Talk:FairTax

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This is a controversial topic that may be under dispute. Please read this page and discuss substantial changes here before making them. Make sure to supply full citations when adding information and consider tagging or removing uncited/unciteable information.

Archives If there are unfinished discussions or suggestions haven't been implemented that have been accidentally archived, feel free to move them back to the talk page.
Archive 1: Jun 2005–Aug 2005 Archive 2: Aug 2005–Jan 2006 Archive 3: Jan 2006–Jun 2006 Archive 4: Jun 2006–Dec 2006 Archive 5: Jan 2007–Mar 2007 Archive 6: Apr 2007–Nov 2007

Contents 1 BHI label 2 Distributional Effects and BHI Study 3 HalfDome changes 4 Double-taxation 5 Social Inequality 6 New Bruce Bartlett source 7 A few issues 8 Worked example 9 Wolf in Sheep's Clothing 10 Joint Committee on Taxation 11 Clarification needed? 12 2nd Chart in "Distribution of tax burden" is Not Representative of the FairTax 13 Tax avoidance issue 14 Links to Critiques 15 New study by Kotlikoff 16 Splitting hairs on terminology 17 Question 18 comments on intro section 19 FairTax name

[edit] BHI label

There has been some back and forth on affixing the label of "a conservative think tank" to the Beacon Hill Institute. What would conservative mean here... Right, Right of Center... In the artile statement addressed (the study referenced) was done in partner with Larry Kotlikoff, who is a democrat. In fact, he is the economic adviser to Mike Gravel. Labels labels.. Does it make the article any better? No.. We have not attached labels to every other organization in here.. Ludwig von Mises Institute, Argus Group, Arduin, Laffer & Moore Econometrics, Brookings Institution, National Bureau of Economic Research, National Retail Federation, or Citizens for an Alternative Tax System. Personally I don't think that most people know that Brookings is liberal. If I don't know, I can click on the wikilink and read about their background. I don't think it is proper, necessary, or even correct at this point to affix such a label. We don't affix labels to the different economist. I don't say "conservative Bruce Bartlett", "democrat Laurence Kotlikoff", ".. William Gale" or whatever.. it only polarizes the article unnecessarily. There is no place in the article where we affix labels of conservative or liberal, left, right, etc. - it only adds bias. Add it to the organization article itself. Morphh ^(talk) 21:10, 09 December 2007 (UTC)

I think it is only fair to give the reader a little backround on an organization being cited, at least a word (I've reduced my characterization to "conservative"). The BHI was founded by a conservative businessman/politician, it is funded in part by national conservative heavyweights like the Coors family, and I have added several in-state references to the article referring to it as conservative (I'm sure I could find more if necessary). The BHI calls itself "grounded in the principles of limited government, fiscal responsibility and free markets" (from their "mission statement"). And as for labels in general, I'm not sure it would be a bad idea to add background on some of the other organizations cited. The Laffer in Arduin, Laffer & Moore is of coure Arthur Laffer of Laffer curve fame, for instance, responsible in large part, for good or bad, for Reaganomics. Brianyoumans (talk) 21:26, 9 December 2007 (UTC)

The inclusion is intended to give the impression that the estimate has conservative bias (whatever that would mean). It is a polarizing statement. However, the study being referenced was done in partnership with Laurence Kotlikoff of Boston University, who (as I stated above) is a democrat and the economic adviser to Mike Gravel. So to balance this out, I would have to include that the study was coauthored by Kotlikoff and his political influence.. and what about the other authors.. it gets messy and it is unimportant for the encyclopedia (at least for this article). We're implying bias where we have no evidence of such. The rebate calculation likely uses the exact same formula used by William Gale of Brookings, since their study used Gale's methodology as a base. Morphh ^(talk) 0:29, 10 December 2007 (UTC)

BHI is mentioned multiple times in the article; this is just the first mention of it. Whether or not it is important to give a little backround on it here, it is important to give that information to the reader somewhere. I don't think Kotlikoff's politics are relevant here; anyways, Gravel is a marginal candidate well outside the Democratic mainstream, his advisors are not guaranteed to be liberal or even Democrats. Brianyoumans (talk) 08:18, 10 December 2007 (UTC)

As someone who has closely followed the FairTax, and is aware that many so-called "think tanks" are funded by various politically-motivated groups with a particular agenda, I agree with Brianyoumans that the affilliation/policital leanings of various groups that produce studies that support or refute the FairTax is important.

For example, the fact that the ONLY studies that support the FairTax were done by (i) Arthur Laffer group, who's clearly hardline Republican/Libertarian, and (ii) the BHI (which, until Brianyoumans pointed it out, I had no idea was a conservative group funded by the Coors, who tend to fund super-conservative causes) is extremely relevant. The fact that the BHI study (and, I suppose, the Laffer study) were funded by AFFT is also relevant.

In contrast, the fact that neither William Gale, the President's Tax Reform Commission, or the Joint Committee on Taxation receives any funding from any group actively opposed to the FairTax is pretty darn relevant as to who is the most credible when it comes to producing a study. Now I suppose you could say that Larry Kotlikoff is liberal, and that is true, but it's also true that he views the FairTax as a way of forcing retired folks to pay a bigger share of the Social Security and Medicare by increasing their tax burdens. That, of course, is not explained anywhere in the article. And I suppose you could add that some people view the Brookings Institution as being liberal (just as some people will always insist that the mainstream media is liberal), but I suspect you would be hard pressed to find any objective evidence of that.

As you know, Morph, I think yoiu do a great job of keeping this article pretty balanced, but if the BHI is a conservative think-tank funded by Coors, I personally think that is pretty significant and certainly calls the objectiveness of their analysis into question.

64.94.224.248 (talk) 19:39, 10 December 2007 (UTC)GeorgiaTex

I'm not suggesting that philosophies of the included organizations are unimportant. I fully support describing these in the article about the organization and the wikilinks are there for anyone to learn more about any particular subject, person, or org. The sources are also there for the reader to gain more information. I'm sure we could each make arguments about why this org or person is such and such influenced in whatever way. I could go on for about an hour on how the Tax Panel and JCT are the least credible. For neutrality, we should try to stay above the partisan claims and just describe the study. Tax panel said this, BHI said this, Brookings said this. I've been around wikipedia for a while and I have seen several articles biased and overwhelmed by labels. I don't want to go down that road with this article with insinuations of bias for this and that. It is very well done and I'd hate to see it turned into some partisan back and forth piece. As for Brookings, there are several sources that say they are on the left (even the directories like Google) but again.. it seems petty to include it. Gale did a great study and I don't want to "boost or reduce" his work by using a slang label meant to imply that his work is biased. He deserves better than that. Kotlikoff deserves better than that. The other authors of the BHI study deserve better than that. We're an encyclopedia - not a tabloid, not the news. I may not agree with them in some cases, but I do respect them. Describing the background of an organization in an article about the organization (or person) is one thing, it is something different to inject a label to that organization or person on every article they're included in. Morphh ^(talk) 20:50, 10 December 2007 (UTC)

We aren't a tabloid, but I think it might be reasonable to give the reader some hint that they might wish to evaluate the credentials of the studies cited. On one hand we have, say, the Brookings Institution, one of the oldest and most respected public policy research organizations (which the Wikipedia article labels as "centrist", by the way)... and on the other, we have the Beacon Hill Institute, a research group founded by a conservative businessman/politician with an explicit conservative/free-market agenda, at a fairly second-rate university, funded in part by strongly conservative national foundations, and which other than this issue appears to stick to mostly Massachusetts-related matters. I think it is more than fair to flag them as "fiscally conservative"; the only question in my mind is whether to include more info about BHI in this article, since so much of the supporting work on FairTax is published through them. Brianyoumans (talk) 20:12, 11 December 2007 (UTC)

Brookings is described in our article as an "independent research and policy institute with a left-liberal inclination." The progressive watchdog group FAIR called them centrist. Again, that's what the wikilinks are for. This is not an article about Beacon Hill Institute or Brookings and we should not poison the well to slant the reader's view with partisan labels. Morphh ^(talk) 20:36, 11 December 2007 (UTC)

I think it is a bit extreme to call adding one label "poisoning the well". If I put a sentence in the article saying, "Economist Brian Youmans calls the FairTax a load of hooey" (I did minor in economics, many years ago), then you could always put in a link to an article on me which revealed that I had very few credentials, but how many people would follow that link? Putting a quote in the article by someone with dubious credentials would obviously be a mistake. By quoting both BHI and BI, this article in effect puts the BHI on the same level of believability as the Brookings Institution, and gives the reader no info - other than the "fiscally conservative" label - about BHI's self-proclaimed small government/free-market bias. Brianyoumans (talk) 23:01, 11 December 2007 (UTC)

Who are we to assign "levels of believability" or to say that BHI should not be believed as much as Brookings? That is not our place or the place of an encyclopedia. We should not get mixed up in this sort of thing in some ancillary article. I did move the statement to a study that is just BHI (and not partnered with Boston University's Kotlikoff). I also removed the references since they are cited in the main article on BHI. They are not needed in the FairTax article. I only challenged the statement as there were no sources in the main article at the time of inclusion. Morphh ^(talk) 22:51, 15 December 2007 (UTC)

If we are not assigning "levels of believability", we aren't doing our job as editors. Brianyoumans (talk) 12:19, 16 December 2007 (UTC)

That is not the proper role of an editor and against our NPOV policy. NPOV policy requires views to be represented without bias. The intent of adding the label is to imply bias, and thus the material can not be fairly represented without bias. Representing "levels of believability" sets up the perception that one view is more correct then the other. NPOV states that none of the views should be asserted as being judged as "the truth". It should also not be asserted that the most popular view, or some sort of intermediate view among the different views, is the correct one to the extent that other views are mentioned only pejoratively. Readers should be allowed to form their own opinions. The label is applied to BHI in the attempt to add a pejorative inflection to the data presented. Morphh ^(talk) 5:00, 22 December 2007 (UTC)

It has been a month and this addition still really bothers me. Fiscal conservatism is typically used to refer to the idea that governments should be small, and tax lightly. In the reports that the Beacon Hill Institute has written on the FairTax, it has always started with the assumption that a FairTax would be "revenue neutral" - i.e. would neither raise nor lower total government revenue (as measured in purchasing power terms). The use of the term "fiscal conservative" in the current context is clearly designed to pejoratively imply that the work of the Beacon Hill Institute lacks credibility and should be taken with a pinch of salt. This is clearly against our NPOV policy as pointed out in my last comment. Morphh ^(talk) 14:32, 22 January 2008 (UTC)

[edit] Distributional Effects and BHI Study

After reading the comments above about the BHI being funded by the Coors family, I went back and reread the BHI's 2007 study of "A Distributional Analysis of Adopting the FairTax." What I read blew me away as to how intentionally deceptive the FairTax advocates really are. (Sorry to be POV here, but it's the truth.) There is so much economic mumbo-jumbo in the study that it is very difficult to read; so I, like most people, initially just read the introduction and conclusion, where the BHI asserts that the FairTax is actually progressive. However, when one actually READS the report, you will find the exact opposite.

