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Comment on Dan Dyer's "Fair Tax" Videos

June 1, 2008, Belovedcommunity.info, Comment on Dan Dyer's "Fair Tax" Videos, by Richard Hattwick.

My opinion that the Fair Tax issue could easily be used to distract attention from the bigger tax issue which is should be the focus of any and all fans of David Korten, et. al. The bigger tax issue is that of whether or not to raise the overall level of taxes in order to provide the social services and minimum acceptable standard of living which is implied by the vision of the Great Turning. Note that:

  1. Sweden, Germany, and France have shown that a modern economy can be operated with a much higher level of taxes and social safety nets than exists in the U.S. Universal health insurance is one example.
  2. One can argue that the result has been slower economic growth in those countries, because the U.S. puts a higher percentage of its resources into the private sector. But that turns out to be a complex argument. It can't be settled by simply pointing out the difference in GDP growth rates during, say, the last two decades.
  3. U.S. economic growth was faster when we had our highest income tax rates ( 1960s) than in subsequent decades.Again, this is a complex issue and can't be settled just by looking at per capita GDP growth rate numbers.
  4. But resources are still limited. There is a real danger of setting tax rates and public welfare expenditures too high. Sweden ran into this problem in the 1980s and 1990s and had to scale back. Even so, the scaled back Swedish economy puts the U.S. to shame in terms of the social safety net.
  5. My personal view is that there is a wide range of tax rates within which a developed country can experience roughly the same rate of GDP growth. The U.S. is probably at the low end ( we could raise taxes substantially without hurting economic growth. Sweden is probably at the high end ( The can't raise taxes any more without causing economic growth to decline).

Finally, I think a more accurate name for the so-called Fair Tax proposal would be "the Efficient Tax" proposal. The name "Fair Tax Proposal" should be reserved for a tax reform proposal which focuses on raising funds to give the U.S. a much better social safety net. That, of course, means raising the overall level of taxes ( for the middle class as well as the rich). by Dick Hattwick, June 1, 2008.

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