Embar wrote:A consumption based tax system would treat everyone equally, be progressive (the more you have the more you spend) and not penalize people that want to save money instead of spend it.
As if it was needed, more proof that Embar is a) dishonest, and/or b) impervious to knowledge.
A consumption based system would be more regressive than our current system. You of all people aren't going to support a system that increases your tax burden or shifts taxes towards higher earners when all your whining is aimed at doing the opposite.
And you were caught lying about this very topic in the past. You have no credibility on this issue.
"I find it elevating and exhilarating to discover that we live in a universe which permits the evolution of molecular machines as intricate and subtle as we."
-Carl Sagan
Consumption taxes are absolutely regressive with respect to income (the way regressive/progressive is usually measured) simply because the poor save a lower percentage of their earnings and are therefore taxed on a higher proportion of those earnings.
Having said that, I believe a consumption tax (or VAT, or GST, or whatever you want to call it) is a component of a sensible taxation system. it lets you significantly raise the tax-free threshold on incomes and is quite easy to monitor and collect on for the government. i just think you need rebates/assistance to offset the regressive nature at the low end and income taxes at the high end to maintain a progressive structure.
Corporate taxation is tricky. S-Corps are obviously taxed as personal income no matter what you do. It all needs to be watched because people can bury personal income in non-monetary fringe benefits quite easily. C-Corp profits are tricky - do you tax the dividends as pure personal income if you don't tax corporate profit directly?
I think payroll tax is a dirty trick, personally. Just toss the whole thing and raise income taxes. Quit hiding taxation from the general public.
I don't mind folding everything back to an income tax + consumption tax. No deductions. No tax-free entities. Use government assistance to sort out gross inequities directly rather than complicating the tax codes.