In particular, if you look at the effect of the FairTax on various income groups (see Table 6), you will see that the FairTax REDUCES net income of every income group under $75,000, while INCREASING net income of those over $75,000 per year. Families at the lower end of income, those makeing under $30,000, will see their net incomes drop by over 25%. On the other hand, families with the highest levels of income (averaging $2 million per year) will see an average gain of 20%!

Conclusion: THERE IS NO WAY IN HELL YOU CAN CALL THE FAIRTAX PROGRESSIVE. So, how does the BHI get away with doing so? Easy, they say that those who spend less under our current system will spend more under the FairTax (presumably because the price of goods will go up), so they claim that the FairTax is progressive when it comes to spending.

Morph, even you have to admit this is just NONSENSE! This is a total sham! What more proof do you need? At least be honest in the article and point out that AFFT's OWN STUDIES show the FairTax will benefit the rich and hurt the poor, i.e., it's regressive as hell.

64.94.224.248 (talk) 21:19, 12 December 2007 (UTC)GeorgiaTex

• I haven't read the study, but basic economic principles and common sense are sufficient to tell anyone that a sales tax, once you get beyond the level of the rebate, is regressive with regards to income. Rich people spend a smaller percentage of their income than poor people do, because they invest large amounts of their income. The poor and middle class spend most of their income, so most of their income will be subject to tax. Bill Gates probably only spends 1% of his income, so he would pay only a tiny percentage of his income - maybe 0.23% - as taxes under FairTax. The only way you can call it "progressive" is to say that it is progressive as to consumption - which is technically true, but not a very good way of measuring progressivity/regressivity. Brianyoumans (talk) 23:14, 12 December 2007 (UTC)
• To be clear, there was I think only one or two grants from the Coors family foundation. But there were a lot of grants from something called the Roe Foundation. This is more obscure, but basically it seems to give grants to conservative research organizations nationwide, including people like the Heritage Foundation, which has a Thomas Roe Institute. Roe was a Republican businessman from South Carolina; he was on the board of trustees of the Heritage Foundation in the late 1980s. Here is some info on Roe, on the site of an organization he founded. Brianyoumans (talk) 23:31, 12 December 2007 (UTC)

I removed this statement for a bit until it is discussed a bit more. "However, that same study also showed that the FairTax would reduce the net income of families making les than $75,000 per year, while increasing net incomes of families making over $75,000 per year." I'm trying to understand the table 6 and I'm a bit confused. -9,853 net income when your gross is $5,000, so did they spend $15,000 to get this? How can you have a -$9,853 net income? Did they add the prebate as income and taxed the entire amount, instead of using the rebate to reduce the tax burden of their gross income. I don't get it - I'll need to review it more. So this may need more explanation. I rather take a direct statement but I want to make sure we're using the correct context as well. That is why conclusions or introduction are the best source, to whatever study we use on Wikipedia. When you start analyzing charts of a static tax incidence half-way through a study (which may have been set up for a later dynamic analysis or something else) and then draw a conclusion, you may be misrepresenting something. As far as the tax base used to measure progressivity, it should be based on consumption, since consumption is the tax base. Progressvitiy is essentially based on effective rate, which is a measure of the true tax burden applied to the tax base. Using income is an arbitrary correlation and assumes that you never spend any savings. Also consider what this debate really is, all personal consumption is taxed so what you have left is investment (that which grows the country) and education. When investment is used for any personal consumption, it is taxed. So they take a tax base other then the one tax, use cross-section time frame, ignore any future spending of savings, and then dismiss the benefit of untaxing investment - this is how you get regressive. Doesn't sound like a proper way to measure it to me. Then under the current system they ignore wealth when doing their calculation, since it is only based on income. Anyway, there are analysis methods that measure tax incidence - Gini coefficient, Tax concentration coefficient, etc. - the FairTax has been show to be more progressive using these analysis methods. Either way.. it reminds me of the 23% / 30% debate.. two methods of presentation. Everything seems like a political gimmick from either direction. Ways to pluck the goose with the least amount of hissing, class-warfare, etc. I can understand the vandals that just blank a page and replace it with "taxes suck". Indeed. Morphh ^(talk) 22:16, 15 December 2007 (UTC)

Morphh, I think the explanation for the -$9,853 net income is that these are people who are not working (taking a year off, retired, unemployed, living off their boyfriend, etc.) but still spending a good amount of money and hence paying the tax. (Note in panel 1 that those negative numbers go away when we break things down by expenditure.)

I think you might be right about analyzing charts ourselves in Wikipedia (even if some of us do so in our real lives ;) ) because that starts to border on original research. Perhaps a quote from that last paragraph of point A? (Provided that it is noted that that quote is only in reference to static effects.)

Cheers, HalfDome (talk) 18:38, 16 December 2007 (UTC)

I don't think you are going to convince very many people that it is better to discuss progressivity/regressivity in regards to consumption, as opposed to income. Income or wealth seem like better measures; they are certainly what people are currently used to thinking about when the term "progressive" is used. "Changing the yardsticks" - measuring progressivity against consumption instead of income, stating sales tax rates as a percentage of the total instead of a percentage of the base price - is of course a classic way of confusing an argument. And about the -$9853 net income... seems very simple to me. If you earn only $5000/year, you will be getting ~$15000 from the prebate, and so you will end up with a negative income at the end of the year, the government will be subsidizing you to the tune of ~$10,000. What's confusing about that? This would presumably replace welfare/food stamps/etc, which have much the same effect. And just for the record, the info you removed should definitely go back into the article, at a prominent location. Brianyoumans (talk) 12:14, 16 December 2007 (UTC)

It is only a yardstick as Americans are much more familar with an income base. That does not make it the correct definition or perception of actual tax incidence. This is an international economic term used to describe incidence and is certainly applied in a much broader sense. Political use has dumbed it down and in doing so, lost some of the meaning. Consumption is a measure of wealth (when not limited to a cross-section time frame) but income is something very different. The first thing you do when you become rich is reduce your income. At any rate, this is not a discussion for this talk - better served on a blog. Perhaps I'm missing the obvious but I still don't understand what table 6 is saying. It does not replace welfare/food stamps/etc. Those earning 0-10 are below the poverty level, so they would have a negative effective tax rate if they spent 100% of their income. They would receive their untaxed income, get a $2,852 prebate for the year (if the family size was just one adult - more if larger), and possibly an increase in benefits for any inflation. When you compare this against payroll taxes, there is no way the poor are paying more in taxes. So how does this reduce net income by $9,853. I'm going to e-mail the authors of the study and have them explain it to me unless someone here can make it clear. Since net income, I expect, is income minus taxes, to have a -$9,853 of net income, you would have to pay $15,000 in taxes (or pay three times more in taxes over what they make), which would be a consumption level of $65,000 (for single person household making $5000 a year). A family of one can spend up to $10,000 tax free - so how do you get a negative net income if you pay negative taxes? I'm not saying the data is wrong, I'm just saying that we might not be reading it correctly - we may be misrepresenting the data. Morphh ^(talk) 2:36, 17 December 2007 (UTC)

Morphh, did you read my possible explanation of the -$9,853 above? HalfDome (talk) 08:40, 17 December 2007 (UTC)

I did. In that case, the person is not using their income for consumption but someone elses. So that doesn't make sense. They never had an income to make negative. The example also says an income of $5,000. Morphh ^(talk) 15:18, 17 December 2007 (UTC)

Just so everyone is aware, I did e-mail BHI and asked for further explanation and if we were reading the table correctly. Morphh ^(talk) 14:52, 18 December 2007 (UTC)

Morph -- With all due respect, you should show what you just wrote to an intelligent friend (who knows nothing about the FairTax) and ask him or her to explain what you just wrote. You are straining to use the most convoluted logic to defend something that you've bought into (with the most honorable of intentions) and are resorting to mumbo-jumbo rather than stepping back and looking at the reality of the situation.

FairTaxers CLAIM that the FairTax is "revenue neutral". But there own studies show that even in a best-case scenario (with zeron tax-avoidance), it would create a deficit of $500 billion.

FairTaxers CLAIM that the FairTax is "progressive." But there own studies show that this just isn't so (unless you redefine progressivity to mean spending rather than income.)

FairTaxers CLAIM the FairTax is a tax on wealth, except that when you look at their studies you see that this only occurs using "generational accounting,", where decendants of the rich supposedly spend accumulated wealth over generations.

FairTaxers CLAIM the FairTax is 23%, but only if you redefine how sales taxes are calculated.

I do agree that this is probably too much to put in an encyclopedia article and it can easily wind up with too much POV, but as a reasonable and intelligent person, I hope you are beginning to realize that the emperor, in fact, has no clothes.

By the way, I sent Kotlikoff an email asking about how the FairTax could work if each family had to spend, on average, $138,000 per year. I haven't received a response yet. Did you ever post the same question on the FairTax Groups board? I'd really like to learn what the response would be.

Best, GeorgiaTex —Preceding unsigned comment added by 68.211.16.125 (talk) 16:42, 16 December 2007 (UTC)

This is not the place for this type of discussion. Shoot me an e-mail if you really want to discuss it. I haven't posted anything to the blogs. Personally, I've realized that the emperor usually has no clothes regarding anything in politics. I've become cynical about most issues and have lost interest. We've talked before, I don't care if we get the FairTax, Flat tax, VAT, or your tax plan.. I think the current system is destructive in so many ways and it needs to be addressed. I think there are benefits and drawbacks to each method. I only stick around here on Wikipedia now because I've put so much work into WikiProject Taxation, tax related articles, and particularly the FairTax article - I don't want to see them degraded in quality. I've worked very hard on them, trying to make them as encyclopedic (per Wikipedia standards and policy) and neutral as possible. I now find such editing and blogs more work then fun.. in fact I find them quite stressful and time consuming. I have a family and I much rather be doing things with them. Morphh ^(talk) 2:36, 17 December 2007 (UTC)

Morph -- I feel for you, man. You aren't being paid for this, you're volunteering your time trying to contribute to our collective knowledge, and look at all the grief you take (especially from me!) I realized I was getting a bit outside the proper bounds for discussion here, but I got carried away and couldn't stop myself. Besides, I lost your email address so I couldn't discuss this with you offline. (If you send me an email, this time I promise I'll save the address.)

Talk about "No good deed goes unpunished." I think one of the circles of hell must be being forced to edit a controversial article in Wikipedia. Who was that guy doomed to enternity to push the boulder up the hill, and just when he almost made it to the top, it rolled down again? Here you are, slaving over this article, and you think you've JUST ABOUT made every reasonable (and some unreasonable) changes that anybody could possibly want, and along comes someone like me to mess up all your hard work.

