would be about 200% which would triple the price on everything we import- including oil (say oil was $100 a barrel adding the $200 tax equals $300 a barrel). It may at first seem like we are avoiding paying for taxes if they are applied on imports but we won't be avoiding them- they will be hidden in the price of everything- which is also true of the "Fair Tax"- the "Fair Tax" is just more obvious.

A 15% "Fair Tax" would raise enough revenue to about cover only the "mandatory spending" portion of the current budget. No money for defense or anything else.
Figures for 2010: http://en.wikipedia.org/wiki/2010_United_States_federal_budget

Mandatory spending: $2.173 trillion (+14.9%)

$695 billion (+4.9%) – Social Security
$571 billion (+58.6%) – Unemployment/Welfare/Other mandatory spending
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt

 

[Elwar]

Which government agency gets to determine "poverty level" and how are they controlled to prevent the "poverty level" from being set at $80,000?

Thus giving "wealth distribution checks" to every American.