Thursday, January 17, 2008

OT: FairTax supported by noted economists

Eighty prominent economists have signed on to an open letter to the President, Congress and us, urging the support of the FairTax bill. It has a concise set of bullet points that get the gist of it across although you'll have to dig a little deeper if you want the entire picture. The best way to learn about what's involved is to check out the original book. If you read the first book and are still unsure, read the rebuttal and you'll be a supporter for sure ;)

7 comments:

  1. Mr. Huckabee's advocacy of the FairTax is the item of greatest benefit to working Americans and the country's economy.

    The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces. [BHKPT]

    The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan. [THBP]

    Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case. [THBNP]

    The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be. [ALM]

    Consumption benefits [ALM]:

    • Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

    • Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

    • The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.

    • By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.

    Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system. [KR]

    Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively. [JK]

    Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax. [THBPN]

    Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20. [THPDB]

    On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base. [TBJ]

    The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent. [WM]

    ALERT: Kotlikoff refutes Bruce Bartlett's shabby critiques of the FairTax.

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  2. Interesting to see the Huckabee machine in action. I only had this post up for a few minutes before Ian's post came in.

    At first, I thought this message was spam because of all the links. But then I figured out it was just well documented.

    Man, I wish I had a post like this in my back pocket for the "ColdFusion is dead" discussion that comes so often.

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  3. Oh, Mike Mike Mike. Poor Mike Rankin. Would that I had your confidence in government to get something like this done.

    Alas, I fear both you and I will be feeding worms before our government actually legislates meaningful tax reform.

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  4. Marc,
    How did you know I started a bait shop?

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  5. Mike, I used the force and felt a deep disturbance in the universe. Mike Rankin... hopeful about government... something must be wrong. Did the beer joint run out of McEwans again?

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  6. Oh, Mike, am I a bad liberal if I support the fair tax? Is this the first step down a slippery slope toward (gasp, cough, can't breathe) conservativism?

    Please say that this fair tax proposal is really not a republican concept but a green party or libertarian thing or something.

    Please say no way in hell would our current president support such blasphemy. b/c i don't want to be on the same side as this administration on any issue.

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  7. Don't worry Marc, you're not a bad liberal, you're a good American. There is no way in hell GWB would support this program because he is not a good Republican. Instead of being a "tax and spend" liberal, he's a "steal from you kids and spend" neo-con. He has way too loop-holes worked into the current tax system for all of his buddies to consider replacing it.

    As far as I can tell, the ONLY thing that makes the Fair Tax partisan is that it deals with the tax system. I don't really see any social issues, one way or the other tangled up in it. That's what I like about it. It's a way to give power back to the citizenry, improve national productivity and get the government out of your pocket and off your back.

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