I apologize, Morph. And we really will have that beer sometime. (P.S. I posted on fairtaxblog.com, which is up again, and we're having a lively debate on how much spending would be needed to make the FairTax. I've clearly gotten under a few folks' skins. Heh! Heh!

Best, GeorgiaTex —Preceding unsigned comment added by 68.158.224.28 (talk) 04:16, 18 December 2007 (UTC)

Just wanted to post an update. I did hear back from the e-mail to BHI and one of the study authors stated that he would post a reply on the talk here. Morphh ^(talk) 19:40, 02 January 2008 (UTC)

Every tax change has winners and losers but this article does not discuss this. For example, a retired couple who are living off investment income saved from taxed wages would now get a 30% increase in their living costs from food to apartment rent - surely they lose? A couple able to travel could easily purchase high value items like fashion or jewelry overseas and pay for their trip - isn't that an advantage your Walmart customer will not have? Sure you could control the borders but how do you that without taking an inventory of everyone entering the country? Not only will you have to take off your shoes at airports - a customs official will be writing down what they are worth. How does a heavy tax affect tourism - surely a hefty sales tax discourages inwards and promotes outwards vacations? How do internet based services work - how does the US tax service collect the salestax from US customers downloading from overseas servers? Seems the well paid have a wealth of loopholes, while the poor have very few. —Preceding unsigned comment added by 60.234.231.99 (talk) 01:06, 5 January 2008 (UTC)

[edit] HalfDome changes

I'm going to address the recent changes by HalfDome point by point here. I've made comments in the summary but it appears we need a longer discussion.

• The change that discusses the tax rate percentage does not improve the article. It makes a reference to the subsection, which is not good practice in a lead. This is a major point in presentation and should have a very brief explanation - there is an entire section on it and more if you count the sales tax section and other areas throughout the article. It is one of the first attack points and probably the most visible dispute of the tax. Saying that some say this and some say that is not enough and implies right and wrong, or a difference on what is "correct". It also doesn't clarify what the legislation states, which is the primary black and white source - everything else is opinion on what it should be. We don't take a position - The way it was written, it presented both views as correct rates with different methods of calculation. It is important to present this elementary aspect in the lead. This sentence structure has been in the lead for quite some time and reviewed over and over - I dispute the change and you have no consensus at this point to change it.

Well, all of your smug claims here (about whether the article is improved, what is good practice, whether right and wrong is implied, and whether law, which is written by politicians who definitely have political agendas, is a "black and white source") are generally baloney. Still, it's sounding a little better to me now than it did before - I think the wording was improved somewhat. I'm adding an additional clause to make the concept a little clearer, particularly because "total register price" is a phrase that is not used enough for people to be familiar with the precise defintion. But otherwise, I think it is not too bad. HalfDome

I'm going to reword this as it doesn't make sense to me. "23¢ of every $1 spent in total, including the tax payment itself" Your additions are in reference to a percentage, but we're not discussing the percentage in this example. If we said 23% of every $1 spent, this would make sense. We set up the percentage and this is an example of how the dollar is applied. We also have to consider this is a summary, where more information is presented in the article. Morphh ^(talk) 14:50, 05 January 2008 (UTC)

Hm, I cannot see how that could not make sense. It seems really straightforward to me. (What part of "23¢ of every $1 spent in total, including the tax payment itself" don't you understand? ;) ) Maybe it is because it is lumped into the parentheses with the comparison with income taxes. I know this is a summary, but we should make the idea clear to readers. The real problem I think is the phrase "total register price". Typing that phrase into Google, only 238 hits come up, where all but 17 of those are "very similar" to the ones already displayed. In addition, nearly all of those 17 seem to be copies of this article or earlier versions of it. I'm going to try rewording it a different way now to just clearly lay out the definition for "total register price". I think this should make things clear for everyone. 24.59.148.187 (talk) 03:29, 24 January 2008 (UTC)

I read and reread this change and the prose just doesn't seem clear and concise to me when presented like this. What does that mean - "23¢ of every $1 spent in total, including the tax payment itself"? I know what you intend for it to mean but I don't read it like that. You're meaning to refer to the total price, which includes the tax payment itself. However, 23¢ is the tax payment, so it doesn't make sense to me as including the tax payment? The $1 spent in total includes the tax payment itself but it is confusing when you say 23¢ of every $1 spent includes the tax payment. It is not clear that you're talking about just the $1 but instead "23¢ of every $1". I think it is much clearer and concise to just say "23% of the total price including tax (23¢ of every $1—calculated like income taxes)". The 23¢ of every $1 is an example of how the total price includes the tax. We also have the example of 30% (30¢ on top of every $1) to balance this understanding. I'm open to changes to the term "total register price", which could be stated as total retail price, final retail price, final price, or total price. In fact, I'm going to remove the term "register" and just make it "total price". Both the terms "final" and "total" convey that it includes the tax (as on any receipt) but I'm fine with stating "including tax" as a form of compromise and it does seem to make it clearer. Morphh ^(talk) 15:09, 24 January 2008 (UTC)

• Production cost - defined as "the price of an object is determined by the sum of the cost of the resources that went into making it. The cost can compose any of the factors of production (including labour, capital, or land) and taxation." As referenced, the FairTax removes taxes embedded into the cost of production via the income tax system. The FairTax is added on after (at the point of final sale). There is nothing that is "alleged" here. This just biases the statement like only proponents suggest it. Do we have any opponents that suggest otherwise? Not talking about prices here.. The article does provide numbers in the section "Theories of retail pricing".

I think you are confused here about the definition of "alleged". Something can be both alleged and true at the same time, and without a doubt this is alleged because you, in fact, are alleging it. To say that it is absolutely true that production costs would fall, you would have to prove that no matter what the circumstance, it is impossible for production costs to not fall. It is very difficult to prove such statements because, well, we have limited cognitive capabilities and it is quite difficult to be sure that we have thought of every possible circumstance.

So, as an example that might be helpful to you, consider the issue of tax cheating. As I read in a textbook at some point, when sales taxes get above 10%, tax cheating becomes an significant issue (i.e. people trading with each other, not reporting it, and hence not paying taxes). With this tax rate being much higher than that, there is a possibility of significant tax cheating, and as such it is possible that the government would require businesses to keep more thorough records, follow more regulations, etc. that would push production costs up. And, moreover, it is possible that this increse could be large enough that it would offset any drops in production costs.

Now, if you are foolish, you might ask me to reference that. But, of course, I do not have to (and I'm not going to waste the time looking through my textbooks) because, of course, the burden of proof is on you here. To actually make the statement that you want to make, the burden is on you to prove that it is impossible for what I just described to happen (and impossible for anything else to happen that could possibly push costs up). Knock yourself out if you want to try, but until you do, it is still only alleged and not absolutely true. If the real problem is just that you do not like the word "alleged" itself, it's probably fine if you say "argued" or "claimed" or "stated by person X" etc. instead. HalfDome

NPOV policy states - By "fact" we mean "a piece of information about which there is no serious dispute." There is no serious dispute here. You don't have to prove that no matter what the circumstance to make a factual statement. Do we have someone of significant weight and reliability that argues that removing tax costs would not reduce production costs? Consider we're talking about all corporate income taxes and the employer share of payroll taxes (which have their own compliance costs) - a significant amount of taxes. The FairTax also pays the retailer .25% to cover some compliance and administration. There is no serious dispute here to turn this into something that people allege or argue. I'm going to change it to "expected", which leaves the possibility of other circumstances while still providing some aspect of common belief. Morphh ^(talk) 14:50, 05 January 2008 (UTC)

I think there is dispute which is serious, but I also think that the word "expected" works well to resolve the concern I had. 24.59.148.187 (talk) 03:29, 24 January 2008 (UTC)

• "Technically speaking," - This implies that 30% is correct and that 23% is just technical mumbo jumbo. We can't present it that way in Wikipedia for neutrality.

I have no idea where you get this from. "Technically speaking" means, well, speaking in a technically correct way, rather than in a more common, less technically accurate way. And, that is exactly what that statement did. How can you call being technically correct "mumbo jumbo"? It's the exact opposite. Still, the statement has been modified since you reverted, and I think it is better now. HalfDome

• "fiscally conservative " - I did not remove this statement, I moved it - see this edit. With the recent change, it is now in there twice. I moved it to a study that was done strictly by BHI and not in partner with Kotlikoff. Please see the BHI Label discussion above where Brianyoumans agreed to moving it, although I still don't agree with the inclusion. I even moved it to a section which would hold more weight with the statement - the section on distribution effects. Was the prebate cost a better place?

Okay, I see what happened there. I think it is probably best to have the label mentioned the first time BHI appears in the article, so a reader will be aware of it every time BHI comes up, as they read through. HalfDome

I don't see where you removed the second statement when you added it back in again to the first placement. The placement doens't matter to me. While I think it violates NPOV to included it (see BHI label talk above), it should only be in there once if it is in there. I'm going to remove the second instance. Morphh ^(talk) 14:50, 05 January 2008 (UTC)

Yep, that's fine. 24.59.148.187 (talk) 03:29, 24 January 2008 (UTC)

• "Some economists" - the statement of many mainstream economists is a direct quote from Money Magazine "Many mainstream economists and tax experts like the idea of some kind of consumption tax -- in fact, the superiority of consumption taxes is almost conventional wisdom these days." I don't mind putting in a however statement but lets not reduce the statement without reason.

Okay, well, it should definitely be pointed out then that that is the opinion of Money magazine, particuarly because they do not list the "many" or provide a source themselves. We should leave it completely to the readers to decide for themselves whether they think Money can be believed. HalfDome

I added the word "these" here to point out which economists. 24.59.148.187 (talk) 03:29, 24 January 2008 (UTC)

• "however" - I'm fine with including a however statement but it needs some context and integration into the summary statement. I'm not sure why the challenge with this since I only moved it where it made the most sense. It should not be some independent sentence - this is a summary of the subsections. Morphh ^(talk) 16:16, 17 December 2007 (UTC)

You are getting smug again about "what made the most sense". However, reading it over now, it seems okay to me. I think before I missed the additional "howevers" at the end of the paragraph.

