Sunday, January 25, 2009

Taxing Sales Under the FairTax: What Rate Works?

In a 2006 paper entitled "Taxing Sales Under the FairTax: What Rate Works?", Paul Bachman, Jonathan Haughton, Laurence J. Kotlikoff, Alfonso Sanchez-Penalver, and David G. Tuerck conclude that based on 2006 levels of government spending (which have subsequently increased) the required national sales tax rate would be 31.27% on a tax-exclusive basis. This tax would be in addition to existing sales taxes that generate revenues for state and local governments.

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