| I am inclined to favor a consumption tax. But I am not sure how we determine equity in any tax system. Just as there is no "just price" for goods and services, but only market value, I suspect that there is no "fair tax", only what has been democratically determined. In saying that, I do not mean to imply that there are no possible inequities, for example, confiscatory taxation of the wealthy. I mean that the precise rates are subject to negotiations within a political forum, as a sort of collective bargaining of the citizenry, in determining how much government they are willing to pay for. Just as a vote determines a union contract, and everyone has to go along, so a vote, or series of votes and other activities determine the direction of tax policy. Everyone gets to make a case, the question is, are the people buying it? The general principle is simple economics: that the people pay the least possible in taxes for the most in government services, or, in other words, economic maximization. One can make the case that a consumption tax is fairer because it allows one some degree of control over how much one is taxed, since one has some discretion in spending, beyond necessities. On the other hand, one does not want to precipitate a fiscal crisis because too many people are opting out of the cash economy, and cannot be tracked down for taxation on barters. Yet, one could argue that that is a safety valve ensuring fairness: no one will go out of his way as long as taxes are kept at a reasonable level........ |
