Re: [MLUG - DISCUSSION] Flat Tax

[Mike Miller <EMAIL:PROTECTED>]

On Thu, 4 Jan 2007, Christian M. Cepel wrote:

> Just a general reply to your mention of cars and homes, but reality is 
> of the kind outlined in the fair-tax book, than none of those prices 
> would increase at all.  There's reasons why it pretty much balances 
> out...  It is also suggested that we will see a boom in US production 
> and a much better and more stable economy.

Well, if everything will be better and nothing will be worse, then of 
course we should do it.  It sounds more like a sales talk than an 
informative book.


> I've read the book and don't recall seeing 40% anywhere.

Right.  That's because they are selling a plan.  It's a beautiful and 
perfect plan that will solve all of our problems for only 23%.  The 40% 
was found in the critical review in the NY Times sent by Jon King:

http://www.nytimes.com/2005/11/13/books/review/13slemrod.html?ei=5088&en=adb65ce66e79b77f&ex=1289538000&partner=rssnyt&emc=rss&pagewanted=print

   In order to fully replace all federal taxes, the sales tax would
   probably have to be at least 40 percent - possibly even more than twice
   the 23 percent rate the authors claim, and certainly far higher than
   anything ever levied by any country.

And:

   For a book that claims in its introduction to be "about honesty," this
   statement falls far short. No reputable economist of any political
   stripe would support it. The honest truth is that replacing the current
   tax system with any system that raises the same amount of revenue (as
   Boortz and Linder claim their plan does) may make us better off, but
   only by redirecting our resources away from dealing with complex filing
   requirements and improving our incentives to work, save and innovate -
   not by creating the kind of free-lunch miracle suggested here.

The author of that review (Joel Slemrod) is a professor of economics at 
the University of Michigan.  I prefer to believe what he says rather than 
read the Boortz/Linder book because I have the impression that they are 
full of crap.

I have to wonder why anyone would read their book.  Did someone tell you 
that you should read it?  Tax law and its effects aren't the sorts of 
things any of us (on this list) can readily evaluate given the complexity 
of the problems.  You really have to be a pretty highly-trained economist 
to have a clue.  It is wise to always be skeptical.  I prefer to read 
several expert opinions than to read the sales brochure.

Mike

_______________________________________________
discussion mailing list
EMAIL:PROTECTED
http://mlug.missouri.edu/mailman/listinfo/discussion