One of the most enjoyable parts of my job is reading all the e-mails I get from readers of this site. I do get an awful lot of them, which explains the glacial pace at which I reply to e-mails. A couple of readers have expressed interest in hearing what others like themselves think about a story.Because of that, I've decided to have reader responses be a regular feature here at Economics at About.com. I won't bore readers with the e-mails that just say, "You're doing a great job" or, "Moffatt, YOU STINK!" though I do get quite a few of both. I will be posting both praise and criticism here however. I'll also give a short reply to each message, which will be in italics. If you'd like to criticize or praise my work, please either
use the feedback form, or send an e-mail to
economics.guide@about.com.
For the first installment of this feature, I thought I'd respond to three e-mails about my "FairTax - Income Taxes vs. Sales Taxes" article which can be found at http://economics.about.com/cs/taxpolicy/a/fairtax.htm. On to the first letter!
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Mike,
Everything looks good on paper, but, after you've experienced some 60 years on this planet maybe you will realize how economics works in the real world. The current tax system has become an albatross to those of us who don't have the disposable income to not be concerned with its inequities. It is frustrating to put hard earned income into savings and investments only to find you have to surrender 20% to 30% to the IRS every April 15th. How about working 25 or 30 years for a company only to find your pension and your social security check is taxed. Personally, as a Senior Citizen, I look forward to seeing the FairTax become our new system of taxation. Reduced costs of products and services; no taxes deducted from my pension, social security and payroll checks; a pre-bate check to help offset tax on necessities; no more income tax on my savings interest and capital gains. To believe corporations would cut employees pay is being naive. Corporations being freed of the income tax could allow for better benefits for their employees including a return to better health benefits. Theory is one thing but reality is where it's at.
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A few points in response:
- Every study has shown that FairTax is more regressive than our
current income tax. The supposed benefit is that everyone will pay less
taxes. I honestly don't see that happening, but I'm willing to state
that it is possible.
- How is paying 30% of your income in sales taxes rather than income
taxes any more crushing?
- I agree that's it's naive to think companies will start cutting the
pay of their employees. If they don't, though, how is this huge drop in
prices we're supposed to see come about? Where are these "reduced costs
of production" going to come from? If the companies are spending more
money on health care, then shouldn't prices go up, not down?
- Do you always disagree with economists, or just the ones that say
things which disagree with your beliefs? I might be young(ish), but I have spent a long time working on these problems, so I don't think my age should be held against me.
Thanks for writing,
Mike
Be sure to continue to page 2 for the next letter.
