World needs a progressive consumption tax

[occdude]

Re: World needs a progressive consumption tax

First whats wrong with consumption? I consume, I do it from savings so what's the prob.? Why should I be penalized for consuming goods? I like things and I'am willing to work for them. Take away the "things" I like to work for and I may not work.

Second, what are you going to do with all this largess you "shake down" from all these conspicuose consumers? Will the government in all its collective wisdom allocate resources more to the benefit of society like the dmv or dwp or hud or will all the endangered polar bears get air conditioning to combat global warming?

Whatever you tax you discourage. So if you want to tax something, how about the government?

[blazespinnaker]

Re: World needs a progressive consumption tax

Time spent exchanging ideas with others, time spent reading a good book, time spent with your family and friends, time spent learning about this beautiful and wonderful universe that we were born into,

That's why you work with friends and family, and you work at things that require reaqding a good book and learning about the beautiful and wonderful universe.

[Many Arrows]

Re: World needs a progressive consumption tax

Adoption of a consumption tax to replace the income tax in the USA won't happen until the system collapses and a new one has to be constructed.

As Sharky, noted the spending is so stratospheric that it drives the rates well above 50%.

The insurmountable problem is that those in retirement or close to it have previously taxed savings that they plan to draw down during retirement a time in which their effective tax rates decline or go away. A high rate consumption tax blows away these previously taxed savings much faster.

Most here figure price hyperinflation is in our futures, so a consumption tax rewards government-produced inflation with greater revenues.

Finally, with the national sales tax legislation currently introduced into Congress, corporations would get tax forgiveness of more than $1 trillion of back taxes while old ladies in nursing homes get a 30% federal tax on their nursing home care.

I like the idea, but it is impossible without a) reduction of government spending to be so funded and b) financial collapse of the US government. Actually I could reduce it down to the latter, for the only way spending will be reduced enough is for the government to collapse.

[nathanhulick]

Re: World needs a progressive consumption tax

Anyone who thinks we need more taxes, please feel free to send me whatever extra money you think you should have paid, and I will forward it accordingly!

[BadJuju]

Re: World needs a progressive consumption tax

The world cannot continue down its current path. The earth's resources are being depleted at record rates, and if civilization is unwilling to make the changes necessary to live in accord with nature rather than against it, it will fall.

[Uno]

Re: World needs a progressive consumption tax

The only new tax we need is a lawyer tax.

Everytime you use a lawyer to resolve a dispute, the party should pay a 50% tax.

Corporations should pay a 70% tax rate on all legal services.

That will fix many things in our economy over night.

[flintlock]

Re: World needs a progressive consumption tax

Ditto on the lawyer tax

Anyone have any opinions on the Fair Tax, pro or con.
http://www.fairtax.org/site/PageServer

I think any new tax code needs to provide tax breaks to corporations that will encourage them to settle in the USA, instead of fleeing it like they've been doing for years. Corporations don't really pay taxes anyway, but simply pass them along to consumers.

[lurker]

I don't see the need for new taxes as much as I see the need for reduced government spending. The Iraq war has done more to screw up the global environment than all the big screen TVs and SUVs sold in the US.

I'd like to see a greatly simplified progressive income tax with no loopholes / deductions, and greatly reduced government spending.

There should be a constitutional requirement for no deficit spending .... ever. If economic stimulation is needed it should come from savings the government put aside during good economic times. If the government wants to wage a war there should be a public referendum and it should be paid for by massively increasing the taxes of the generation that voted for the war.

[LargoWinch]

Re: World needs a progressive consumption tax

F**king Harper in Canada cut the GST though, which is why I hate his guts.

More for the rentier class. Hooray!

[Many Arrows]

Re: World needs a progressive consumption tax

Ditto on the lawyer tax

Anyone have any opinions on the Fair Tax, pro or con.
http://www.fairtax.org/site/PageServer.

I have looked at it in depth and read both books by Linder and Boortz on the subject. Boortz is a right wing talk show host. Linder is a congressman. In their latest book, which was supposed to be a "defense" they started off saying that they would not defend the actual legislation, only their "concept" of the Fairtax.

There are a host of reasons that it is a very bad tax for most people, particularly those in retirement or near retirement, because a large component of the fairtax is to fund SS and Medicare. This means that people are double taxed - using after income-tax savings to then buy FairTaxed purchases. It is also a tax on services, like nursing home and medical care that are escalating in cost at a far greater rate than most anything else and the tax payments go up in direct proportion to those costs.

The Fairtaxers make one very serious misrepresentation of facts.... they claim that prices would go down 26% with FT passage, due to the elimination of all employment based taxes in the cost of goods and services. They also tell people that they get "100% of your paycheck" when the payroll-based taxes included in salary are also included in the 26% embedded tax reduction claim. Both of these claims cannot be true.

One "positive" thing is that the tax would apply to financial services. The trouble is that all stock brokerage would move offshore so that the 30% tax would not be collected. Any services performed offshore would be free of tax - or rather the Tax Auditors would perform audits of consumers to capture the tax on citizens via the use tax half of the scheme.

My research showed that just 20 large corporations, especially oil companies, would get $200 billion in income tax forgiveness, as they have large deferred income tax liabilities that go away with passage.

The only way the FT is revenue neutral at rates of 30% (the FTers like to cite a 23% tax inclusive rate to make it sound more palatable) is that is applies the tax to purchases of state and local governments. This, and the loss of income-tax exempt bond financing, would drive property taxes up sharply.

The existing state and local sales taxes would likely also convert to the FT base, so that the overall rate would approach 40%.

Credit card companies would be destroyed because the FT applies to any interest charged in excess of a federal rate benchmark, the federal funds rate being my recollection. Another issue is that existing sales taxes are due on the 20th of the month following the month of purchase, which allows the credit card company time to recoup the low rate tax from cardholders, while the FT mandates that the FT be deposited within days, meaning the CC companies are out of pocket the 30% tax for the better part of a month, unless their billing cycle matches the tax payment cycle.

The FTers claim that the IRS is eliminated, but it makes IRS agents the biggest winners (next to the corps getting $trillion in tax forgiveness) as they will take their severance and immediately become employed by the instantly-undermanned state revenue agencies charged with collecting the FT.

The FTers claim that consumers don't have to be subjected to audits, but the EXISTING laws of every state with a sales tax say otherwise and the FT bill iself requires that consumers keep receipts. Not only that, but jurisprudence exists that allows revenue auditors to ESTIMATE how much sales tax one owes if he/she has not kept adequate records.

I would call the FT your basic con job with respect to most people. The intial funding came from Shell Oil and Enron, which paid for the "expert" economists (read that "prostitutes"), and the oil companies are at the front of the pack with respect to deferred income tax balances that would be forgiving. The FTers have boasted $100 million in funding that is coming from someplace.......

Choose your poison.

I am neutral on it. It hurts me in that I end up double taxed at this late stage of life at horrendous rates on necessities. It helps that I can capitalize on the unintended consequences that the vast majority of folks fail to see as they clamor for the "Fair"tax.

It would be the best thing to happen to the accounting profession in decades, contrary to the claims by the "Fair"tax promoters.