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Doc:

If you ever decide to give up medicine (don't go into economics) you definitely have a career is sales.

The "cascading" effect is an argument that is merely theoretical and qualitative.

Let me just premise that Dr. Feige's whole idea, at this point, is theoretical. He has gone to great lengths to exhibit how and why it might work but it is all theory, by his own admission.

Am always struck by your qualitative vs quantitative argument. Any disagreement with any aspect of APT is defined by you as qualitative. Quantitative is always defined as, speak to the small tax rate. Many of the arguments I have posted here are quantitative. Revenue neutrality issues tend to be more quantitative than qualitative. The huge taxes to be paid by businesses operating at losses, for whatever reason, are qualitative but also quantitative. The aggregate tax burdens on businesses and some of the wealthy are quantitative issues but their affects can venture into the qualitative. Agreed, most of the arguments against APT, are made up of qualitative aspects as well.

If you review all the rationales Dr. Feige uses as justifications for APT you will find that most of them are qualitative.

To always emphasize the small tax rate of APT and use that "selling point" as justification, or the obfuscation, of any inequities or failings of APT might be looked upon as less than ingenuous. If the objective is merely to promote APT then "selling points" are surely the best methodology to employ here. If the idea is to explore those objections which might arise to the theory, then qualitative and quantitative, extending far beyond just the small rate, issues should be raised and debated.

I fail to see where Dr. Feige has rendered cascading as ...merely theoretical and qualitative. That is to say, when you consider the quantitative and practical aspects the argument truly disappears according to industry executives interviewed over the years and Dr. Feige. Here are two bullet points from Dr. Feige's Powerpoint presentation to the President's Panel:

•Introduces new distortions resulting from cascading effect on final products with many stages of production.

•Cascading issue can be eliminated by permitting producers (at their expense) to adopt net VAT collection procedure, but this will complicate an otherwise seamless system.

The tone of those statements does not appear as merely theoretical and qualitative. You don't tend to include two bullet points to a presentation when the subject matter truly disappears. We are forever hearing about those "industry executives" but we can never find any quotations from them.

Cascading is related to vertical integration, they are not the same thing. Cascading tax costs could lead to more vertical integration. More from Dr. Feige's Powerpoint:
•May have negative effect of providing incentive for vertical integration.

His emphasis is on cascading through the various stages of production. I see no reference in his testimony of the 7% transaction number you mention but that percentage on gross transactions is no small number. You frequently throw out that 50% reduction as if it were some sort of give away, a sort of even if we cut them in half, rationale. Dr. Feige spent a great deal of paper, words and examples to justify his 50% reduction and admitted that there was not sufficient data to reliably estimate a percentage reduction so he borrowed the 50% from another study that was much more limited in scope. He didn't just offer it up it was integral to arriving at his assumed revenue neutrality rate.

He didn't approach, or at least he doesn't mention it, the cascading that takes place in the selling and distribution functions. Many industries, especially the food industry, have many layers in the sales and distribution of their goods. Some producers sell to brokers, who sell to distributors, who sell to wholesalers, who sell to retailers, who sell to the consumer. Others have various combinations of these. At each level, title generally passes which results in buying and selling, which adds .6%, in aggregate, at each stage and ends up as additional cost to the consumer. I know you like to keep arguing that the small rate will be absorbed by each business and not passed through, but I have given you examples of the aggregate tax costs and the aggregate dollars involved require a pass through. I never quite know if you tend to think in terms of the small rate as applied to profits and therefore believe it will be absorbed or just fail to recognize the number, and dollar volume, of transactions that take place from the inception of production to the ultimate sale to the consumer.

Not sure about everyone else but I have never suggested that my various objections, each by themselves, were fatal flaws. It's as you begin to accumulate them that you see the idea fading as a viable alternative. It should say something that the President's Panel apparently discarded all of the transaction based tax ideas in arriving at their recommendations. You often plead that more study is needed, with the commensurate funding, but you can't seem to answer the various fairly simple objections I raise. If you can't answer these, why spend money only to run across many more complex issues.

