When attempting to consider solutions to existing problems is it not appropriate to have goals and objectives that deal with existing deficiencies? Creating goals and objectives in a vacuum or against some fantasy (untaxed) land isn’t realistic. We all have familiarity with the current tax system and should use it as a baseline (since this is what we desire to move away from).

Andrew writes “We need to evaluate each tax system against a system without taxes to see how that system changes the economy.”

Exactly whose economy are you using as a baseline if we aren’t talking about our economy? To be clear - our economy has run under our present system in one form or another for nearly an entire century. Again, how can we know what changes will occur unless we compare to what is known. I maintain that it is completely appropriate to compare to our current system.

Also, I keep hearing the WTO argument. How does the WTO deal with state sales tax? I really don’t understand the concern with the WTO. Does the WTO influence the EEC from stripping away VATs from export items that make it to our shores? What if duty and a national sales tax were one and the same? I am doing my best not to pick a tax solution (FairTax, Flat Tax)… I am mainly trying to identify deficiencies with our current tax system as objectives to strive for fixing in a new tax system.

In terms of Andrew’s ground rules… 

1.   I do see a real urgency. The runaway stagecoach is extreme but Andrew’s argument that our tax system hasn’t ended the world in the last 100 years with our present system does not apply either. The world is different today than it was 25/50/100 years ago. The next 25 years will be different than our last 25 years just as the 5 years preceding 2005 for Real Estate were different than the years immediately after 2005. At what point do we choose to reverse the trend of jobs, capital, and opportunity fleeing our lands? While we still can or when it is too late?
2. Agreed that a new system must be MUCH better than our current system.

3. Yes, there is always uncertainty. There was uncertainty ahead of the American Revolution. Our founding fathers embarked on something that had never been tried before. There is uncertainty with staying with our current tax system as well.

4. Coming up with the exhaustive analysis of pro and con I will leave up to the analysts. I am going to focus on common sense in my arguments.

5. As indicated above, it is impossible to compare a new system to a system of no taxation as a baseline. There are no real-world problems to compare against. 6. When we define (and agree on) the objectives, we can consider solutions (FairTax, Flat Tax, etc.) against the objectives. Regarding an argument for against a national tax, we both agree that this would be unrealistic.

So, at this point where do we stand with solutions requirements? My tally is as follows Objective - YK favorable/Andrew favorable

1. Simple (Y/N)
2. Fund our government at the same level. (Y/Y)
3. Remove barriers to Economic Growth. (Y/Y)
4. Remove barriers to U.S. Competiveness Internationally (Y/Y)
5. Minimize barriers to Capital Investment in the U.S. (Y/Y)
6. Minimize barriers to Capital Formation in the U.S. (Y/Y)
7. Minimize loss of productivity as a consequence of taxation (Y/Y)
8. Respect privacy and civil rights (Y/N)
9. Make the true cost of government transparent. (Y/?)
10. Remove barriers to upward mobility. (Y/?)
11. Lower the cost of employment (Y/?)
12. Minimize barriers to Create Jobs (Y/?)
13. Treat everyone equitably (Y/Y)
14. Minimize barriers to capital formation and entrepreneurship (Y/?)
15. Level the playing field between small and large business (Y/?)
16. Minimize Tax Planning as a Burden (Y/?)
17. Easy to administer (Y/?)
18. Address Medicare and Social Security (Y/?)
19. Minimizes the individual harm done (Y/Y)
20. Treats all individuals and all types of income and wealth similarly (Y/Y)
21. Does not target specific acts or assets for favorable or punitive treatment (Y/Y)
22. Has the lowest total administrative cost per dollar of revenue (Y/Y)
23. Taxes only enough to cover needs, not more (N/Y)
24. Produces consistent results (Y/Y)

Please note that Andrew ’ s objectives have been added to the list as items 19-24 but that they are no more or less important that the objectives that I list.  If we can agree to clear out the objectives that we agree on, I would like focus on the objectives that we don't agree on to either (1) gain consensus or (2) agree to disagree.

YK