Cheers, HalfDome (talk) 09:36, 5 January 2008 (UTC)

Ok, I made some changes to try and address a couple things. I reduced the rate statement in the lead from the prior by removing some duplication. I added "associated" to reference the costs being discussed. I changed BHI in this instance to include all the economists. Again the statement of fiscally conservative is still present in the other section. I took the exact wording of the inserted material but just placed it into the summary where it made the most sense. Morphh ^(talk) 16:54, 17 December 2007 (UTC)

[edit] Double-taxation

Thanks for this article. It was an interesting and informative read. I was "for" the FairTax up until I read the part about potential double-taxation. As a saver, my savings has essentially already been taxed at my marginal rate. When that money is spent, I will pay another 30% tax. This is a real deal killer for me. Can anyone explain what ways FairTax proponents might make their proposal more appealing to those such as myself? 68.55.138.238 (talk) 19:04, 25 December 2007 (UTC)

The argument for taxing illegals and the underground economy with a modified sales tax is sort of a paradox, since a modified sales tax also taxes those who saved their money specifically for future consumption, including senior citizens have money in 401K or a IRA and even those people who will receive benefits from their insurance plan. On the other hand, the wholesale prices of goods and services will drop approximately by the amount of the FairTax, keeping retail prices where they are, more or less. That means retirees, illegals, and the underground economy will pay sales tax, but they won't necessary spend more money to get what they want. Heck, they could consume abroad by importing goods from the US free of FairTax! ***Remember that many retirement plans include corporate investments would not longer have capital gains taxed.Kmarinas86 (talk) 20:57, 25 December 2007 (UTC)

I think the above is confused. There is no reason why savings in a 401(k) or other tax-deferred account would be double-taxed; no income tax was ever paid on that money, and if the income tax is abolished, then none ever will be. But anyone with after-tax savings from before the FairTax was instituted would get screwed, unless a special exemption were made for these funds. I have not seen any proposals for that exemption.

The same thing happens e.g. to a saver who works abroad, and then returns to the United States to retire. (Current income tax law will usually make it possible to pay the higher of the tax rates in the two countries, not the sum.) On the other hand, the FairTax creates a very good incentive for US workers to retire outside the country.

I am not sure why wholesale prices would drop by the sales tax rate, and retail prices would stay constant. I don't know whether you mean the retail price including or excluding tax, but neither makes sense. If it's including tax, then we've created something out of nothing, because 23% of that is now going to the government, so the merchant is only getting 77% of what they were before, and somehow delivering the same product. (The FairTax proponents argue, correctly, that some fraction of the price is embedded corporate taxes and such. So the price before taxes should go down, but not by the full sales tax rate, since those embedded taxes are only a fraction of the taxes that the single sales tax replaces.) If it's excluding tax, then the illegals are clearly paying their way, because they're now paying the same tax rates as everyone else was before, if you believe that the FairTax is revenue-neutral. (Note that even now, someone who does not pay income tax, and lives in a state with no sales tax, still "pays" the embedded taxes.)

The proposed FairTax would apply to imports. Most sales taxes do.

The math that's given below is wrong; a 30% income tax (inclusive) would be replaced by a 43% sales tax (exclusive). And the point made in the original comment is, as far as I know, completely correct and not addressed by the FairTax proposal. 74.61.11.168 (talk) 21:01, 6 January 2008 (UTC)

The best place for that discussion is http:\\www.fairtaxblog.com or http:\\www.fairtaxgroups.com. This page is mainly for discussing the article. As for paying another 30%, I'd say that such would be an impossible effective rate. Also consider you may be flipping from inclusive to exclusive in your statement. A 30% income tax equates to a 50% exclusive rate, which is how you were quoting the FairTax. So not sure what you mean by "another". I suggest you go the the FairTax.org website and read there full content regarding savings - perhaps The FairTax benefits seniors. Then read some opponent viewpoints. Morphh ^(talk) 2:47, 26 December 2007 (UTC)

[edit] Social Inequality

Wikipedia should remove the star from this article as an article of excellence. There is very little critique of the fair tax in this article and the section stating that the fair tax would reduce inequality is unsubstantiated by empirical research and the reference is an opinion piece. There is no mention of the Gini Coefficient or other standard measures of social inequality and no discussion of the fact that the proposed fair tax would only offer a rebate to those UP TO the poverty line. Thus, if a family of four earned $21,000 annually in 2007 they would not be eligible for a rebate under the proposed 23% plan. Nowhere are the critiques of the underclass and the working poor explored. Social science research by William J. Wilson, Dalton Conley, Melvin Oliver and Thomas Shapiro speak to these concerns for those most disadvantaged into society and should be reflected in this article. —Preceding unsigned comment added by Zoostation (talk • contribs)

You are incorrect regarding the prebate, it is not limited to those below the poverty level. The rebate is given to all citizens and legal resident aliens to untax purchases up to the poverty level - it is based on family size, not income. So lets get your facts strait before you come in here blasting at an article that has had significant review. The information in there is not only opinion pieces, it contains all known studies regarding the distributional effects of the FairTax. The information stating that the fair tax would reduce inequality is based on the only research (several studies) done on the FairTax legislation, so I'm not sure where you get that it is unsubstantiated. As far as I know, there has been no empirical research that states otherwise. The tax panel is the only negative study that I know of and that is not a study of the FairTax, although we have included it in the article anyway. The information on the Gini coefficient and more information can be found in the sub-article. This is a summary presented here. I searched for the social science research you described but found nothing in regard to the FairTax. Could you provide a link for the research that discusses the effects of this legislation? Could you provide links to the material that critiques the FairTax (other than what is already included) regarding the underclass and working poor. I'd be happy to review and include other material that is relevant from reliable sources. Morphh ^(talk) 18:03, 28 December 2007 (UTC)

While Zoostation might have that particular incorrect, the essential question of turning a regressive sales tax into a 'progressive' tax remains. It appears that the term progressive makes sense only if we narrow our focus to lower and lower-middle income families. However, broadened to include the entire spectrum of economic levels, it become apparent that as always, sales taxes are regressive.

Sadly, supporters invariably answer this issue by saying "Well, the wealthy don't pay taxes anyway," which seems both a non sequitur and false. Such a statement simply doesn't answer the question.

Is there a substantive answer whereupon a regressive tax is turned into a progressive?

--UnicornTapestry (talk) 13:28, 5 February 2008 (UTC)

What are you using to measure progressivity? The FairTax is similar to a progressive flat tax that exempts income to a certain level. If you use strictly income to analyze consumption and limit the time-frame to one year for all income levels, it will look regressive. However, many economists don't look at it this way. For one, that would assume that you never spend any savings. Even under the current system, certain investments and savings can be deferred to future tax periods, which goes to the base argument of when savings and investment should be taxed. The income tax system largely taxes it before and consumption taxes it after. As you might know, annual income is not an especially accurate measure of one's ability to pay. Households at the high end of consumption often finance their purchases out of savings, not income. A household's consumption tends to fluctuate less from year to year than its income does, and in some respects offers a better measure of a family's sustainable standard of living. Many economists feel that averaged over periods longer than one year, which smoothes out fluctuations in annual income, expenditure comes closer to reflecting "permanent" income and is the more appropriate measurement. Economists have also used lifetime income when measuring the progressivity of a consumption tax. In doing so, research of the FairTax shows that it is more progressive then the current system when you factor the replacement of regressive payroll taxes. Proponent economists argue that taxing consumption is effectively the same as taxing wages plus taxing wealth. So to answer you question, many economists and politicians consider it a progressive sales tax. We present both points of view in the article. Morphh ^(talk) 14:08, 05 February 2008 (UTC)

[edit] New Bruce Bartlett source

I'm not going to dive in with edits, but for someone who wants to, here is a new Tax Analysts source where Bruce Bartlett criticizes the fairtax in much more detail than in the sources already cited in this article: [1]. Fireplace (talk) 01:57, 30 December 2007 (UTC)

Thanks, I'll have a read and include them. I don't think I'll be able to get to them all today, but I'm making notes of the points of criticism and will include them this week. Morphh ^(talk) 21:56, 30 December 2007 (UTC)

It's going to take me a little longer to finish including this... hopefully I'll have it done next weekend. I've been spending all my time on these talk pages instead of working on the material. ;-) I've also down to the areas in the study that are a little more complicated to include. They require more thought with integration into summary style sections and sub-articles. Some points I'm trying to consider what would be the best section for inclusion. Morphh ^(talk) 20:18, 06 January 2008 (UTC)

BHI has just released two new studies Fiscal Federalism: The National FairTax and the States and Tax Administration and Collection Costs: The FairTax vs. the Existing Federal Tax System. So I'm also working on reading them. BHI is also writing a rebuttal piece to Bartletts publication. ...And the FairTax: The Truth: Answering the Critics is due out February 12th. Too much stuff... I think I need a drink. Morphh ^(talk) 17:15, 08 January 2008 (UTC)

On his web site, Lawrence J. Kotlikoff has provided a new article titled “Why the FairTax Will Work - Bartlett’s Unfair Attack on the FairTax”, a response to Bartlett’s criticism of the FairTax in the December 2007 issue of Tax Notes. Morphh ^(talk) 15:48, 17 January 2008 (UTC)

New Tax Notes article Memo to Bruce Bartlett: Just Do the Math. Morphh ^(talk) 22:12, 21 February 2008 (UTC)

[edit] A few issues

I generally think the article is fair, ballanced without adgends. When I looked at Jonn Linders web site a few months ago it appeared that what might be called a marriage penelty had been illiminated. This is also true of table in the article. If two adults (18+ years old?) with the same address file as separate head of household they get about $1000 (in the older table)more in prebate than if they file as a couple. Determining if they are really each a head of household will sometimes be subjective and our auditers should not have to get envolved. Worse some people change their status more than once per year. Let's hope this is a real change for the better.Ccpoodle (talk) 02:16, 10 January 2008 (UTC) I suppose a child can only be claimed if more than 50% of the child's support is provided by the head of household. This will mean some children cannot be claimed by anyone. IE 3 head of households each supplied about 33% of the child's support. My guess is fewer grey areas than in the present IRS code, and cheaters will typically be caught at less cost than IRS. Congress does however have the abillity by amendments to make the Fair Tax less fair.Ccpoodle (talk) 02:02, 10 January 2008 (UTC)

I'm admittedly fairly ignorant about this topic, but there are a couple things I'd hoped to get out of reading the article that I didn't. First, I'd like to know how much support and opposition the FairTax proposal has among experts (surely the NYT/WaPo/etc has mentioned this somewhere). Second, while recognizing that Wikipedia is not a crystal ball, it would be helpful to know whether experts believe the political capital exists to get this through Congress anytime soon. (e.g., Bruce Barlett, in the Tax Analysts piece, says the chance of this getting through Congress is zero, while the Money Magazine piece quotes a YLS prof saying 'don't underestimate it's momentum.' Both are interesting.) Relatedly, the lead states that "Many mainstream economists and tax experts argue that... [pro-FairTax stuff]", followed by three citations. But the first citation doesn't seem to support that claim, and the second and third are both to FairTax-associated sources. It would be better to cite an independent source for claims about what "many mainstream economists and tax experts" believe. Fireplace (talk) 01:20, 1 January 2008 (UTC)

