Friday, November 04, 2005

ABH Roundup

Round 'em up move 'em out. News and analysis right here, kids.

Barrow:

ABH letter writer drinks the Fair Tax Kool-Aid. My book is more credible than Barrow's study, sez he. Also from our Kool-Aid drinking friend, "Having read 'The FairTax Book,' it wasn't difficult for me to nail Barrow on each of his points."
Really? We thought Barrow's points, as you enumerated them in your letter were pretty sound. We notice that you didn't choose to publish your rebuttals to them.
Whatever. We tend to disagree with Barrow about as often as we agree with him, but this time he's right. The Fair Tax is anything but fair.

We're in the Money:

Athens rakes in a cool mil from the Agriculture Appropriations Bill. We're usually pretty loath to praise the GOP around here, but we call 'em as we see 'em, and Isakson and Doucheb-....err...Chambliss did well in bringing home the porky goodness.

Rumor has it:

That we might have a candidate running against Norwood soon. We know who it is, but we ain't telling, because they haven't decided.

Reality has it:

That Doug McKillip is going to get some primary challenge from one Dan Maxey. Details are still forthcoming, but apparently Mr. Maxey is fairly seasoned in the political arena, and is a retired Methodist minister.

8 comments:

Fishplate said...

OK, I'll try... I asked Mr. Barrow the same question during the election, and got an answer that clearly showed he had no idea what the Fair Tax Plan involved. He tried to tell me that it was a tax ~in addition~ to the income taxes we already pay. He may have learned something between then and now, but he's a very busy man...doesn't lok like he's had time to study.

"Barrow contended that the amount of taxes embedded in consumer goods is less than 23 percent, saying he'd seen studies showing a lower percentage, and the FairTax would, therefore, be bad for working families. I'd like to see those studies."

No studies were cited by Mr. Barrow, only his recollection. Is his memory better than Tim Russert and Scooter Libby? I dunno, but the rebuttal is easily available at FairTax.org, and I don't need to repeat it here.

"Barrow also said he didn't believe corporations would reduce prices to compensate for a national sales tax, which would also be bad for working families."

If I can knock my price down 5%, and my competitor won't, how do you think that will affect my sales? The incentive to reduce prices (by the amount the producer used to spend keeping tax records) is built in to the program.

Beside that, how is the current system ~good~ for working families? Even if prices remained exactly the same, the Fair Tax Plan would reduce the paperwork burden on working families. Is that a bad thing? How would you rather spend a fine spring day, playing ball with your kids, or filling out a pile of IRS forms?

"And, Barrow added that the poorest of the poor don't pay taxes anyway, so why add a tax to them?"

In fact, the statistics of who actually pays taxes by income bracket are interesting. Laying that aside, the poor pay SSI and Medicare taxes, and the Fair Tax Plan would eliminate the need to pay even those taxes, up to the poverty income level. I'm sure you will recall the recent comment that 26.8% of people in Clarke County live below the poverty level. Thus, the Fair Tax Plan will ~reduce~ taxes on ~at least~ 26.8% of the population by eliminating their need to pay even SSI and Medicare taxes.

Reducing the tax burden on a quarter of your constituents should help your legacy...right, Mr. Barrow?

Fishplate said...

DDDY, you need to study the tax. ~Everything you question is addressed, and to a certain degree guaranteed (as much as anything the Goverment does can be guaranteed). Read my post above: We are talking about a consumption tax, not really a sales tax. The tax is built in to the price of goods. Taxes are ~eliminated~ up to the poverty level, via a monthly prebate. Taxes will be ~decreased~ on the lower-income groups - 26.8% of the people in A-CC will take home ~more~ money, and be allowed to keep it. The only debate is the size of the tax - 23% is what is suggested as revenue-neutral. Government income will ~not~ be reduced. No current program will suffer as a result of implementing this plan. The savings to taxpayers is in the reduction of the time, trouble and bureaucracy needed to make sure you have satisfied or eluded all the requirements included in the 10,000 pages of the current tax code.

So many folks have done as Mr. Barrow has done - they get an idea of what they ~think~ is included, and then debate those points, instead of what actually ~is~ included.

Furthermore, I think I know what you are saying when you write "The party line for me I suppose is to oppose it" but it makes you sound as if you can't think for yourself. We all know better than that, so I suggest you take a look at what is actually proposed, then we can have a nice rational discussion on the facts.

Cufflink Carl said...

In all fairness to the Fair Tax advocates, most versions of the Fair Tax Bill, most notably John Linder's, which was introduced as H.R. 25 last year. (Could have been H.B. 25, so don't jump my shizzle over that) did include some form of rebates for "necessities" like food, etc. Most versions also include an exemption (or significant reduction) for used goods, like if you bought a used car.

Don't interpret this to mean that I'm a fair tax supporter. I oppose it for many of the reasons my cohort laid out. And, call me biased, call me partisan, but I have to consider the source as well. The GOP does not have a good record on fiscal policy for working families, and that's a major factor in my opposition.

