FairTaxBlog - A broader scope?
As you may have noticed, many of the recent discussion points have not been directly about the FairTax. Over the years, this group has discussed the plan in more depth than any group I’ve been apart of. We’ve blogged the entire bill, discussed the most relevant news, and debated probably every study released. As we move forward, it seems we end up rehashing many of the same debating points, which may lead to stale discourse. We want to keep the blog interesting and active. So, would you enjoy a broader scope of discussion? While we would continue to give FairTax developments top placement, would you be interested in discussing other tax reform plans as part of a comparison to the FairTax? (Topics such as the Automated payment transaction tax, Competitive Tax Plan, Efficient Taxation of Income, Real Property Use Tax, Taxpayer Choice Act, Freedom Flat Tax, etc). Should we try to cover more topics regrading plans offered by presidential nominees and studies regarding the failure of the current tax system? On the other side, we don’t want to become too broad and lose focused readers. We look forward to hearing your thoughts.
Personally, I think that’s a very good idea. I, and probably others on this board, are not as familiar with some of the other tax plans as we probably should be, and I think it would be good to discuss some of their pros and cons, particualrly in relation to the FairTax.
I suppose the Flat Tax should come first, simplly because that is probably most similar to the FairTax in concept and has a lot of research behind it (though, I admit, I’ve read very little.)
Alternatively, a VAT could be discussed, since that is also a consumption-based tax that is commonly used in Europe.
Morphh,
Good idea, but I would suggest that the baseline for discussion should be the current income tax, not the Fairtax. It’s disturbing to me to read inputs from Fairtax advocates which simply demagogue the income tax. Even your own bias shows up in your proposal to study the “failure of the current system”.
What failure are you talking about? For 95 years, the income tax has managed to successfully fund the federal government. The tax code has also been used to promote good social behavior, although I’m aware that many readers object to government social engineering? Some of the alternative proposals are simply changes to the current tax code, so it seems to me we all need to better understand current law?
I also would suggest that anyone who wants to participate first read the Slemrod/Bakija book entitled “Taxing Ourselves”. All you ever wanted to know about the various alternative tax proposals, written in plain english with no bias. (They don’t offer a plan of their own, just the facts about other proposals.) (And the Fairtax doesn’t fare all that well?)
Hank, I think we need to say true to the nature of the blog, which is tax reform and I don’t think posting topics that priase the current system would be in our readers interests, but perhaps I’m wrong. That’s why I suggested areas of failure, since it allows us to expand on reform “solutions”. You can certainly argue that such may not be a failure, which would be fine for the discussion. I also don’t think it being “sucessful” for 95 years removes the ability of failure with a changing world and global economy. What worked then may not work as well now.
I think broadening the the scope of this blog is an excellent idea. I’ve learned more about the fairtax from this blog than any other source. I’d love to learn about alternative tax plans (or even more).
Hank,
There aren’t many resonable tax proposals that wouldn’t successfully fund the government. Unfortunately, this is common criteria for government success. The government has a tax and revenue comes in, therefore, this policy is successful. The same reasoning is applied to social security. The government takes in money from current workers and gives it to retirees; therefore, this policy is successful. The negative consequences of the actions should also be taken into account when determining success. Let me ask you if this is also true if the government wanted to feed a poor family: The government spends $1 T and a poor family is fed; therefore, the policy is successful.
“tax code has also been used to promote good social behavior”. Constitutionally speaking, has this ever been a duty of the federal government?
I echo Hank’s recommendation of “Taxing Ourselves.” I’d also recommend “Perfectly Legal” by David Cay Johnston for those of us who like to bash the current tax system and the influence of lobbyiests.
To follow up with Morph’s suggestion of discussion of “the failures of our current system,” I think that’s a good idea. Many FairTax proponents throw out the FairTax as the sole, viable alternative to the problems with our current tax system, whereas if you look at the problems in isolation, you might see that there are perfectly viable solutions that are less drastic than abolishing our current system.
Andrew,
The Constitution was “ordained and established” in order to “promote the general Welfare”, among other goals that can be found in the Preamble. I would suggest that much of what the federal government does is done under the auspices of this wording, for better or worse depending on your point of view?
A second recommendation for “Taxing Ourselves: A Citizen’s Guide to the Debate over Taxes.” Be sure to get the fourth edition (they release a new edition every election year).
To Hanks comment, I’m one that thinks the case Helvering v. Davis (1937) was an improper ruling based on my understanding of our founders intentions. I think “promoting the general welfare” was a condition in the consitution for the function of the federal government, not an additional role of the government. Meaning, I think it was meant to prevent the government from promoting the welfare of a particular group. The roles defined by the consitution for the federal government were to promote the general welfare, not that a role of the government was to promote the general welfare. But anyway... that’s just my view.. which of course is now moot and irrelavant. The U.S. Supreme Court thought otherwise by vote of 7 to 2.
