Talk:Distribution of the FairTax burden

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neutrality[edit]

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)[reply]


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)[reply]

Tables of average remaining lifetime tax rate[edit]

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)[reply]

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)

"Tax rate and rebate" section linked graph incorrect[edit]

The graph "Effective tax rate comparison graph" is incorrect-- data from CBO verifies this, the "current tax effective tax rate" line is clearly wrong and too high in some places and too low in others-- see http://www.cbo.gov/publications/collections/tax/2010/average_rates.pdf and http://en.wikipedia.org/wiki/Household_income_in_the_United_States

Also, the green line is likely too low, as research from fairtax.org shows that those making from $15,000 to $150,000 would likely pay more under the Fair Tax than under the current system -- "Not every household would benefit equally, however. Households in the lowest income band, with an adjusted gross income (AGI) of less than $10,000 annually, would benefit because they BHI CGE Model 32 The Economic Effects of the FairTax would receive the prebate that would more than offset any higher cost of purchasing goods. Households in the top income category, with more than $150,000 in annual income, would also gain as they do not have to pay their highest marginal tax rates. Mid-income category households would lose because the FairTax would impose a relatively higher tax rate on them." (source: http://www.fairtax.org/PDF/TheEconomicEffectsoftheFairTax-ResultsfromBHI.pdf page 31-32

And on second-look it seems the graph really serves no purpose here, as it is a cherrypicked subgroup ("married with two children"-- which makes the blue graph line levels even more dubious),rather than an average of all groups across the incomes listed on the graph. A better graph to truly cpmpare effective tax rates would be one which uses CBO numbers (which include all taxpayers in each income level) across the graph rather than a subgroup. — Preceding unsigned comment added by 68.59.185.53 (talk) 17:23, 23 November 2011 (UTC)[reply]

The graph is from a site which is supporting the tax, and is thus likely politically biased and dubious. — Preceding unsigned comment added by 68.59.185.53 (talk) 17:01, 23 November 2011 (UTC)[reply]

Neutrality (2012)[edit]

I removed the graph highlighted above as being inaccurate and misleading. Overall the article is well written and reasonably balanced

However,

I recommend removing the "Current system vs. the FairTax" section on the basis that it places undue weight on a particular viewpoint and gives an inaccurate impression to the reader: i) data shows every example household to be have a lower tax burden on a theoretically "revenue neutral" tax. That's evidence either of selective presentation or an extraordinary claim requiring extraordinary evidence or a critical presentation. ii) data is from a working paper from one of the leading advocates of the source which is already referenced in the text anyway. Presenting it uncritically is given undue weight in an area where projections are disputed. iii) The data does not reflect the "current" system as the tax codes have changed since the study. For now I have altered the intro to slightly clarify the limitations to the data as is.

There is a graphic from the FairTax foundation referring to a "tax concentration coefficient" - related to the Gini coefficient but methodology not stated. Copies of Wikipedia and the original FairTax article are the only online sources using this term in this way. It appears to be a component of a couple of more widely accepted indices of tax progressivity; presenting FairTax.org's apparently novel use appears POV I propose removal, as happened with a similar graph formerly on the Taxation in the United States page. — Preceding unsigned comment added by Dtellett (talk • contribs) 21:53, 12 January 2012 (UTC)[reply]

Reasonable argument - I'm fine with that. Morphh (talk) 14:05, 13 January 2012 (UTC)[reply]

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