" wrote in news:8d5efa5c-a202-4e1e-bfa2-
:

On Apr 17, 3:10*pm, wrote:
On Sunday, April 15, 2012 3:37:33 PM UTC-4, net cop wrote:
It's time to just dump the income tax altogether. Repeal the 16th Ame
ndment, and institute a
sales tax instead.

And this advanced economic theory is based on what?

Everybody spends money, but not everybody "makes" money (on the books).

That's true. One benefit of a national sales tax or a VAT
tax is that it's harder to avoid.




And what is it supposed to accomplish?

For one thing it would ensure that everyone paid their "fair share." Ever
yone would pay the same rate, but the rich spend more money so they would end up
paying more taxes.

The problem is that the rich would pay a lot less than
they do under the current system or with a flat income tax.

Very doubtful. Investment income is taxed at a considerably lower rate than wage or salary
income -- with the result that the rich generally pay a lower rate under the current system
than do the middle class. Remember Warren Buffet and his secretary?

Congress has been using the tax code as an instrument of social and economic policy for
several generations. Without addressing the merits (or lack thereof) of doing so, I wish to
point out that a sales tax can be *much* more finely tuned, in that respect, than an income
tax, for example:
-- no sales tax whatever on staple foods such as flour, sugar, eggs, milk, etc. but substantial
sales tax on soda, potato chips, Twinkies, etc
-- sales tax *rate* on meat tied to the per-pound price, e.g. 1% on hamburger and 10% on
filet mignon
-- no sales tax whatever on any used goods
-- first $50K of the price of a home exempted
and so on. We can argue about the specifics all day long, but there are many, many ways
that a sales tax can be structured to minimize or eliminate its impact on the very poor.



The rich do spend more, but I think very few are
spending enough to come anywhere close to making
up the income tax that would be lost.

Take Warren Buffet for example. He's paying around
18%. Even if he spent everything he makes, you'd
have to have an 18% sales tax to equal it. And Buffet
lives relatively modestly. I'll bet he doesn't spend 5%
of what he earns.

And the tax would hit the poor, who pay no tax at all
the hardest. You could partly offset that by making
food, housing up to a certain point, etc exempt.

It's interesting, but I believe it would shift a lot more
of the tax burden to the poor and middle class.



The overall rate would be lower because every dollar spent would be taxed
.

It would encourage saving.

Yes, but with an economy just barely moving, it could also
put us in a depression when people reduce buying.



It would eliminate complex annual tax returns.

The infrastructure to collect the tax is already in place in most states.