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[sjt18]

1. Do you think it has a realistic shot at passing if Cain is elected?

Not at once and not in that exact form. But if he has a GOP Congress to work with it provides a framework.

2. Honest opinion on its fiscal impact?

Coupled with some regulatory restraint (aka common sense) it is a formula for growth.

I think it can be too easily sold as a regressive tax to pass, only way it has a shot IMO is if a huge majority is won in both houses by the Republicans.

The income tax rate would have to increase with a high standard deduction.

Unless major cuts are made I'm not so sure it will have a positive impact on the current fiscal disaster. However, I think it would be good for the economy.

You will see leftists handwringing every time it is brought up... but supply side tax policies have ALWAYS increased federal revenues significantly. Taxing higher economic activity and profits at a lower rate makes sense for the same reason supply/demand equillibriums work to set the optimum price for a product.

 

[sjt18]

No, but I am familiar with the arguments.

Honestly, I think the problem for all of these fair/flat tax proposals is that there is no getting around the fact that they would all increase the tax burden on middle and lower income families while decreasing taxes on the wealthiest.

If you actually believe that either would do so more than the current system then you are more naive than I thought.

The "rich" do not pay taxes. They collect them. Corporations for certain do not pay taxes. Their taxes are included in the price of whatever they sell.

IF or when gov't actually raises taxes in a way that the rich cannot pass the expense on to the consumer... the cost will come out somewhere else. The biggest and easiest targets for cutting cost are wages and benefits.

The Fair Tax would be ideal. It gives a prebate for necessities. Currently it would amount to around $400 per family of four per month. Afterwards, the tax would only apply to new goods or services. It would not apply to used cars or even existing homes. The environmentalist in you should absolutely love that.

A flat tax could work with a high standard deduction so that people at the lower end of the income spectrum would still pay nothing... except then they would REALLY pay nothing. Without deductions, the ability of corporations to avoid paying taxes will be limited.

At a time when there is a growing resentment towards the investment class, if you will, the claim by politicians that any such plan will overall be good for the lower and middle classes because it will spur investment and growth is going to be looked upon with almost insurmountable skepticism.

I doubt that... they'd only do that if they thought what we have now was working for them.