Originally Posted by Superbowltrashcan
I have read several flat tax consumption tax books and studies, could you elaborate on what model you support? Is it possible or even a viable concern to be worried about secondary/black markets as a means of avoiding a consumption tax? And do you view usage, purchase, and consumption equally in your model?
I'm not at my desk, so forgive me if I don't have the exact terminology (would love to continue this during the week)....
The keystones to it IIRC are:
1) abolish ALL federal income tax, corporate & personal
2) replace with a consumption tax of an additional X%, on most goods & materials...purchased new.
2a) exceptions for some basic goods would be made, like basic food items...bread,milk,tortillas,rice,veggies, basic cuts of meat ...foods that are staples.
2b) exceptions to used goods sold at non-profit /charity type situations could also be made (thrift stores, goodwill etc)...possibly all used goods
3) The % (x) could also be variable....like have 2-3 classes of items...say normal & luxury....where luxury items could suffer an even higher % penalty (yachts, luxury or inefficient vehicles, large homes, appliances that consume over x amount of energy etc...)
Results / examples:
a) a middle class family making 75k can choose to buy used items, refurbish used furniture live modestly and save on taxes.....or buy new stuff , live a more lavish life style, but pay for it via taxes. Much better than current option where you have no choice.
b) a lower income family on welfare who (under the current system) pays nothing in federal income taxes buys an x-box for their family instead of saving it for college. They would thus now be forced to contribute into a system that they currently only TAKE from. Also, if they chose to save this money for a better use, they would not be penalized for income, as they would currently. The proposed system rewards desired economic practices.
c) companies just starting, small / low budget could buy used furniture / equipment etc......and money they make would not be penalized. Larger / wealthier companies buying new / lavish items would pay taxes accordingly.......want to run a green/ low impact company? you will pay little taxes.......want to run a lavish company with planes/yachts? you will PAY now instead of being able to write these 'expenses' off.
tl;dr : **** income taxes it doesnt work....too many loopholes....too many deductions ....consumption based system with no loopholes for a fair and just tax system