Personally, I think
we need to cease all transfers
from non-citizens to citizens
from from existing citizens to recently naturalized citizens
Those groups need to be clearly self-funding.

Furthermore, the transfers to the least wealthy citizens really should come not from the strapped middle class, but from the Americans making the biggest gains the last 30 years-and likely to make the biggest gains if something like fairtax is introduced(i.e. those families with more than $1-5 Million in assets).

There is a LOT to be said for eliminating payroll withholding requirements-and the overhead of income tax collection. Milton Friedman was ashamed he played a role in their creation(it was one of his first jobs as a young man). The question is how do we do this without huge trickle up effects like we have seen the last 30 years?

Since they made a movie, it must be true the FT will solve all our economic worries, give everyone a high-paying job with fewer hours, free medical,retire at 50, etc., etc., etc. and the 1% will pay ALL the taxes AND give us a PREBATE, to boot. Where do I sign up — NOT.

Have you FT supporters no shame?

We cannot begin any discussion of “fairness” without each person’s definition.

What is your definition of “fairness” in 1) funding future annual budgets and 2) cleaning up current debt (both on and off the books).

I’m at the tail end of the baby-boom. Since the early 80′s, I’ve been over-paying for social security and Medicare, thanks to the “reform” that Reagan and the then-Congress put into place then. In other words, I’ve been both paying for Hank’s retirmement benefits AND paying into the so-called trust fund, which, of course, has been raided by every administration since it was first created. In addition, I’ve had to pay for my own health insurance (premiiums for which are much higher today than during Hank’s working years) as well as fund my own retirement, since there’s no longer any pensions (unless you work for the government).

So, I would be doubly-upset under the FairTax where I would have to continue paying taxes after I retired even if I was living off the assets I’d accumulated and paid taxes on during my working years. However, in reality, I wouldn’t be paying those taxes becasue I’d simply move to Thailand or Costa Rica after I retired and let Morph and his fellow FairTax lemmings pay for my Social Security and Medicare benefits through the enormous tax rates that would be required under the FairTax. And, alas, he wouldn’t have any money left over to fund his own retirement, and, by the time he needed to retire, Social Security and Medicare will definitely be broke.

So, for Morph’s sake, tt’s a good thing there’s no chance that the FairTax will ever pass! (Of course, the current Republican proposals are almost as bad, but that’s for another blog.)

Cheers!

In fact, I’d be fine with your FairTax lite or Hayden’s plan – a hybrid approach would be fine with me (income/sales or income/vat), if… if we were able to pass a constitutional amendment that caped tax revenue to GDP (with limited flexibility in times of war when constitutionally declared by congress). That would greatly reduce my fear of two increasing tax streams like we’ve seen overseas. As you said, 18% of GDP would work. Given this, I think a very economically efficient tax could be created that offers a low amount of risk, tax shift, and evasion. Such a tax cap would probably be passed more easily that eliminating the 16th Amendment. Cut, Cap, Balance!

Peace!

During my work career, my wife and I paid at a 50% marginal tax rate. Have you ever paid at anything like that rate? In constant year dollars, I still haven’t collected as much as I paid in to the SS Trust Funds, even at age 79. And I paid for your education with my property taxes, and am still paying for your kids education. I’m not bothered at all that you are paying something for my support in my declining years with your FICA contributions. Fair is fair!

My study on middle class retirees assumed that middle class meant $30,000 to $100,000 spendable income from SS, pensions, and accumulated wealth/investments. In all cases assuming average SS payments, both single and married retired seniors paid less federal tax than would be the case under the Fairtax, even if only 75% of their gross was spent on new goods and all services. Check it out!

One thing we are in violent agreement about is that the problem facing everyone today is an out of control federal government that is spending a trillion or so more than they take in. I’m all for fixing the federal budget at 18% of GDP and taxing everyone a little something. The Fairtax doesn’t do that.

Chjeers!

Also, you didn’t show “ALL”. The middle class retirees are a large bracket and there are many factors based on age / income / savings / investment. You showed what has been shown before in Kotlikoff’s research (albeit in a limited and selected way) – the FairTax taxes wealth, which middle class retirees hold the majority of. So many would see an increase as they often pay extremely low taxes on spendable income compared with their working middle class counterparts due to prior taxation (savings) and low tax investments.

So, do I believe it is fair to increase the share of taxes on seniors to pay for their under-funded entitlements, instead of passing the massive bill onto their children and grandchildren? Yes I do. Problem is, seniors believe they’ve paid for it, when they haven’t really (it’s been raided). They’ve been lied to by the shop keeper (or are in ignorant bliss), who took the balance and put it on Jr’s bill. So if someone takes something that’s half paid for, who’s the thief in the exchange? Grandma walks out of the store with her hands full (is that Medicare D in her basket) and Jr. is left paying the other half of the bill, plus his goods, with a pat on his 8yr old daughter’s shoulder to pay for the truckload in the back. Hold up Grandma, you need to pay the rest of your bill – don’t leave your kids this massive debt. Fiscal child abuse as Kotlikoff calls it. It is a proven generational shift in wealth, so forgive if I don’t consider that fair.

Personally, I think we need to reduce the spending. I’d rather see Grandma accept that she hasn’t paid for all the goods she was given (promised) – and honorably put some back as not to burden her children. Otherwise, as I stated, I think they should have to pay more. As Paul Ryan states, we should leave the next generation better of, not worse. Of course, neither situation will likely happen with our political will – who would touch poor old Granny. She’ll unwittingly stick it to her kids and cry foul if anyone suggests otherwise. Such is the nature of entitlements and government dependency.

Anyway, again – my point was about “proving” fairness, not that my view or your view is fair. We could debate for days about what is fair. As for getting someone back to work by changing tax policy, surely you don’t believe we have an efficient system that reduces economic disturbance in the market and rewards investment and work? Whether the FairTax is the best solution for that, you know there are numerous ways that the tax code, even a revenue neutral one, can effect economic growth. Mr Gorby… guess they were going for monumental changes that effect the course of history. I agree that’s a far stretch, even if all their estimates hold true.