BHI Weekly Dispatch: The FairTax, Economic Forecast for Massachusetts, Debt Ceiling

BHI Executive Director David G. Tuerck testified on Tuesday, July 26, before the House Ways and Means Committee on H.R. 25, commonly known as the FairTax, a proposal to reform the tax system by establishing a national sales tax.

Tuerck, who also serves as chairman of the Economics Department at Suffolk University,

outlined the virtues of a national consumption tax that would replace most of the entire federal tax code.

His testimony highlighted the most important criteria for judging tax systems: efficiency, equity, growth, simplicity, transparency, political sustainability, and compliance.

Compared with income taxation, consumption taxation has a number of advantages along each of these dimensions.  And among alternative ways to tax consumption, the FairTax ranks particularly high with respect to transparency and political sustainability.

A video of his joint testimony (PDF) with Boston University Professor of Economics Laurence Kotlikoff is available here.

Also speaking before the House Ways and Means Committee was former Arkansas Governor and former presidential candidate Mike Huckabee, an early FairTax advocate.

The institute this week released its most recent forecast for the Massachusetts economy.

BHI expects the state’s economy to grow by 2.9% in 2011 and 2.8% in 2012 Meanwhile, as part of the forecast, the Institute estimates that the state will have added 84,000 jobs by the end of 2011. Job growth will continue at a moderate pace into 2012 with 65,000 jobs coming on line.

The employment increases will boost salaries and wages by a modest 3.2% in 2011, accelerating to 3.6% in 2012. This wage and salary growth would be on par with the recovery coming out of the recession in 2001, but significantly slower than the recovery from the 1990-1991 recession.

The release was covered by the Herald and other publications.    

Paul Chesser of the American Tradition Institute cited BHI’s research analyzing the costs associated with a federal renewable energy mandate.

Yesterday, David Tuerck joined former Congressman William Delahunt to discuss the debt ceiling debate in Washington D.C. with NECN’s Jim Braude.

About Beacon Hill Institute

The Beacon Hill Institute engages in rigorous economic research and conducts educational programs for the purpose of producing and disseminating readable analyses of current public policy issues to voters, taxpayers, opinion leaders and policy makers.