In my several responses to yt_knight I am afraid I have in many places let him frame the debate and that has led me to be a bit less than happy with my replies. I still stand by what I said, but I do want to clarify a few things.

First of all, yt_knight's insistence that I could not simply "poke holes" in the FairTax, but had to propose an alternative led me to acting as an advocate of the flat tax, which I am not. If we assume we must change the tax system, and that the substitute must be another national tax scheme, I suppose it is the best, but that is not saying much. In reality, if it were politically possible, I would prefer a capitation tax or poll tax if we must have a nation tax, as a uniform fee per citizen seems more fair, and much less intrusive. However, it would never get out of committee, much less to any legislature floor.

And, of course, in reality, I would prefer to eliminate national taxation entirely, and return taxation to the states. Actually, I would want almost all state functions returned to the states. But since yt_knight insists on framing this in terms of competing national tax schemes, I have not been able to argue that.

Second, I am a bit put off by the assumption that we must have tax reform. Or that it is the most urgent problem facing us domestically. I agree that our tax system is not ideal, but I don't even know if I would agree that it is broken, though I think I have said so once or twice in the past. In reality, confusing as it is, it works relatively well and generates revenues without too many ill effects. It could obviously be better, but is it in such urgent need of reform that we should jump at anything even marginally better?

Even if we accept that the tax system is broken, I would argue that spending reform comes before tax reform. Far more harm is done by deficit spending and subsequent monetary expansion than by the tax system. If we are going to focus on one domestic issue, I would rather see a balanced budget bill with real teeth than even the most wonderful new tax system. It would do far more good.

Third, the very format itself is a bit peculiar. Yt_knight has proposed a debate of what are essential traits of a new tax system, but then smuggled in items which appeared to be there simply to make sure only the FairTax fit. If we are debating an ideal tax system, then we must not worry about ephemeral issues such as whether the tax system deals with social security. If we are dealing with a realistic proposal for the present, then we cannot ignore issues such as WTO fines which cut against the FairTax. It cannot go both ways. Until we agree whether we are arguing over the ideal system or the best we can hope for at present, this is a meaningless debate, as the vague criteria lead to nothing but confusion.

Finally, I cannot understand yt_knight's objections that I am comparing the FairTax to a system without tax, as opposed to comparing it to what we have now. If I am to evaluate something, I need to see how it changes the economy, not how it improves what we have now. When a doctor looks at a patient, he compares his symptoms to a healthy person, not to the patient down the hall. We need to evaluate each tax system against a system without taxes to see how that system changes the economy. We can then compare the effects of each system to the others to choose the best means to achieve whatever goals we set. We cannot start off comparing systems to one another before we see what they do on their own.

So, I would propose agree to the following points before continuing the debate.

First, that we eliminate any rhetoric of urgent need as a justification for change. The present system in one form or another has existed since World War I, and the world has not ended. We have more than enough time to debate this question properly.

Second, just being better than our current system is not enough to justify change. Change is not without costs. Any new system has to be not just better, but enough of an improvement to justify the costs of change as well.

Third, admit that there is uncertainty in any new enterprise. That being the case, the proper way to evaluate a change is to look not just at the the most optimistic assessments, but the most pessimistic as well. It is not "poking holes" to point out the worst case, but a reasonable approach. When we know the best and worst any approach has to offer, we can fairly evaluate it.

Fourth, as there is uncertainty, it is not enough to justify change by pointing out the most optimistic outcomes of the new approach are better than the present reality. Either one must show the most optimistic outcomes are near certainties, or show that on average all likely outcomes are sufficiently better than the present.

Fifth, any given theory must first be evaluated in isolation. After it has been assessed on its own terms, its strengths and weaknesses can be compared to those of other theories. Starting off by comparing it to a known theory simply shows whether it is better or worse than that theory and does not provide us any means of evaluating it against a third theory. Specifically, showing how the FairTax improves on what we have now does not tell us how it would compare to a flat tax or another alternative.

Sixth, all evaluations are valid only in relation to certain fixed goals. It is impossible to say "objectively X is better". X is only better in terms of its ability to achieve a set goal. To speak of X as better than Y in the abstract is meaningless. There is no such thing as absolute good and bad in economics.

Finally, there is no logical necessity for a national tax. While I may from time to time compare the FairTax to alternate proposals for a national tax plan, there is no necessity of a national tax at all, and we existed for quite some time without one. Yes, it is unlikely that the federal government will surrender their power to tax, but it is unlikely the 16th amendment will be repealed as well, so we aren't talking about likely events on either side here.

I think that's it. If we can agree on those, I think the debate may be a bit more clear, as we seem to have had some confusion and some hidden assumptions that made the discussion a bit more confused than it needed to be.