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Politics : Politics for Pros- moderated

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To: JDN who wrote (84601)	11/7/2004 7:40:56 AM
From: Lane3	Read Replies (1) of 793838

No, its no where NEAR that high, probably something under 6%. Are you suggesting that a VAT to replace the income tax would be only six percent? If so, that's counterintuitive. If Uncle Sam wants to get the same amount of tax from me via a sales tax as it does from an income tax, then he would have to tax me at a higher rate than my income tax rate given that I spend less than I earn. If food and medicine were not taxed, then the rate on other merchandise would be even higher. Hopefully there would be tax revenues from transactions that now escape taxes, but even at 25%, that would perhaps compensate for not taxing food and medicine. It surely wouldn't get the rate down to six percent. Many years ago when I first entertained the notion of a flat tax on income, I calculated total tax revenues vs. total income and come up with a rate of around nineteen percent. If the population at large pays nineteen percent of its income in income tax, then it would have to pay a higher percentage of spending, perhapt 30%, to produce the same revenues. Wouldn't it?

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