Doc:

I am referencing the title of my original post (it suggests great wisdom).

Now it would follow in your profession, although I do not know the specific venue within your profession in which you work, that "fatal flaws" would be a serious consideration, for in your profession "fatal" really can mean "fatal".

It may even be understandable that there would be a carry over to other aspects of your life, more from a profession oriented fetish than from a base of necessity. Can we assume that you quit prescribing Vioxx long before problems popped up? Is it likely that you discovered Salmonella in tomatoes before the issue developed? Was it clear to you, on the cutting edge, that prescribing Risperdal to a demented senior could have fatal consequences?

We are talking here about a tax system which by your own admission should not be judged on perfection. It is possible that you are a world class skeptic who runs his coffee through a Gas Chromatograph before imbibing each morning, but I don't really get that sense from your postings. A Valhallic tax proposal which was first presented to a professional group in 2000 surely couldn't have been highly suspect for being folly. Few professionals, let alone PhDs, will present the results of their ingenuity and research, especially to a peer group, without having it vetted for "fatal flaws" before ever leaving the "lab". If Dr. Feige and whatever reviewing resource he used, assumedly learned men and women, were satisified that the idea was valid and practical I would think that would be enough to adjudicate it as absent "fatal flaws", to any reasonable person, even a world class skeptic.

As with any idea, grandiose or otherwise, some idiot somewhere might finally see a tree that the originator missed for the forest. Chances? Also due to your profession I would guess you are much better at probability theory than I so I will let you answer that question.

No! No! Methinks it is one of those, ubiquitous dodges. Seeing an ever increasing list of minor "flaws" coupled with post after post of suggested alterations to the original idea it was time to redefine objectives.

Being that you are an honorable man, I cannot fathom that you would invite discussion and/or blind acceptance of an idea with which you were uncertain as to its true viability, without at least a disclaimer at the opening.

Hello! Welcome to APT! Please read the original document and let us know of any "fatal flaws" you find. Note: I will let you know if I decide they are truly "fatal".

Severe penalties?

There go all those cost savings from eliminating the IRS. With the cancellaton of almost all documentation and reporting systems how do you propose the evaders will ever get caught? Pull out the bottom brick and the structure becomes more risky.

Although you are minimizing the universe, I'll redefine to a "poetic used car salesman".

Hope you have a great day.

Doc:

Periodically entering here, I can feel the organ music emanating. I can see the robed speaker at the podium, surrounded by stained glass windows and various sculptures. I can hear him preaching the holistic values of a new phenomenon. No, not some miraculous cure for disease; not some biological discovery for ending starvation. Rather, a new fangled tax system!!!! A product so modern, so adapted to the current age that one cannot help but stand in awe.

One can hardly envision the benefits to all civilization. The opportunities abound! Surely this will lead to solutions improving the plight of all mankind! No doubt lifespans will double! Triple!!!

Darwin can but be smiling that his theory has been expanded to inanimate objects. History had to be rewritten to clear up the confusion when Patrick Henry said, "Give me liberty or give me APT!"; at the time no one knew what APT was. JFK's first draft of his inaugural speech originally said, "Ask not what your country can do for you, after it has delivered you APT".

The freedoms and benefits of democracy, bequeathed to we fortunate enough to be born in this country, pale in the light of APT. Progress had been but a slow, meaningless journey until APT opened up the gigantic doors to ultimate success.

All that's needed is a "Jerry Webster" and a VIP campaign.

Let us all kneel at the alter and pray a solemn prayer, exalting APT, followed by a rousing AMEN!!!!!

Doc:

Are the pharms working on a vaccine against "lack of APT" disease? It would seem a viable market if we are all dying due to a "lack of APT". Is especially needed if we are having to go through a years long study to determine if APT even makes sense.

I seem to remember a wise man once saying something like, "It is just a damn tax system after all" (quote could be a little off).

Don't forget Ben Franklin's wisdom: "A penny saved is a penny taxed by APT".