Hank,
I agree that much of what the federal government does is based on the “general welfare clause”, I just think this is a gross misinterpretation of the constitution. The majority of these misinterpretations does seem to stem from the 30’s when the court seemed to have a change of heart (many speculate because of Roosevelt’s court packing scheme). It’s all part of the progressive’s “living document” view of the constitution.
The general welfare referred to in the preamble is much more a limiting clause than it is an expansive one. Why? Because if it’s that expansive, why even have enumerated powers. While our founders were trying allocate more power to the federal government than what the Articles of Confederation allowed, they were still trying to set real limits to that power. James Madison said it best in Federalist #41: “For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power?”
Unfortunately, progressive judges give as much respect to the founders when interpreting the constitution as they do to the Bible.
A little light reading:
An Updated Analysis of the 2008 Presidential Candidates’ Tax Plans (pdf) (revised July 23, 2008) from the Tax Policy Center.
Enjoy.
Helena,
This is all well and good, but reads as agenda-driven in Obama’s favor. Not that I care much. But I also notice that they seem to have subscribed wholeheartedly to the notion that any tax cut necessitates a reduction in Federal revenue, a notion that has been disputed and, to my knowledge, refuted here before. Any policy analysis which starts with, at best, obtuse and, at worst, false premises must be treated as suspect.
Thanks for the link, though. Interesting read, nonetheless.
Bradley –
I am trying to find evidence as to whether tax cuts in fact increase tax revenue or decrease tax revenue. Can you (or anyone else) cite me to any hard data on that.
I particular, it seems that some government website somewhere would have a chart showing tax revenue over time, and, hopefully, the rate of growth in tax revenue.
So, for example, if the data showed tht tax revenue increased by an average of 5% per year in the 80s, but only 4% in the 70s that would be evidence that the tax cuts of the Reagan years increased tax revenue. If the data showed the opposite, that would be evidence that those tax cuts decreased revenue to the governement.
I am pretty certain that most of the highly touted tax cuts over the last 30 years led to a decrease in revenue to the government, but I would like to see the data for myself and am certainly willing to be pursuaded otherwise. (in otherwords, I would love to have a rational basis for believing that if my taxes were reduced the government would get more money.)
Hayden,
Here, http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf, is link to historical numbers for the revenue side. Table 1.3 shows the revenue in 2000 dollars (so inflation is removed).
Their was a tax cut in 2001, but revenue declined until 2003 when there was another, larger tax cut. Then revenue started increasing. There was also a tax cut in 96. Revenue must have increased because I know during that time period the economy grew about 30% faster than the preceding four year period (which followed a tax increase). While the economy grew faster during the end of the 90’s, the percentage of revenue as GDP also grew. So at least judging by the tax increase of 93 and tax cut of 96, there is some correlation between higher revenue and lower tax rates. Of course, I’ll admit that at least some of this growth has to do with the market “shock” of being restricted by tax law, and then subsequently being unrestricted. China isn’t one of the fastest growing economies because of their communism. They are because they were previously more communist.
Hayden, it’s pretty much a consensus among economists that none of the tax cuts in the last few decades have paid for themselves. If you search Google for “do tax cuts pay for themselves” you’ll get a good sampling. Including this summary from The Center on Budget and Policy Priorities and this study by Greg Mankiw they find that “in the long run, about 17 percent of a cut in labor taxes is recouped through higher economic growth. The comparable figure for a cut in capital taxes is about 50 percent.”
I think the tax plans of the presidential candidates should be discussed more. Also, posts about VAT would do good. Thanks for the link, Helena.
My reading and understanding of the Fair Tax results in my hoping it will become our taxing structure both federal and state. The bigger problem is how to control what is now the unbrideld spending of our Congress. In this regard, we need to establish a reporting system of our government’s spending simple, accurate, understandable and available to even the “Great Unwashed” who believe any plan they hear that says they will benefit from it...true or false. If this were possible , the Fair Tax would be an overwhelming choice.
Any and all tax reform must include elimination of AMT.
Submitted by Brenan Hofstadter
I think broadening the scope of this blog is a bad idea. The proposal has merit, but if you want a blog with an expanded scope then start a new blog with that objective.
My rationale is this: The FairTax is a grassroots initiative with an ever increasing number of inquirers, proponents and detractors - lots of people with a need to grapple with and understand the basics and to a lesser extent the complexities of the FairTax. I like to think your blog was set up to provide that service. If you expand the scope you will dilute the blog’s value to the critical grassroots portion of your readership. I would rather see you headline the salient points of the FairTax, and support discussions and archive information around each point.