On Fri, 07 Sep 2007 13:27:34 -0700, John Larkin
wrote:

On Fri, 07 Sep 2007 13:07:11 -0400, Chuck Harris
wrote:

John Larkin wrote:



Income tax makes no sense. There should be only one tax, on
consumption, and it should be fully visible, as sales taxes are in the
US, not hidden like VAT.

John

Agreed, but the last thing the government would want is for you to be
constantly reminded of how far they have their hand into your pocket.

Imagine that instead of the 5 to 7% that most of us pay in state sales/use
tax that it was, say, 29% I think that might be a bit of a shocker.

Also, taxes on consumption are by nature highly regressive. The poor
by pay a greater proportion of their income to buy consumables (like food,
clothes, transportation and shelter) than do the rich.... I'm not saying
that is necessarily a bad thing... but I think it would cause a revolution.

-Chuck

It's easy to exempt basics, like food and reasonable housing and
low-price clothing, and/or have payments to poor people, like the
earned income credit.

It's better to have payments, and have NOTHING exempt. Othewise you
run into problems with inputs used for exempt products and everything
gets an order of magnitude more complex. The tax rate is also lower if
nothing is exempt.

One real advantage of a sales tax is that it will hit Chinese imports
equally with US products. Currently, US manufacturers pay scads of
taxes that importers don't, taxes that export manufacturing jobs.

John

Yes, and not just Chinese, also (probably more importantly) European
imports where there is no VAT charged and input tax credits are
applied.

Best regards,
Spehro Pefhany
--
"it's the network..." "The Journey is the reward"
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