Sat 13 Sep, 2003 05:21 pm
just wanted your thoughts on replacing the income tax with a consumption tax which involves a federal sales tax (~15%?) with the exception of food, clothing (ie. under $100 above which it would be taxed on the portion above $100), raw materials (ie. wood, metal...), and other necesities like water, oil, gas, electricity (up to a certain limit above which it would be taxed on the portion it goes over).
it would also involve eliminating the corporate income tax and dividend tax.
it would encourage saving and stimulate investment and it just seems more fair. why penalize people for the money they make? it would eliminate a lot of tax loopholes and evations and help emphasize profits. it would almost eliminate the need for the IRS.
If we're going to have a consumption tax, there needs to be no exceptions. Start creating exceptions and you might as well keep the tax plan we currently have.
It needs to be a flat rate for everyone, no matter what your income level.
Flat rate, also without exceptions or deductions, and revenue neutral?
you have to have exceptions for food and other necessities. otherwise the poor would be totally screwed. some states already exempt certain products from state tax.
and raw materials and possibly some equipment. otherwise you're adding 15% to the cost of manufacturing a product plus a 15% tax on the sale. that's a 32.25% increase in the price of all manufactured goods not including the increase in fixed costs.