Thanks for the comments. It is difficult to tell how much support or opposition the plan has. I don't know that a nationwide survey has been performed. We have included the cosponsor count and showed the correlation to other tax reform legislation. We also discuss that it is never been voted on in Congress. The first few sentences in the third paragraph in the lead tries establish the standing. AFFT has done polling that shows that something like 85% of informed citizens support the plan, but we haven't included that - I'm not sure how formal it was. You could show how many dislike the current system (there has been surveys on that), but I don't know that it would correlate. We could include some economist opinions in the legislative history section. I guess we hadn't in the past as it seemed like a zero sum that didn't add anything. So in so says it won't pass, so in so says it is inevitable, so in so says it has momentum. In the end, your left with a general statement of people disagree. Many support their own version of tax reform that doesn't exist in any legislation. Does criticism equal opposition? We may have that some think it is the worst form of taxation, except for every other type. Other factors may be relevant in the future, such as how well Mike Huckabee does. It is a long shot; any large tax reform proposal is... I'll read up and see how best to include this information. As for the "many mainstream economists and tax experts", I believe that is a statement from the Money Magazine article discussing consumption taxes in general. The other sources support the statement in regard to the generally accepted benefits of a consumption tax. Our article then goes into arguments against this type of consumption tax. So it sets up some of the general benefits of a consumption tax that apply and then criticizes specific aspects of the FairTax plan. Morphh ^(talk) 14:21, 01 January 2008 (UTC)

Thanks for the reply -- I'm really not informed enough about this, so I appreciate it. Just one follow up... the Money Magazine article says "Many mainstream economists and tax experts like the idea of some kind of consumption tax -- in fact, the superiority of consumption taxes is almost conventional wisdom these days", which I don't think fully supports the sentence it sources in the article: "Many mainstream economists and tax experts argue that consumption taxes, such as the FairTax, would have a positive impact on savings and investment (not taxed), ease of tax compliance, increased economic growth, incentives for international business to locate in the U.S., and increased U.S. international competitiveness (border tax adjustment in global trade)." Fireplace (talk) 17:50, 1 January 2008 (UTC)

I think I see what your saying. The first source references that economist like consumption taxes (which the FairTax is) but it doesn't say what is superior about them. The second and third source discuss the benefits of consumption taxes, which is used to state the general reasons why these taxes are liked. The mulitple points have been brought together in a summary form in the lead. The article itself goes into more detail regarding these areas and more reference information can be found there. In addition, there are references below that apply to the entire article that discusses these concepts. Do you feel the information is incorrect or misrepresented? I'll try to find a source that has it discussed as a more direct statement. Morphh ^(talk) 20:09, 01 January 2008 (UTC)

Yeah, I feel like there's a bit of OR behind the jump from (1) "many economists like consumption taxes" and (2) "here are reasons some people like consumption taxes" to (3) "many economists like consumption taxes for these reasons." If there are references further down that explicitly support (3), they should be brought up into the lead. Fireplace (talk) 20:18, 1 January 2008 (UTC)

No problem, it should not be too hard to find something that states this more clearly. To the thought, we're not explicitly saying that they only like them for these reasons. These are just some of the common arguments in support of consumption taxes. I guess we're making a small jump that they like them for the reasons that are commonly argued. For now, I'll see about spliting the statement into two parts. After I finish integrating the Bartlett article material, I'll try to find a better source for the joined statement, which may be in a later reference. Morphh ^(talk) 22:18, 01 January 2008 (UTC)

The most visible proponent of the FairTax today is probably Mike Huckabee -- perhaps he should be mentioned directly in the lead. Fireplace (talk) 16:24, 6 January 2008 (UTC)

I agree that he has become one of the more visible proponents in the last couple months due to his success in the primaries. Several months ago he was just one of many, although he was probably one of the most vocal. John Cox out voiced him in the beginning on the issue but then dropped off the map. There were a couple cosponsors that were running and then you had Mike Gravel pushing pretty hard on the Dem side. Thompson got a bit of attention on it for a while. McCain said he would sign it as well. The topic was brought up in a couple debates. Since Huckabee has been gaining in Iowa, and now won Iowa, it has brought him more into the light. I was waiting for him to move a little further along. If he continues to do well, then it will be more of an issue, if not - then he'll probably disappear. I have no issue with including him at this point in the lead. If he fades away, we can remove his name. In the third paragraph, something like "...and additional visibility is being gained in the 2008 presidential campaign (candidate Mike Huckabee being the most vocal)." Is this what you had in mind? Morphh ^(talk) 19:57, 06 January 2008 (UTC)

Yup. I added it sans the parentheses. And you're right -- if/when his star fades, it should probably be taken out of the lead. Fireplace (talk) 20:24, 6 January 2008 (UTC)

[edit] Worked example

I have some problems with the worked example added. For one, the data is from 2004, when 2006 data is available for poverty figures (from the Census) and 2005 available for historical effective rates. In addition, it uses a household of 2.6. While average, the family consumption allowance does not break down like this. It is either two or three. A family of two would have a poverty level of $20,420 for 2007, not $14,000. A family of three would have a poverty level of $23,900. The poverty level is based on the figures from the U.S. Department of Health and Human Services, not the U.S. Census Bureau (they don't appear to be the same figures). While I don't dispute the figures and math, the combination of this data in this way is a "Synthesis of published material serving to advance a position" - original research. If we used 2005 data for effective rates, the figure would be 14.2% on $58,500 for the current income system. Using 2007 poverty level figures and rounding up the 2.6 to 3 for household size, the figure would be 13.6% for the FairTax. If you rounded down (household of 2), the rate would be 14.9%. Using 2005 figures for the rebate, the figures were $19,140 for a couple and $22,400 for couple and child. So the rates would be 15.4% (2) and 14.1% (3) for 2005 on $58,500. Like I said, I don't have a problem with the math, but I think this is a synthesis of published material serving to advance a position, either way - for or against the FairTax, it is OR. Morphh ^(talk) 14:16, 03 January 2008 (UTC)

To see this in terms of realistic numbers, we can turn to the CBO figures^[1] on household income and total federal tax rate. For the middle quintile of American households, all federal taxes consumed 14.1% of the $58,000 average income. With the poverty level set at approximately $14,000^[2] for an average household size of 2.6,^[3] that household would pay FairTax on $44,000 of its income, for an effective federal tax rate of 17.4%.

Another thing to add... the reference to household size (2.6), (2), or (3) does not correlate with anything on the income tax side. It just compares the middle quintile and then it makes a jump to the average family size for the baseline of poverty. What if the middle quintile has a larger family on average? Also note that the section this was removed from is a summary style, so this information should first be present in the sub-article. Morphh ^(talk) 22:18, 03 January 2008 (UTC)

[edit] Wolf in Sheep's Clothing

The failure to move any of the above argumentation and analysis to the "Fair Tax" wiki-page, and, (what amounts, by resource allocation and by deletion, to) effective censorship incurred by wikipedia members (not to mention users) by being prevented from entering links to credible academic sites offering peer-reviewed critical-analysis, affords "Fair Tax(ers)" a ringing endorsement by wiki during national party primary season. As provided above, in a link from economist Greg Mankiw's website, the economist Bruce Bartlett rebuts the Fair Tax. By doing so, Bartlett hangs out a great deal of the dirty laundry hidden behind the well-funded (bought and paid for) research put forth by the class-warriors promoting this fallacious charade. Let's call the "Fair Tax" what it is: Britney Spears economics. Look's good, taste's good, and feels mighty fine--until one wakes up and has to pick up her dirty laundry. By labeling this think-tank-vetted submission an "article of excellence" wikipedia appears to be endorsing a political ploy. Will the wiki-editors fight for and defend the economic version of cold-fusion, very recently endorsed by no less of an authority on the economics of taxation than a preening religious huckster with presidential ambitions? Will God sanction the fair tax? The jury is still out. Due to the time-sensitive nature of this important political topic during peak presidential primary season, and, considering the widespread traffic beating a path to wiki--the seedbed of all information--at the very least provide a link on the "Fair Tax" page to contrasting opinions immediately, most notably to Bruce Bartlett's link as mentioned above in a half-dozen talk page entries. Most importantly, thanks to all of you for your active stewardship of wikipedia. keenbean

Where do you get that there has been failure to move the above argumentation into the article, or that there is censorship, or that anyone is being prevented from entering links to credible academic sites. I've been adding the Bartlett material all week and the Tax Notes article is sourced at least 10 times and I'm still adding material. Give me a break - We've had it less then a week! It's only in one post, not have a half-dozen. The link you added is already included in the sources. Most of what I've been adding for the past two months has been mainly Bartlett criticism. Morphh ^(talk) 14:18, 05 January 2008 (UTC)

Thanks for the reply morph. Adding a direct link to Bartlett's article at the bottom, along with all of the other considerable efforts you have made, would be a step in the right direction. Incidentally, the censorship I refer to is that of members being prevented from offering opposing opinions--i.e., it is an issue of who is controlling the printing and editing of on-page information. My assumption is that you are that person--and for that I thank you for taking on a thankless task. When I attempted to add a simple link to Harvard economics professor Greg Mankiw's site first thing this morning, not knowing there was a war of words ensuing on the talk page, I was rebuffed. Providing a direct link to the original source (Bartlett) would allow casual readers (non-academics) critical insight into this important topic during presidential primary season. Tax policy is an absolutely critical topic to Americans seeking to inform themselves regarding policy platforms. The way the article reads--even today--strikes the reader as a ringing endorsement of tax policy cold fusion. Along with many other critical failures, the shameless huckster with presidential ambitions I refer to was just quoted in national news as endorsing the "Fair Tax." Along with the implied endorsement of his campaign by GOD, the fair tax pledge is an equally devious throw-out to a certain regressive faction of the American landscape--i.e. the "privileged one percent" and "white sheet voters." Hence the urgent need for broader information. My personal training is as a political scientist with deep experience with the issues faced by poor working families--whose needs it is increasingly un-fashionable to protect; my father is a Harvard trained corporate tax attorney; my childhood friend is on the staff of the BHI. I disagree with both of them, wholeheartedly, and have presented a qualitative critique simply seeking to broaden the debate above. To repeat, providing a direct link on the page of the "Fair-Tax" page is critical to broadening the discussion. Thank you for your efforts. keenbean (talk) 15:57, 5 January 2008 (UTC)

I don't quite understand - you removed your own link according to the article history. However, adding links should follow the guidelines in external links. I'm not sure it would be a good addition there as it is already in the references and highly sourced (and will be more sourced in the next week as I include more of his criticism). However, it is just one of many many articles - why should he get such a link over anyone else. Wikipedia is not a linkfarm. They can search Google to find more direct critical articles. I don't see that any one is using censorship to prevent opposing opinions. However, we do have to work within the rules and policies of Wikipedia. Morphh ^(talk) 15:18, 05 January 2008 (UTC)