Here's another thing that my co-editor didn't mention. If some permutation of the Fair Tax bill is passed, you will put a large and significant sector of the economy out of work almost immediately. It's cool to hate on the IRS as an institution, but don't forget that that institution has tens if not hundreds of thousands of employees that are going to be looking for work if this were to pass. In addition to that, don't forget the thousands and thousands of people who work in the income tax preparation industry. Altogether (and I'll try to get my shizzle together and check some numbers on this in the next day or two) we could be talking about over a million folks losing their jobs. Just something to think about.

Now, let me kick it economics style and address one other thing. Here's the quote: "If I can knock my price down 5%, and my competitor won't, how do you think that will affect my sales?"

Yes and no. It isn't as cut and dried as you make it sound. (As we all know, economics rarely is.) You've got to account for another factor, which is market elasticity, or specifically, elasticity of demand. A price to quantity demanded ratio (as viewed on a demand curve) is going to be at one of three places. It will either be price-elastic (meaning that the market is highly responsive to changes in price), price-inelastic (meaning that the market is significantly less responsive to changes in price), or unit-elastic, which I'll get to in a second if talking about price elasticity doesn't put me to sleep.
The other side of elasticity, beyond a measure of responsiveness, is an indicator (but not an exact science, by any means; much of economics isn't) of the effect of raising/lowering prices ona particular good or service. Generally speaking, a good or service that is at a price-elastic point on a demand curve will, as Fishplate suggests, earn more profit from a price reduction. However, if a good or service is price-inelastic, cutting prices will decrease revenue. (As I promised before, here's the scoop on unit elasticity: if a good/service is unit-elastic, then the quantity demanded exactly offsets the price change.)
There are various determinants of demand that also affect elasticity by extension, for instance, time, market expectations, etc, but we'll avoid getting into that right now.
I say all of that to say this. Price cuts don't always produce more revenue through increased demand. And I would also note that I'm not an economist, although sometimes, late at night, I do put on my Fisher-Price Alan Greenspan costume and dream, dream, dream...

Cufflink Carl said...

Oh, I forgot to mention...

If Barrow thought that the Fair Tax was an addition on top on income tax, perhaps he should have spent less time in 2004 raising money and more time researching the issues beyond his DCCC-issued talking points.

Oh wait, I forgot. Issues don't matter.

Anonymous said...

Dan Maxey has decided not to run. Now stay tuned for information on one Ron Dix, former State Rep from Lilburn, who was redistricted out. He's a recent convert to the democratic party, and has (according to rumour) moved here to prepare for a run in the 115th.
Repeat, Dan Maxey is NOT running, ignore those invitations to the kick off he's no longer holding on the 13th of November. He has family issues that are a priority right now, and will be around in a couple of years to see how whoever we elect is doing.. and maybe he'll run then.

aquariusrizing

Fishplate said...

OK, I'm confused now...I said we knew you better than that. Fault me for trying to read on a Friday of a particularly trying week. I see now what you meant...still, I don't understand why you need to weigh in, knowing you haven't read what's on the table.

When you say "party line", and then modify "party" with "Democrat/liberal/progressive/whatever-label-you-like-best", I think you assume too much. I don't know anyone here well enough to compartmentalize them...no matter how large you make the compartment.

As for Friday, maybe that's the party line...drink all weekend, then take a few days next week to recover. See ya then... ~g~

Cufflink Carl said...

Interesting point, actually. I'd never thought of that. I would point out that most of the people (I'm one of them) who oppose the Patriot Act don't oppose the whole thing, except to the extent that a few bad apples have spoiled the whole barrel. I agree with that, and I do oppose the Patriot Act en toto because some of the provisions are just so bad.

In response, I'd point out that while it is legally the government's business to find out how much I made (so that they can do their Constitutionally mandated job of raising revenue through an income tax), I don't think the government should have any interest in what books I read, what legal goods and services I purchase, or my medical records.

Now, I hate to sound like a broken record, but the Patriot Act really isn't comparable to the 16th amendment. While the 16th amendment may raise some privacy issues (for the record, I don't believe it does, and I imagine that assertion has been tested in the courts before), the Patriot Act raises both major privacy issues and first amendment issues.

Good point though, and one I haven't heard from the Fair Tax folks before. I'll end with a question. If we passed Fair Tax, would you be willing to kiss the Patriot Act goodbye?

Fishplate said...

As far as there are any provisions in the Patriot Act for investigations into private matters without the permission of the Courts, you can throw all that out in a heartbeat - we don't need that. Why do you need to know, if you can't convince a tame judge of your need?

For the record, I think it's unfair to lump any radical tax reform proposal (and there are several) in with any other one and comment on "what it and similar proposals entail" - and that's just one of my [many] buttons that seem to get pushed - I'll not apologise for that.

I'm ready to talk about specifics, and you're still on generalites that, in this case, aren't germaine. I did my best to address those, but let me assure you that this proposal, while it may not be the best, has the longest legs so far, having received a place at the legislative table. It's gotten the debate started on a more serious level, the President's Comission on Idiotic Band-Aids notwithstanding (except perhaps as an illustrative counterpoint), and so I feel it's time we talk about specific shortcomings and merits rather than generalities. I know that's what you were trying to address, but the things you mentioned simply don't exist in this proposal.

And for the record, I'm most emphatically ~not~ a Republican. In fact, the last time I had to state a preference, I registered as a National Surrealist.