Comments on: About That Whole “FairTax” Thing

By: Legislative Report » If you take a walk I'll tax your feet...

Legislative Report » If you take a walk I'll tax your feet... — Fri, 17 Aug 2007 15:11:56 +0000

[...] response to a post at V-squared: …if you’re imposing a steep tax on consumption, isn’t it natural to expect that consumption will go down? And if consumption goes [...]

By: Volunteer Voters » Who Would Pay More Under The Fair Tax?

Volunteer Voters » Who Would Pay More Under The Fair Tax? — Fri, 17 Aug 2007 12:17:08 +0000

[...] Criticism mounts for the Fair Tax, a national sales tax proposal which is the darling of conservatives and, most curiously, economic populist Huckabee: Bookman plugged a variety of different income figures into the “FairTax calculator” at the organization’s website. Among other things, he found that the George and Laura Bush family would save ten times as much money under FairTax as would the middle-class Bookman himself. What he didn’t find was anybody who would pay more. But surely someone has to pay more? [...]

By: Warner Todd Huston

Warner Todd Huston — Fri, 17 Aug 2007 10:34:28 +0000

Paul, no problem.

I have to say, I agree with your points on the Fair Tax plan. I can’t say I am a fan of it either. In any case, whenever I see things like “international banking families” I begin to suspect black helicopters are following who ever wrote that line!

By: Warren Sloane

Warren Sloane — Fri, 17 Aug 2007 03:49:36 +0000

Well done with this article. As a Fair Taxer I disagree with a lot of it of course but it is very well written and researched.

Point of information, Japan’s issues are not that they won’t consume it is that they consume too much and produce little that they did ages ago. Banks and Industry are one there and feed off each other in what could be called a slow death spiral.

Thats beside the point really.

Again well written.

By: Paul Curtis

Paul Curtis — Thu, 16 Aug 2007 22:43:43 +0000

I've read Kotlikoff's defense of the FairTax here (subscription only); he uses the same unconvincing arguments I listed in the post (e.g., the regressivity would be mitigated by the prebate and by rich people buying lots of stuff; the one thing he adds is the point that FICA is regressive -- a point with which I don't disagree, but that's not dispositive for the FairTax in itself).

Also, note that Kotlikoff is calling for a 33% tax, not the 23% Boortz claims to be advocating. What's more, he uses "yesterday's Japan" as a nation that reaped the benefits of taxing consumption as opposed to income -- I'm certainly no expert, but wasn't "yesterday's Japan" followed immediately by "today's Japan," wherein the economy is locked into endless recession because nobody will, y'know, buy anything?

I've no doubt that Dr. Kotlikoff is a very smart man. But color me unimpressed by the argument that a massive, regressive flat tax is the only way to stave off fiscal "meltdown."

But anyway... "international banking families"?

By: Ian

Ian — Thu, 16 Aug 2007 22:08:48 +0000

There is no “free lunch” mentality – rather, this is how critic observers like to derogatorily frame advocates.

Keep in mind that the reduction of prices (due to a cost reduction in doing business – not having to comply with a tax code) applies only to dollars of income spent; it does not apply to all the income a consumer makes. What the FairTax accomplishes is a gain in the base of the tax, full tax payment by illegals, visitors; fairtaxed imported goods. If you bother to check the growth of consumption, you’ll be amazed to see it’s robustness since 1913 – the year the international banking families took over America and enslaved Americans by sticking their hand in family income creating the debt/credit-driven society.

And we all know how the FED has protected the value of a dollar; after they caused the recession (warning off those who were closely connected – check Richard Rahn’s work), they’ve brought us to a place where China has now become our new banker.

Renown economist Laurence Kotlikoff believes that failure to enact the FairTax – choosing instead to try to “flatten” what he deems to be a non-flattenable income tax system – will eventuate into an irrevocable economic meltdown ( http://snipurl.com/meltdowninprogress ) because of the hidden aspects of the current system that make political accountability impossible.

By: Paul Curtis

Paul Curtis — Thu, 16 Aug 2007 21:29:11 +0000

Hi Warner … sorry, I’m a bit confused — are you referring to me not naming you when I linked to you? I guess I just don’t always do that (nor do I expect those who link to my posts to always do that). No offense meant.

By: Warner Todd Huston

Warner Todd Huston — Thu, 16 Aug 2007 16:43:41 +0000

Say, it would be nice if you mentioned who wrote this piece in your post, Paul.

(Hint it was me! LOL)