Points well taken. Although the initial link was not removed deliberately by me, my hope is that it has been restored using the same model as the other links provided. If not, since you have considerable experience, perhaps you could help me to do so. My argument is this: if a key contrasting article published by a peer-reviewed source is not provided in the "References" section alongside prominent links provided to those sponsoring the article, then the lay-reader will not be privy to equally-accessible critical contrasting information. For this reason, (concerning technical references, please understand that I am not a routine wiki-reader or contributor) I suggest that a link to a contrasting opinion/article be provided to offer balance to the materials supporting the subject which are posted prominently in the "References" section. Again, the thrust of my criticism is that equal resources might ought to be devoted to contrasting opinions--considering the importance and timeliness of this issue. And while we agree that Bartlett's key article is but one of many, the prominence of the References section--added to the fact that there are no direct links therein to provide contrasting opinions--is what is troublesome, particularly considering facility of access for the lay-reader. With that, since I am not a wiki-professional, I defer to your judgement. Good day.keenbean (talk) 15:57, 5 January 2008 (UTC)

The items in the refernece section are books, not articles. Bartlett's article is already in the notes section and referenced as footnotes in the statements. By the time I'm done, it is going to be one of the most sourced references in the article. Let me look at the guidelines for this and get back to you. It would seem to be bias to add this one specific Bartlett opponent article as web reference, when we have no others that do the same. We have many other opponent pieces as well as proponent articles - not sure why this one should get any particularly favored placement. Morphh ^(talk) 17:33, 05 January 2008 (UTC)

My mistake. My input above should read "External Links" (section) in every case where I erroneously wrote "References" (section). Does it not strike you as odd that the references to Bartlett in each of the various wiki-entries related to Fair Tax are identical, and (perhaps rightfully--in retort) seek only to narrow contrasting opinions? It appears Bartlett did pen the Scientology-Fair Tax link. Did Scientology seek a fair tax platform, but fail to brand and market it in the way that Fair Tax proponents have succeeded in doing? Chicken and egg, or, was Bartlett engaging in smearing opponents with a broad brush? Is that brush broad enough to denounce his rebuttal? Has Bartlett replied, or sought to clarify? Does the Scientology linkage entirely discredit all opposition to using an inflated national sales tax as the fundamental source of revenue? Are Bartlett's economic policy points--along with those of others--worthy of outright dismissal? The world waits and wonders. Thanks for engaging this important topic. Good day.keenbean (talk) 17:23, 5 January 2008 (UTC)

The external links section is fairly specific in what it is used for and I don't think an article like this fits this role. All references to any specific article will use the same number as a footnote. At the Notes section, that reference will have a (a,b,c,d,e) linking to each reference in the article. This is just the formating of footnotes for wikipedia and does not intend to narrow opinions - contrasting or otherwise. As for Scientology, they had they're own national sales tax plan that was different from the FairTax. It was pushed by an organization called CATS (Citizens for an Alternate Tax System). Americans for Fair Taxation was a separate organization that did their own research, polls, and came up with their own plan, the FairTax. I'm not sure why it matters in tax policy - seemed like a way to smear based on guilt by association, since most people dislike Scientology. I would take some of Bartlett's criticism lightly. Some is very good and some is just factually incorrect. Throughout his WSJ articles and this one as well, he has made many factual errors. Until this article, he was still saying the prebate was based on income, which it is not. In this article, Bartlett states that family age is required on the FCA application, that failure to refile will result in an immediate cut off of the prebate, and that the prebate WILL go to members over the age of 18. None of which is accurate. He presents the tax panel study as the FairTax in the tax distribution (table 5), which the tax panel never stated. The tax panel's reference to the FairTax was when they discussed the rate and the tax base. He's quick to point out (pg 1252) the Tax Panel tax rate only includes income taxes when discussing the tax rate but completely ignores it when he's discussing tax distribution. According to the Center on Budget and Policy Priorities, three-fourths of taxpayers pay more in payroll taxes than they do in income taxes. I don't mind an honest critique but some of the things Bartlett writes are misinformation in my opinion. So just be careful how much you take a face value. Morphh ^(talk) 17:59, 05 January 2008 (UTC)

From Wiki-Guidelines: "On articles with multiple points of view, the number of links dedicated to one point of view should not overwhelm the number dedicated to other equal points of view, nor give undue weight to minority views. Add comments to these links informing the reader of their point of view. If one point of view dominates informed opinion, that should be represented first. For more information, see Wikipedia:Neutral point of view—in particular, Wikipedia's guidelines on undue weight." Unpacking this policy is an exercise in itself. My reading is that the Fair Tax site verges on a near one-sided policy pronouncement. Thus it needs a contrasting opinion--provided by an "other equal point(s) of view." Thus, since the Fair Tax points-of-view, as evidenced in the "External Links" section, are represented first (and thoroughly), there ought to be room for an "External Link" to equally popular points of view. That other points of view are equal, and not to be given "undue weight to minority views" is evidenced by the finding that a significant portion of the intellectual and academic community seek to illustrate the perils of such a policy position for a very significant portion of the population--in their view... In my view, the way the article reads now verges upon that of an Advertisement for a minority policy proposal--however well funded. It also appears to have been lifted from papers produced by the organization itself, if not created by a member. All that aside, it appears the ascribed rules above permit the publishing of an "External Link" to Bartlett's paper in the section set aside for external links--based upon the contention that Bartlett's rebuttal supplies a contrasting opinion of--equal--(if not greater) weight (and not a minority view) which ought to be allowed to be made readily accessible on the existing "External Links" section. Thanks again for your considerable devotion. keenbean (talk) 17:55, 5 January 2008 (UTC)

I would completely agree that this article still reads like, if not an advertisement, at least a very carefully written advocacy piece. Brianyoumans (talk) 20:05, 5 January 2008 (UTC)

You've been around wikipedia long enough to know this doesn't help. Broad statements like this do nothing but cause wikistress, issues, and arguments - leading to the main reason why people leave wikipedia (see Raul's first law of Wikipedia). You also probably know that every controversial article is normally perceived to be biased if it does not line up with the reader's preconceived views. We've had this reviewed by tax experts, proponents, opponents, editors with no interest, peer-reviewed (twice), GA-reviewed, FA-reviewed (three times). We've even had people from other countries review it that have no vested interest in the plan but are knowledgeable on taxes. If you have a particular issue with the article, bring it up and we'll work to address it. Not saying there is not room for improvement but this is just the way things tend to go. We're all volenteers here just trying to make things better. Personally, if I use a broad brush - I think the article is biased against the FairTax as it includes much criticism that is not of the FairTax plan but other made up sales tax plans. However, the material should be included and any rebuttals should be included. Morphh ^(talk) 1:39, 06 January 2008 (UTC)

The links in the external link section are not to articles though. They are to main sites that provide more information. Many of the external links are seen as neither pro / con. They serve a function to the reader beyond the context of the article. Once I finish adding in the Bartlett points, there will be no additional value in providing such an external link. See "Links normally to be avoided" (1) and "What should be linked". If there is opposing opinion that is not present in the article, where you can find a reliable source for, then we can look at including it. Please don't charge one-sided bias without providing examples of where we have not included proper criticism from a reliable source. Such is not helpful in improving the article and only causes stress and arguments. There is usually reasons why things are worded the way they are. This article has gone through many editors and has had significant review by both proponents and opponents. Morphh ^(talk) 18:19, 05 January 2008 (UTC)

Keenbean, since I have not finished including all the pertinent Bartlett points, I'll be OK with adding the link for now. Morphh ^(talk) 1:39, 06 January 2008 (UTC)

Thanks morph. It would be great to have additional contrasting opinions threaded into the article in such a way that does not continue to lower the Fair Taxer's to the appearance of denigrating those holding opposing views. As we both know, Bartlett's decision to link Fair Tax to Scientology was either a mistake based on historical firsts, or, possibly disingenuous. Likewise, smearing Bartlett with his own Scientology blunder--as it currently reads on the page--distracts the reader from his pertinent points (tarring him with a broad brush). The very idea that every single one of the "External Links" is a site put forth by supporters of the Fair Tax platform, while a lay-reader seeking insight is stuck sorting through dozens of bibliographical references to divine opposing views such as Bartlett's, smacks of narrow advocacy. We all know that the lay reader will turn to what is made available through the External Links first, before sifting through the dozens of (out-of-order) bibliographical sources. We also know that the sites listed currently are not neutral--each one is a Fair Tax proponent or resource including a Fair Tax calculator. This subject is too important for such an outcome, which is why providing a link (maybe to Mankiw's site?--linked to Bartlett--a poor substitute for a fancy website--until some well-heeled donor sends academic authors such as Bartlett millions to create a website to respond to every new Intelligent-Design-like proposal that is foisted upon Americans) remains important. Thanks for volunteering to manage what is clearly a very important issue. keenbean (talk) 13:39, 6 January 2008 (UTC)

I removed the word "however" after Bartlett's statement on Scientology, which perhaps makes it less contrasting. As far as the external links, we have to include the first one as they are the FairTax (AFFT) and the second is the bill sponsor. They have additional information regarding status, studies, etc. They do not link to anything in particular - the entire sites are dedicated to the FairTax. The last two are the bill, which is neither pro or con. So you're left with the Forum, Scorecard, and Calculator. The forum will take questions and posts from both opponents and proponents. Information can be learned from either group. We're only suppose to include generally one forum if it is well promoted as the main form, which this one is. I don't know of an "opponent" forum that is well promoted and dedicated to the FairTax. The Scorecard can show opponents or proponents who favors the bill and who doesn't - I see no issues there - the information is reliable and I don't expect that an opponent site would be any different if there was one. The last is the calculator, which could show that you lose or gain under this system. I don't know that the calculator is biased but if expected, I would remove this link before adding a direct link to an article. Makiw's site is a blog and would not be appropriate for Wikipedia. I'm not sure how many people use external links but Wikipedia is not a link farm. It is intended to be very limited and link to some well known central websites of information beyond the article. It is not intended to link to specific articles, that is what the body of the article is for - to lay out the opinions of such articles. If someone wants to skip reading the article and jump to the external links, they have the wrong place - try a google search instead. I'd much rather remove links then add unless you find a reliable opponent site that is similar in function to the ones discussed above. I'm flexible on removing John Linder's link (since this is not highly published site) or the calculator and perhaps the forum, if this would improve things. I agree that they could be considered proponent sites but I have no similar opponent sites and in some cases I'm not sure it would matter based on the content (like the scorecard). It is important that this section stay within the proper role for External links. I don't want to start adding article links in here for the sake of adding opponent sites - balance applies if we have similar sites on both sides to include that fit the context of the section. Thank you for discussing the issues. Morphh ^(talk) 19:33, 06 January 2008 (UTC)

I'm troubled by the way Brianyoumans's assertion was dismissed, to wit: "this article still reads like, if not an advertisement, at least a very carefully written advocacy piece."

Unlike religion and politics, economics and taxation are measurable and quantifiable, and don't have to depend upon opinions (like "my political party is better than your political party").

