Talk:Distribution of the FairTax burden

From Wikipedia, the free encyclopedia

This article is within the scope of WikiProject Taxation, an effort to create, expand, organize, and improve tax-related articles to a feature-quality standard.
Assessment ratings and other indicators given below are used by the Project in prioritizing and managing its workload.
Start This article has been rated as Start-Class on the Project's quality scale.
Low This article has been rated as Low-priority on the Project's priority scale.
After rating the article, please provide a short summary on the article's comments page to explain your ratings and/or identify the strengths and weaknesses.
To-do list for Distribution of the FairTax burden: edit · history · watch · refresh

[edit] neutrality

I think the neutrality warning is overblown. How the burden will be distributed is a question that can be addressed independently and neutrally, and simply asking and answering from an NPOV does not compromise neutrality. I'm going to remove the warning. Night Gyr (talk/Oy) 12:05, 8 December 2006 (UTC)


I don't know where to add this comment, but here it goes the table on this page which claims to be the gini coefficient is not. it is a tax concentration coefficient and the cited page will verify this. this should be changed as it is factually incorrect. the gini coefficient is either .48 or .53 depending on whether it is based on income or consumption. —Preceding unsigned comment added by 71.57.148.64 (talk • contribs)

Indeed - They changed it... I'll correct. Morphh (talk) 1:30, 08 August 2007 (UTC)

I reviewed after the recent addition of a NPOV tag. Made some small copyedits on things. Problem with this subject is that opponents have not done a study on the tax distribution of the FairTax, while proponents have done several. The only study opponents offer is the Tax Panel, which is not a study of the FairTax. We've included it anyway.. just disclaiming that it was very different with regard to tax replacement (since it excluded all the regressive taxes replaced under the FairTax - which makes up half the tax base). I don't see that anything is missing. Morphh (talk) 1:01, 04 September 2007 (UTC)

I left a message on John's usertalk. One study that is missing is the recent one done by Beacon Hill Institute: A Distributional Analysis of Adopting the FairTax: A Comparison of the Current Tax System and the Fair Tax Plan. I don't think this is a POV issue, we just haven't gotten around to including it. It's on the todo. I think it is probably pro-FairTax anyway, which I feel that John's issue is that the section does not present enough criticism (although he has not said what his thoughts are on it). A Comparison of the FairTax Base and Rate with Other Tax Reform Proposals might also have some useful information to include. Morphh (talk) 13:45, 13 September 2007 (UTC)

[edit] Tables of average remaining lifetime tax rate

These seem easy to misinterpret. Under the assumptions (that are described in the paper, but not in the Wikipedia article), every household pays less tax with the FairTax than they would under current law, while their incomes in the two systems remain the same. If the FairTax is revenue-neutral, then either the tax burden is getting shifted to households that are much richer than anyone in the table, or "average remaining lifetime tax rate" means something a bit subtle.

It's the second case. I'm not sure that I completely understand what he did, though, since he used a computer program (ESPlanner) that seems very complex, and I don't know how to go from his explanations to ESPlanner inputs. Any insight would be appreciated. 74.61.11.168 (talk) 21:34, 6 January 2008 (UTC)

I don't think income will remain the same under both, but that's just my opinion. I think people will recieve their gross income and prices would rise. Some costs would be driven out by the removal the corporate income tax and employer half of payroll taxes, and a reduction in compliance costs. The change is with regard to purchasing power. The tax would have a broader base ($9.355 trillion compared to $7.033 trillion of taxable income). Kotlikoff states that the FairTax gets an huge amount of its revenue by taxing wealth, while others state it is from taxing the middle class. I would say that average remaining lifetime tax rates could mean something a little different. People tend to change their income levels over their lifetime (usually starts off low, then grows throughout the working years, then low again during retirement) - income can change for any particular year if you look at it in a limited cross-section time frame. So this looks at average lifetime tax rates. Income is more volatile than expenditure - we try to maintain our spending even if our income takes a temporary hit. This is why many economists think that expenditure comes closer to reflecting "permanent" income. I'd suggest you e-mail Kotlikoff regarding his figures. Morphh (talk) 1:15, 07 January 2008 (UTC)