Fairtax advocates think fairtax would be distributionally neutral. William Gale at brookings and I think it would NOT be distributionally neutral-and would further concentrate wealth/asssets due to trickle up effects in the existing economic structure.

What I have been publicly stating for years: I would support fairtax if there were an iron clad guarantee that if there were any further concentration of wealth/assets in the upper 1% or upper 5% that we’d gradually raise a tax on assets until that was no longer the case. If fairtax actually worked as advertised, fairtax supporters would get exactly what they are asking for. If not we’d wind up with a mix of an asset tax and fairtax.

Wharton published a study a while back on a flat tax and asset tax-and said it would be necessary to get about 25% of governent revenue from asset taxation for a flat tax to be distributionally neutral. My guess is the same holds for fairtax. We’d wind up with a 17% fairtax and the rest coming from assets taxation-just to replace the current system and not give the really wealthy a huge windfall.

I think a good argument can be made for reducing the fairtax rate further(or increasing the prebate) by adding a tax on pollution/carbon into the mix. Just complying with Kyoto would take another 5% off from the fairtax rate-and shift onto coal, oil, natural gas(and would make wind/nuclear/solar much more competitive instantly). We need something like this because current regulations are moving stuff like non-ferrous metal production from the US to Canada/Mexico.

http://www.the-lighthouse.net/left-right-disconnect-the-worse-kind-of-tax-much-better-alternative-wealth-tax/

“Make permanent, across-the-board 20 percent cut in marginal rates”

This coming from the guy that passed the largest tax increase in American history on the middle class called Obamacare.

To avoid getting misled by those screaming out against all “loopholes” one must study each claim specifically.

One may reduce CURRENT taxes – but will increase LATER taxes.

Some, like the Net Operating Loss are just the opposite of a “loophole”.

I would like to see a courageous, drastic simplification and flattening of the tax.

As to his specifics noted above, I thing reducing investment taxes ONLY on those earning below $200,000 demonstrates bad prionciples in that it memorializes Socialist class warfare.

While we all hate the AMT, ity does punish most the Liberals in NY & CA (it is driven substantially by high State Income Taxes and property taxes). In lieu thereof, I would eliminate AMT, but only if accomopanied by elimination the deductions for State Income taxes and property taxes.

As perhaps the only (retired) tax practitioner in the group, I offer first that I agree wholeheartedly with John Bailey. The coirporate tax should be repealed and the tax burden borne by individuals (who would experience offsetting price reductions).

Based upon my lifetime of experience, not only is the cost of filing tax returns, but even more so the cost of having to consider the tax effects of every business transaction, would release a tremendous amount of business resources.

I would toy with an “export” tax (to replace the IT-P/R taxes) of exporters.

IMHO, we need no other incentive nor consideration.

Once you put back in even a low rate, you need to have a great deal of compliance AND the need to consider tax effects of all transactions (which rises with the tax rate).

We can eliminate the corporate IT without a FT.

While there are many “loopholes” do not fall into the superficiality that everytrhing is a “loophole”. The popuilar current illustration os GE. When I read their explanation, I learned that a large “loophole” they employed was to use their tremendous “Net Operating Loss Carryforward” (notice that the LEFT calls this a “loophole” deceptively because they were focusing on “current” tax payments and ignored the entire world of “deferred” taxes wherein the tyax is postpones but forgiven permanenetly.

In the GE case, GE lost money the years befor and gotr little or no tax relief fopr those losses and is now carrying them forward – this is no “loophole” in facts it is the reverse. Under current tax law, GE paid taxes in the prior 100 (?) years, but lost money in say 2010. GE is currently allowed top carry that 2010 loss back ONLY to 20-2009 and then forward for the 20 years after 2010.
Why shouldn’t GE be able to acrry back its losses to recvover all of the taxes it paid in the the prior 100 years. Why is it able tio carry it losses forward for ONLY 20 years. Heads the Govt wins, tails the taxpayer losses.

I don’t think it’s possible to be below the Laffer curve, is it?

Actually, does it matter? In the end, the taxes are really paid by people, the corporations just pass it on to consumers (via higher prices) or employees (via lower wages) or investors (via lower returns).

The Laffer curve, as I am sure you are well aware, indicates that there is some marginal rate at which tax revenue collected is a maximum and that rates above that will reduce the revenue collected (100% marginal rate means no more additional revenue can be collected) and also that as rates fall below that optimal marginal rate revenue collected also is reduced all the way down to 0% marginal rate (again no additional revenue will be collected)

So at a rate of 0% no revenue will be collected…….from corporations which is what we want (isn’t it?). So it’s still actually on the Laffer curve…..just at the origin (regarding revenue collected from corporations).

Please elaborate just what you mean by a zero corporate tax rate being below the Laffer curve?