Comment Re:Yet another reason to enact the FairTax. (Score 1) 328
Maybe so, but the current system is much more prone to abuse. In any case, no system will be perfect, and the fairtax reduces copliance costs by a factor of 100, and also reduces the number of collection points significantly, allowing government to focus their enforcement efforts more efficiently.
2. The arguments that interest rates will fall by 0.25%, and that the costs of all retail goods and services will fall by 20-25% are really, really tenuous, at best, and they are integral into the supposedly neutral effects of the change.
I assume you have research to back up your statements?
Please refer to these documents for more information. Americans for Fair Taxation (creators of the FairTax) was founded as a research organization, and is supported by research from places such as Stanford, MIT and Harvard.
This public policy paper by the CATO Institute on a national sales tax specifically refers the the drop in interest rates. The revenue-neutrality refers only to the fact that the FairTax would raise no more or less revenue than the current system, while reducing compliance costs and broadening the tax base. This reduction in costs is where the savings comes in, hence the reduction in prices and interest rates.
3. The issue with new homes versus existing homes seems fishy, at best. The market doesn't work that way.
I one again refer you to the research on the effect to the housing market.
