That's the idea. All income treated the same.
That's fine, but I think as long as people's productivity is taxed, the burden will be felt more acutely by the poor than by anyone else and we will still continue to have compliance issues.
Why? Wouldn't payroll deduction be operated the same as now? Wouldn't people be allowed to file quarterly... just as now?
It is quite a lot to expect of folks who typically pay no taxes. In addition to the considerable challenges already before them, you are demanding that they pay chunks of their money to the government four times a year, reconciling the whole shebang on or before April 15th. Even the quarterly payments will present a substantial burden and with the increased burden of quarterly filing I think we are talking about causing problems where we need cause none. Taxing consumption and not income could put everyone on an equal footing, at least legislatively, while also radically simplifying the tax code.
Certainly an excellent solution under nearly any circumstances, but the two are not mutually exclusive....
Perhaps not where the flat tax is concerned. The talk of flat taxes rarely if ever includes plans for a radical decrease in spending. Essentially flat taxers are mere redistributionists. They want to garner the same tax revenues by different means, spreading around the responsibility differently. The flat tax will just skyrocket because the real problem never was fixed.
Since I scarcely think taxing consumption would produce enough revenue to sustain our current spending levels, I think a switch to this sort of system would require radical spending cuts -- indeed a radical change in spending philosophy. The cuts would have to be linked to the tax code change, else the change would not work.
The States and localities will never allow the Feds to horn in on one of their primary sources of revenue.
I don't see why not, especially if it meant the total elimination of the income tax and the gigantic federal bureaucracy required to maintain it.
Actually, it's exactly the OPPOSITE! The wealthy 'consume' at a far lower rate (proportionate to their income) then do the poor... the wealthy *invest* at a higher rate.
Well, I am not really concerned about the consumption to income ratio. I think in simple terms wealthy people are required to consume more than the poor and as a result would pay higher effective taxes. Surely they could pay low taxes proportionate to income, but I gotta tell ya, that is quite the case right now. It really is a matter of how the tax is applied and to what it is applied.
Well... if you are going to have a LONG list of special exemptions, special rates, and other loopholes... then I fear 'consumption taxes' will be an even bigger mess, and drain on the citizen's wealth, and a bigger enabler of government bureaucracy and tax evasion... then what we have now.
I doubt it. The list needs not be long at all, essentially giving Americans incentives to simplify their consumption while giving a break to the poor. I don't really see how one can evade taxes merely because of the fact one can buy a bag of beans tax free, but maybe the possibility exists. I do see a difficulty in that certain industries would by default be legally favored while others are pressured. It was just an idea. I certainly would not make this point a deal breaker, that is for sure. |
