Greenie must be on the juice....
a tax that ENSURES the LOWEST level of earners will PAY THE MOST
ABC News
Greenspan Touts Consumption Tax
Greenspan Touts Consumption Tax and Simplification to Spur Savings and Investment
Federal Reserve Chairman Alan Greenspan looks over his notes before speaking to the President's Advisory Panel on Federal Tax Reform on Thursday, March 3, 2005 in Washington. Revamping the complex tax code is an important goal of President Bush. (AP Photo/Kevin Wolf)
By MARY DALRYMPLE
The Associated PressThe Associated Press
WASHINGTON Mar 3, 2005 — Federal Reserve Chairman Alan Greenspan said Thursday that a new consumption tax such as a national sales tax could spark the economy as a partial replacement for income taxes.
Greenspan cautioned that there would be both political and administrative difficulties in moving toward a new national tax system. Simplification is needed, perhaps a hybrid between consumption taxes and income taxes, he told the President's Advisory Panel on Federal Tax Reform.
"In other words, don't try for purity," Greenspan said in response to a question from a panelist.
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Pitching toward a pure consumption tax would arouse such opposition as to make the idea "infeasible," he said.
President Bush said he would reserve judgment about major tax changes, including a consumption tax, until the panel reports back.
"I've told the American people I want to work to simplify the tax code, to make it easier to understand, so people (are) spending less time filing paper. And I believe a simplified tax code will spur entrepreneurial activity," Bush told reporters. "And so I'm looking forward to what the commission has to say."
Democrats raised alarm about potentially crippling taxes on food and medicine when the possibility of a national sales tax came up last fall during the presidential election.
The panel's vice chairman, former Sen. John Breaux, D-La., said it was important that the Fed chief asserted income and consumption taxes could work together.
"He said you could do both," Breaux said. "I don't think he endorsed it, but his saying that it can work, like many other countries have done, I think was a very significant statement."
Bush's advisers have spoken favorably of the economic benefits that could be achieved by moving from a system that taxes income to one that taxes consumption.
Addressing concerns about increased taxes on necessities like food, Greenspan said policy-makers could design a consumption tax that would exclude products mostly consumed by the poor. |
