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Politics : Politics for Pros- moderated
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To: John Carragher who wrote (84604)11/7/2004 9:47:33 AM
From: KyrosL  Read Replies (1) of 793840
 
The Federal Government collects about $2 trillion in taxes a year and half of that is individual income tax -- the rest are SS taxes, corporate taxes, tobacco and gas excise taxes etc.

So, based on the fact that consumption is around 70% of GDP or $7.5 trillion, you need a rate of around 13% on EVERYTHING to replace the individual income tax -- I don't know where people come up with ridiculous numbers like 6%.

Now, if you exclude essential goods like food and medicine, the rate goes up to 20% or more. Those are the facts.

For what it's worth, I think some kind of VAT is a good thing, but it should be used only as an addition to the income and SS taxes to allow simplification of the income tax and reform of the SS tax system.
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