I'm furthered troubled that outside the polite and respectful realm of this wiki forum, questioners of the FairTax are usually shouted down and ridiculed. Finally, I'm concerned that so much of the FT presentation has been obfuscatory, if not deceptive. (i.e, the way rates are calculated, etc.) Supporters place a lot of emphasis on the utopia that will be and not the mechanics of how it works.

I approach tax issues as an economics instructor, so I like to think I have less bias than most, but I have to agree with Brianyoumans, that there's a bit too much advocacy and insufficient critical challenge. The lack of critical references is usually attributed to a paucity of opposing 'quality' articles on the web, but I've encountered articles by the Brookings Institute that I thought were well executed.

A friend recently made the observation that people hate the IRS so much, they're willing to take on any other devil-in-disguise to be rid of it. That doesn't reflect my own thinking, but the comment is worth bearing in mind.

--UnicornTapestry (talk) 13:55, 5 February 2008 (UTC)

I did not dismiss Brianyoumans. We've been talking on this article for quite some time. I asked him to address specific concerns. Could you provide a reference to an area that has insufficient critical challenge along with a reliable source to a point of view that is not present? In which area do you find there is a lack of critical references? We've included many references to the Brookings Institute or more specifically to William Gale. Morphh ^(talk) 14:20, 05 February 2008 (UTC)

[edit] Joint Committee on Taxation

The article states that the Joint Committee on Taxation would be part of the process of passing this proposed tax legislation. Correct me if I'm wrong, but normally the Joint Committee is not part of the process. Somebody may be thinking of the conference committee that is typically formed when the House and Senate pass differing versions of the same proposed legislation. Can anyone explain why the Joint Committee is mentioned in the article instead of the conference committee?? Famspear (talk) 21:45, 6 January 2008 (UTC)

Got me on this one - I'm not that familar with the process when it gets to that level. It should be the same as any other tax legislation. I change it to conference committee and if anyone disagrees we can discuss it further. Thanks Morphh ^(talk) 23:40, 06 January 2008 (UTC)

I ended up just removing that statement. Feel free to correct it or reword it as needed. Morphh ^(talk) 23:43, 06 January 2008 (UTC)

[edit] Clarification needed?

The article includes this statement:

John Linder plans to include a sunset provision in H.R. 25 during the 111th Congress that would repeal the Sixteenth Amendment within 5 years after the implementation of the FairTax or the FairTax goes away.

You cannot repeal a constitutional provision with legislation -- sunset or otherwise. Constitutional provisions can be repealed only by action of the states under Article V -- in other words, by ratifying still another amendment to the Constitution. That ratification process can be initiated by the Congress, but cannot be completed by Congress. The applicable language needs to be clarified or removed from the article; I doubt that this language accurately describes what Linder is trying to do. Famspear (talk) 22:02, 6 January 2008 (UTC)

Note: This is separate from the problem of the effect of repeal of the Amendment. As the article already more or less notes, what the Fair Tax proposal includes is a proposed hard or aggressive repeal. Merely repealing the Sixteenth Amendment itself (a soft repeal), without more, would not remove the power of Congress to tax incomes. To prevent Congress from having the power to tax incomes, you would actually need specific language (e.g., in the repealing amendment) that would say "Congress shall have no power to tax incomes" or words to that effect. The article does not go into detail on the complex legal reason why this is so (and perhaps does not need to do so), but fortunately the article does mention it. Famspear (talk) 22:09, 6 January 2008 (UTC)

Thanks Famspear - what the sentence was intending to say is that the FairTax will go away if the 16th Amendment is not repealed within 5 years. H.R. 25 itself would not repeal it, as you stated. So I'll reword it. "John Linder plans to include a sunset provision in H.R. 25 during the 111th Congress that would require the repeal of the Sixteenth Amendment...". Thank you for pointing out the error. Morphh ^(talk) 23:35, 06 January 2008 (UTC)

Thanks, Famspear (talk) 00:39, 7 January 2008 (UTC)

[edit] 2nd Chart in "Distribution of tax burden" is Not Representative of the FairTax

I'd like to suggest the removal of the 2nd chart in "Distribution of tax burden." It's a chart from a completely different sales tax plan and is not representative of the FairTax. This is probably confusing to those first learning about the FairTax here at Wiki.

The President's Advisory Panel made up their own version of a national retail sales tax. Quote from: Lawrence Kotlikoff

Thus, the panel ignored a main advantage of the FairTax—eliminating the regressive payroll tax—and required the sales tax to generate more revenue than the FairTax stipulates.

So the chart shows a more regressive and higher sales tax than the FairTax which can easily give many readers the wrong impression and thus the chart should be removed.

I would also like to suggest that a new article by Lawrence Kotlikoff be considered for inclusion in the list of external links since it's a direct reply to Barlett's.

Off Topic: My research about the FairTax eventually led me to Wikipedia. I must say you have a pretty well balanced article, especially so since I also read the entire discussion. The discussion dismayed me a bit because I perceived what can only be called an attempt to inject political bias into a subject that is supposed to be non-partisan. I can only imagine what goes on daily here at the entire Wiki. Morphh, to put up with this stuff on a regular basis you are a better man than I. Thank you so much. Dculling (talk) 16:21, 17 January 2008 (UTC)

Thanks for the comments. I agree with you on the chart, but for the sake of neutrality, we've included it. I argued that same point a while back - it is not a graph of the FairTax, and therefor should not be included as an example of tax distribution. It was argued that there were no opponent charts in the article, which presented bias and that we should replace the FairTax chart with the Tax panel chart. To compromise, we've left both charts but with a statement that hopefully makes it clear that this is not the FairTax but a hybrid model. If you have some suggestions on how this could be presented better and still neutral, feel free to comment or make changes. While we know it is not the FairTax, it is what opponents use to attack the FairTax. We can be clear and truthful about what it is, but to remove it may remove a point of view. Looking at the narration, we could probably be a little more clear that their income tax replacement excludes payroll taxes. With regard to the external links, I rather not have either link there. They don't belong in that section. The only thing left on Bartlett's paper to include are some criticism on revenue neutrality and tax burden, which need to be first included in the sub-articles. We can also begin on including Kotlikoff's points. I don't want to make the external links section some repository for anything we haven't yet included that was recently published. Part of the criticism with the external links was their were too many pro-sites. So I'm planning on reducing this to the essential sites and the Bartlett link will go as well. Morphh ^(talk) 18:49, 17 January 2008 (UTC)

By the very nature of the name "Fair Tax" the proposal inked above IS political. To divorce policy proposals (especially those which would change the economic and political landscape radically) from politics is itself dishonest. To refuse to provide contrasting opinions (through equal access--external links) speaks for itself. We remain happy that the Fair Tax advocates advocate for the fair tax. keenbean (talk) 19:26, 15 February 2008 (UTC)keenbean

I would like to suggest another possible issue with these charts. They compare the tax burden resulting from the FairTax and the current income tax as a percentage of income for various income levels, and this implicitly assumes that the natural coordinate for evaluating tax burden is as a fraction of income. This is a common and legitimate perspective, but it is also possible, and arguably informative, to plot the actual number of dollars taken in Federal taxes as a function of income. If anyone knows where such a representation exists, I suggest that perspective be included here as well.74.192.15.25 (talk) 16:44, 22 February 2008 (UTC)

Good point, Income is surprisingly poorly correlated with expenditure and the ability-to-pay. If I see such a chart or table, I'll post here and we can consider inclusion, if not in this article maybe the sub-article. Morphh ^(talk) 17:39, 22 February 2008 (UTC)

[edit] Tax avoidance issue

The article mentions the problem of tax evasion (people not paying the tax they legally owe). It's silent, however, about tax avoidance. As I learned it in law school, this means structuring your affairs so that you legally owe less tax.

This article about the "Fair Tax" proposal suggests that people would have an incentive to buy in Canada or Mexico to avoid the tax. Under the most common forms of the proposal, how would such transactions be treated? U.S. citizens living in Detroit drive over to Windsor, Ontario to do their grocery shopping. They bring their purchases back into the U.S. and consume them here without reselling. Do they owe the sales tax? JamesMLane t c 17:59, 21 January 2008 (UTC)

I do believe they legally owe the tax in this situation, so I think this would be evasion if they got away with this. Such transactions are to be enforced by the U.S. Customs Service. If they consumed the groceries over there and didn't bring anything back to the U.S., then this might be considered avoidance but it is the intentional effect of a destination principle tax. I'll give the article a read. Morphh ^(talk) 18:04, 21 January 2008 (UTC)

The term black market in the article seems to imply evasion (since it is illegal) rather then avoidance, which is covered by the term underground economy. I'm including a statement on tax avoidance in the section "Tax compliance and evasion", since they use the term avoid and reference Canada and Mexico. Although I'm not sure if that is what they meant, I think it is a valid concern that should probably be included. Morphh ^(talk) 18:30, 21 January 2008 (UTC)

After reading the tax evasion definition on Wiktionary, I do think the article was talking about evasion. Wiktionary defines it as "illegal avoidance", which would follow the terms used in the article. So, now I think I may have introduced original research with this entry as I'm not sure the source supports the statement. The source states "..if consumers seeking to avoid the high sales tax develop a strong black market that sucks money out of federal coffers. Buying in Canada or Mexico would have the same effect." Does "same effect" refer to avoid, which might expand to legal tax avoidance or does it refer to the the aspects of black market and illegal tax avoidance (evasion)? It seems to me to imply buying goods and brining them back to the U.S., which would be evasion, not avoidance. Thoughts? Morphh ^(talk) 19:10, 22 January 2008 (UTC)

There are aspects of both. A Detroit family books the daughter's wedding reception at a hall in Windsor, to avoid the tax. Some of the guests hit a Canadian supermarket on their way home, and by not mentioning the groceries at Customs they evade the tax. Both would be problems for this plan. JamesMLane t c 00:14, 23 January 2008 (UTC)

For decades, Americans who could afford to do so buy their Mercedes or Lexus overseas, drive them for a week, and bring them back to the States as used cars with a reduced excise duty. The so-called FairTax only increases the incentive to buy overseas, thereby reducing manufacturing at home.

