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Should the FairTax Solution be Part of Fiscal Cliff Negotiations?

With tax the big issue in "fiscal cliff" negotiations, would now not be the right time to take a serious look at the FairTax solution?

On Dec. 17, U.S. Sen. Saxby Chambliss, R-Ga., and U.S. Rep. Rob Woodall, R-Ga-7, sent a letter to the Joint Committee on Taxation to produce a revenue estimate of H.R. 25 and S. 13, the FairTax bill. According to a press release from Woodall's office, this estimate would allow the FairTax proposal to be considered during congressional negotiations for tax reform.

“The current tax code has become too burdensome and complex, and is filled with provisions that benefit only a few Americans at the expense of everyone else. That’s simply not right,” said Chambliss. “Now is the time to enact the FairTax, which would create a fairer, simpler tax code that allows every American the freedom to determine his or her own priorities and opportunities.”
 
“No matter what they do, honest, hardworking Americans are punished under our current tax code.  Pass the FairTax, and we can unshackle America’s job creators and jump start this economy.  Pass the FairTax, and we can reward all Americans who contribute to our economy—not just those who can afford the best tax lawyers and accountants,” Woodall said. “We, as a nation, can do better than relying on a tax code that picks winners and losers.  Let’s level the playing field with the FairTax and restore more freedom to our economy, not more government.”

The FairTax collects taxes on spending instead of on income. It repeals all federal personal income taxes, corporate income taxes, payroll taxes, self-employment taxes, capital gains taxes and gift and estate taxes. At this time 23 percent is the suggested rate.

The National Center for Policy Assessment, however, says it won't work. It claims that at a 23 percent rate, someone paying more than that in income taxes now would be better off, but someone paying less would be worse off. The NCPA claims this system, again, is more beneficial to higher income earners.

What do you think? Is this the right time finally to have the FairTax solution come up for consideration? If so, why so - and if not, why not?

Stephen C. Eldridge February 11, 2013 at 09:34 PM
To add to Hank van Giesen's comment of 4 hours ago: With all due respect to economics Phd's bless their hearts) we can submit nanalytical papers, find errors and shortcomings in them and hone those papers until we all agrre on the one proper projection.Yet is still only a PROJECTION, a mere THEORY because econoncs CANNOT PREDICT ANYTHING! No-one can say for vertail exactly how much prices will rise. I make a totally independant point, an in-your-face MINIMUM sales tax rate of 38%-68% will precipitate the 2nd American Revolution. No-one will be placated by a slight reduction in pre-tax prices nor by not paying IT - they will be inflamed by those tax rates on virtually EVERYTHING THEY BUY.
Matthew Dirks February 12, 2013 at 04:00 AM
"Frank" was an obvious typo. I meant to type "Hank", and spell-check must have "fixed" it for me and I didn't notice the error (as it was late when I posted). "Kotlikoff & Tuerck are/were paid by AFFT and their claims thus SUSPECT. " So just because independent analysis is paid for means it's "suspect" (which I take to mean presumably biased and therefore faulty)? Is independent analysis funded through government also suspect? Furthermore, most analytical studies are paid for by some group in some fashion (most analysts aren't going to be working on a project for free), therefore, that means *all* analysis is suspect and, therefore, why should you trust any of it or bother studying it if it's so suspect? I read through their works as well and while expect a PhD in economics to know what they are taking about, especially on fundamentals, but I have read though the whole piece before and found no fault with their analysis (although Bruce Bartlet thought he had found a "flaw" in their analysis but was promptly corrected on his *own* oversights). "Charlie Rangel almost chiked on the PREBATE. Chas. Pascarell (D-NJ) called it a "Fairy Tale"" Are you now taking *politicians'* analysis on sound economic policies over actual studied economists? Please, if you're appealing to credibly, they can hardly manage to properly budget the money they bring in and still have to borrow on top of it, not to mention that a budget hasn't actually been passed in (going on) 4 years.
Stephen C. Eldridge February 12, 2013 at 02:03 PM
Response to Matthew Dirks' commment at 11:00PM last night: Yes, especially when a loobying group funds "research", one (who is not naive) must view such "research" with skepticism. Any such "research" should be thoroughly analyzed and challenged. All "research" should be challenged thoroughly. Bruce Bartlett, among ohers, did challenge the FT and found significant flaws. The FT response (in the article "Do the Math") was "corrected" ONLY IN YOUR MIND, thats your opinion, not a FACT - I find that Bartlett found some critical flaws in FT and then I discovered far more flaws than Bartlett did. Charlie Rangel choked OVER FT's GIANT NEW ENTITLEMENT - amazing, a Democrat did not want to burden us with a giant new annual bill to pay (your dismissal of this as merely "political" is superficial, IMHO). Charlie Pascarel's calling FT a "fairy tale" sounded to me like he performed financial analysis on the bill (after much analysis, I share his conclusion) - again, your dismissal of his opinion as merely "political" is itself superficiial, IMHO.
Stephen C. Eldridge February 12, 2013 at 04:48 PM
Matthew, Further to my last respons to you about "correcting Bartlett's "math". They id not find fault with Bartlett's math, they merely supplied the FT's propaganda math, which I find extremely faulty (why don't you join me on my blog, Reforming our ax System and we can discuss this in an orderly fashion, starting with the Prebate). The eal point I wanted to re-emphasize is that you appear to be in awe of economists calculations, treating them as gospel that must be corrrect is the math is not faulty. I view those calculations are mrely interesting THEORIES - honest ecnomists will admit, the cannot predict anything with guaranteed accuracy - their predictions are not biblical.
Sharon Swanepoel February 14, 2013 at 02:46 PM
An executive summary PDF has been uploaded at the request of Stephen Eldridge

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