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Politics : Politics for Pros- moderated
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To: JDN who wrote (84653)11/7/2004 1:48:15 PM
From: Lane3  Read Replies (1) of 793838
 
I think you are forgetting big ticket items that a person as a rule only buys now and again like cars, refridgerators, stoves and the like.

I don't get your point.

If we spend no more than we earn and we pay upwards of twenty percent now on our earnings in income tax, then we'd have to pay further upwards of twenty percent in VAT on our spending to produce the same tax revenues. I don't see the relevance of whether that spending is for a stove or for lawn seed, blue jeans, and diapers.

Say everyone earns 50K and pays 20 percent (10K) in income tax, spends 30K, and saves 10K. When we switch from an income tax to a sales tax, we have to get the same 10K in revenue from the 30K in spending, which would mean a VAT tax rate of 33%. NO?
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