--UnicornTapestry (talk) 13:10, 5 February 2008 (UTC)

Americans buying a Mercedes or Lexus overseas would be subject to the tax laws of that country - the VAT in this case (and other embedded income and business tax costs). The VAT (Germany being 19% inclusive / 24% exclusive) is removed from exports when imported to the U.S. for domestic purchase. So if they purchased overseas, not only would they be subject to foreign taxes, they would still be required to pay the FairTax by U.S. Customs when they brought it home. Used is defined in the legislation as something that has already had the FairTax paid, and there is no provision that I know of for a "reduced" duty. The argument of reducing manufacturing at home is inconsistent with research and other aspects of the plan. With the reduction of the corporate tax rate to zero, bringing manufacturing to the U.S. is one of the largest promotions of the FairTax. Princeton University Econometrics did a survey of 500 European and Asian companies regarding the impact on their business decisions if the United States enacted the FairTax. 400 of those companies stated they would build their next plant in the United States, and 100 companies said they would move their corporate headquarters to the United States. If you have a reliable source that states that the FairTax would reducing manufacturing at home and we have not included it, then please present it. Morphh ^(talk) 14:12, 05 February 2008 (UTC)

Could you point me to the provision relating to duties and the FT? I mention German as one example of a country that has programs to attract foreign buyers by providing a loophole for customers to buy a car without the standard VAT, drive it, and (under the present system) bring it into the US as a used vehicle. No one's proposed eliminating duties (anathema to conservative economists) as far as I've heard. Exactly how would this work?

I see your point about manufacturing here, but it's possible that might not translate into buying here (as I believe was suggested earlier). One reason the US remains popular with foreign tourists (not counting the dollar being trashed in recent years), is that products have been cheaper to buy here than in Europe and Japan. I'd like to see that continue, but can it? Thank you.

--UnicornTapestry (talk) 18:10, 7 February 2008 (UTC)

I believe the section that covers this is CHAPTER 1--INTERPRETATION; DEFINITIONS; IMPOSITION OF TAX; ETC., in particular SEC 101 (c-d). I understand your point on it translating into purchasing, which I expect is an argument with most destination principle tax systems. From what I've read in this regard, the gains outweigh the losses. Prices increasing or decreasing would be dependent on if monetary policymakers expand the money supply. If they expanded it, employees would take home their gross paychecks and prices would increase, if they don't - prices would stay about the same and employees would take home net value. For Americans, the purchasing power in either situation is about the same. I'm not as familiar with how this may effect the dollar value to foreign visitors, although I'm not sure this is a large enough portion of GDP to be of concern if such did decrease. The macroeconomic studies I've seen on the FairTax plan show growth in consumption and purchasing power, among other areas. See "Simulating the Dynamic Macroeconomic and Microeconomic Effects of the FairTax" by Laurence Kotlikoff & Sabine Jokisch — "A Macroeconomic Analysis of the FairTax Proposal" by Arduan, Lapher & Moore Econometrics — "The Economic Effects of the FairTax: Results from the BHI CGE Model" by the Beacon Hill Institute. Morphh ^(talk) 19:19, 07 February 2008 (UTC)

[edit] Links to Critiques

All of the external links appear to be proponents of the FairTax. Would be nice to link to some critics as well, if there are sites of that nature. —Preceding unsigned comment added by 142.150.152.178 (talk) 18:35, 25 January 2008 (UTC)

All the links have to fall under the policy of external links. We've reduced the external links to the primary official sites that are dedicated to the FairTax and provide research, publications, and discussions beyond what the article would include. I've searched through the top 100 google hits and did not find any opponent sites that fit such a criteria. If your just looking for opponent articles, then a simple google search will turn up critical viewpoints. We will also have such links contained in the footnotes and references from the positions presented in the article. Morphh ^(talk) 21:46, 25 January 2008 (UTC)

Garnered the same response for my suggestion. It appears that the only solution is for some advocate to construct a "primary official OPPONENT site," which, at present, does not exist. This gives enormous advantage on Wikipedia to "primary advocates" as each and every variation of a single-issue advocacy-pronouncement does not result in private funding necessary to construct a responding commercial site. (This speaks volumes about the perils of commercialization, and about those who would presume to be the "gatekeepers" of wiki, but no room here.) This is in spite of the fact that significant contrasting peer-reviewed (academic, not funded-institute) articles are readily available on the net. While only a writer myself, perhaps collating the various peer-reviewed articles under a single umbrella--to be "linked" on this "fair" tax page would be a good project for a designer. keenbean (talk) 19:48, 15 February 2008 (UTC)keenbean

Many of the articles, studies, and links you describe are present in the article as footnotes to the critical content. So even if you did put together a site that just linked to critical information, would it provide research beyond what the article already includes? The external links are sites that contain a large amount of additional research beyond what the article covers. Since opponent research pretty much gets added instantly to this article, while a vast amount of proponent data does not, the external links guide them to find the additional research. Even the large researchers BHI and Kotlikoff do not have external links to their research, which vastly dwarfs any "opponent" research. Their material is referenced as footnotes in the article to the content, just like opponent research. Morphh ^(talk) 18:23, 15 February 2008 (UTC)

There continues to be confusion here, expressed by many in this discussion thread, and not exclusively "Democrats" or "opponents," about whether this is a one-sided article, or, the product of well-funded think tanks. BHI and AFT are well-funded think tanks, describing themselves as "non-partisan," whatever that refers to anymore. Echoes of "Fair and Balanced" come to mind. As we know, the political machinery pays less and less heed to the legions of unwashed Americans. Is this a panacea to needy Americans? There is a distinction between bought and paid research, and peer-reviewed work, though that is growing ever more indiscernible. That is why arcane policy changes are battled out between academics for years, if not decades, and why the wheels of government are right in moving deliberately slowly--particularly in times of a national crisis. That said, it is good now to find the "Footnotes" section in a more prominent place than at the bottom of the page. P.S. Might be good to include wiki's "progressive taxation" link along side the one for AMT as a salve those concerned about balance and access. keenbean (talk) 19:48, 15 February 2008 (UTC)keenbean

[edit] New study by Kotlikoff

New study by Kotlikoff - The FairTax and Middle Americans – A Case Study Morphh ^(talk) 20:54, 30 January 2008 (UTC)

Thanks for the link, Morph. I have to say, I'm really disappointed in Kotlikoff. I'm surprised he could publish that with a straight face.

If example of the middle class family that pays less under the FairTax is clear enough. But EVERYBODY pays less under a 23% tax-exclusive rate, which is why it cannot possibly raise enough money to fund the government.

But then at the end, he gives a totally ridiculous example of a rich family who's taxes supposedly go up under the FairTax. First he assumes that they currently only pay taxes at a 7.5% rate on their income. Then he assumes that the family spends 100% of its income on taxable goods of services. Both assumptions are basically ludicrous. Plus, he ignores the estate tax. —Preceding unsigned comment added by 63.166.114.11 (talk) 17:20, 15 February 2008 (UTC)

He recently published another one titled: "Why Democrats Should Love the FairTax". Morphh ^(talk) 18:31, 15 February 2008 (UTC)

I'm telling you, Kotlikoff is going to lose his hard-won reputation as a serious economist. To keep repeating that the rich don't pay taxes is just crazy and can clearly be refuted. Moreover, he should talk to an estate planning lawyer before he makes assertions that the wealthy can avoid estate taxes with the proper planning. It doesn't work that way. You can have certain assets given a somewhat lower valuation for estate tax purposes, but once your assets exceed a few million, you're pretty much stuck paying estate taxes unless you give it all away. I hope AFFT is paying him well. —Preceding unsigned comment added by 63.166.114.11 (talk) 23:55, 15 February 2008 (UTC)

[edit] Splitting hairs on terminology

I moved the references to "corporate tax" and "capital gains" tax so that they are inside the parenthetical for the "income tax." The U.S. federal "capital gains" tax is simply one component of the federal income tax. Similarly, the "corporate tax" refers to the Wikipedia article on corporate tax -- which is simply a kind of federal "income tax."

By contrast, the FICA taxes, gift taxes and estate taxes are already properly shown as separate elements (i.e., they are not income taxes).

By the way, some people mistakenly think of FICA taxes as being "income taxes." Although, from the standpoint of an employee who has the FICA taxes (both Social Security and Medicare) withheld from his or her paycheck, it might be difficult to see the difference, the FICA tax is actually not an "income tax"; it's an "employment tax" imposed under Subtitle C of the Internal Revenue Code. By contrast, "income" taxes (individual, corporate, etc.) are imposed under Subtitle A. The estate and gift taxes are "transfer" taxes (taxes on some, but not all, transfers of ownership of property), and are imposed under Subtitle B.

Ain't taxes fun? Famspear (talk) 17:59, 12 March 2008 (UTC)

[edit] Question

I have a quick question, would this proposal affect the tax systems that the states use? I ask since Oregon and 5 other states don't have sales tax, so what, if any affect would this have on them? -IkonicDeath —Preceding comment was added at 20:17, 16 April 2008 (UTC)

Talk pages are for discussing the article. You might want to direct your questions to http://www.fairtaxgroups.com, but here is something go get you started. Fiscal Federalism: The National FairTax and the States Morphh ^(talk) 15:10, 17 April 2008 (UTC)

Yeah, I know, I was just curious since there was nothing in the article about it, and if it was going to have noticeable affect I figured it should be in the article. -IkonicDeath —Preceding comment was added at 22:22, 17 April 2008 (UTC)

The article makes several statements regarding the states in this area - see the third, forth and fifth paragraph under "Tax compliance", third paragraph under "Underground Economy". One thing regarding those States that don't have sales taxes, they are not forced to collect the tax. It can be administered by the Fed or a neighboring state if they so choose. You may want to review Fair Tax Act: Chapter 4. State and Federal Cooperative Tax Administration, and here is the plain English version. Morphh ^(talk) 1:54, 18 April 2008 (UTC)

[edit] comments on intro section

Morphh,

I haven't looked at this article in a while, but reading over the intro section now, the language I think has gotten very good and balanced and referenced and NPOV. My compliments to you for your role in making it be as such. The one small objection I have though is singling out the AMT as something that would be replaced. I can see mentioning corporation taxes and capital gains taxes because many people might not be familiar with the fact that they are also considered income taxes. I do not think there is much lack of familiarity about the AMT being part of income taxes though. If you are going to mention it, why not also mention that income taxes include dividend taxes, interest taxes, taxes on tips, etc.

Otherwise, though, it looks quite, quite good.

Cheers, HalfDome (talk) 08:15, 6 May 2008 (UTC)

Either way is fine with me, but I prefer to include it. There has been a lot of talk regarding the AMT, particularly for tax reform. Most tax reforms considered in congress focus on replacing the AMT. So for that reason, I thought it important to mention that it does replace the AMT, which some people think of as separate from the personal income tax they know. I also often think of the personal income tax and the AMT as two separate things. However, I certainly concede the point that it is part of the same income tax code. I only see that it clarifies what it replaces but it doesn't really bother me if it is removed - I can live without it. Morphh ^(talk) 16:36, 06 May 2008 (UTC)

[edit] FairTax name

I don't believe this sentence needs a source: "Since the term "fair" is subjective, the name of the plan has been criticized as deceptive marketing by some while being touted as true to its name by others.". It seems to be common sense that some critics would disagree with the "fair" label and proponents would consider it true. Is this anything disputed...? we don't need a source for every statement, if it is nothing that is questionable. I rather just remove the sentence than include a questionable source to substantiate it. Morphh ^(talk) 23:42, 12 May 2008 (UTC)