Arguments Against Flat or ConsumptionTax?

[libertad]

Excellent Commentary

I certainly understand your thinking and expected these types of comments...

However ...money is money...and knows no label....

And of course the topic is about two labels...

However...what you are really doing is trying to make a decision about the ownership of money flows...and which structure would be better than another...

Simple process.....

 

[hans37]

Quote from libertad:

Excellent Commentary

I certainly understand your thinking and expected these types of comments...

However ...money is money...and knows no label....

And of course the topic is about two labels...

However...what you are really doing is trying to make a decision about the ownership of money flows...and which structure would be better than another...

Simple process.....

no we are talking about the friction (loss to the gov't)generated when the money flows.


Yes and 2 different labels usually denotes there is a differentiation between the 2 unless they are synonymous.

In which case I suspect you are wrong yet again(nice rationalization effort though) in not accepting the difference between income and consumption tax.

The 2 words have different spellings for a reason, figure it out!

 

[libertad]

Well these are all good thoughts....and I do understand the labels....

However...Paulson will be thinking about what structure of taxes will make the US more competitive in the world....and since the costs of production are so high in the US...even more emphasis will be placed on legal maneuvering...

However it is simply a matter of ownership of the cash flows and which mix is better....

If the consumption structure...flat structure...or the current progressive structure serves the US the best from a competitive viewpoint...then the US should go in that direction....

Excellent commentary all....

 

[gnome]

Quote from hans37:

no we are talking about the friction (loss to the gov't)generated when the money flows.


Yes and 2 different labels usually denotes there is a differentiation between the 2 unless they are synonymous.

In which case I suspect you are wrong yet again(nice rationalization effort though) in not accepting the difference between income and consumption tax.

The 2 words have different spellings for a reason, figure it out!

You miss the point. Libertad is pointing out that a person in a higher tax bracket must make $1.38 and pay the tax on it to have $1.00 left to spend [consume]. In that sense, there is already a "consumption tax" based upon progressive income tax rates.

The traditional view of a Consumption Tax is that it is "added to the purchase price". It's also true that the Income Tax is a Consumption Tax which is paid *before* consumption.

Therefore, and in the sense that we ALREADY have a consumption tax.... let's broaden the tax BASE and lower the tax RATE for all by applying the tax AT the point of consumption rather than *before*. That way, the grey market "income tax tax dodger" will pay a consumption tax when he buys something at Home Depot.

 

[libertad]

Gnome...

Exactly..thank you...

And what I am further saying is that the US must view the world´s tax systems...and make the US tax system such that businesses will run to the US to place their business origins...

This in turn...will create again many of the losses that have been incurred...especially to the middle class....

Personally....Businesses and individuals like to control and own the highest percentage of their hard earned cash flows...

A 10% flat tax is a gamble in the short run to many because they can not readily identify the cash flows needed for their obligations...

However ..this is very similar to taking your signal for the trade...

A 10% flat tax in terms of growth and production is a no brainer....as compared to the current system....


Businesses and individuals are better job creators and wealth creators than the government...and far more efficient with money....

Excellent commentary all.....

 

[hans37]

Quote from gnome:

You miss the point. Libertad is pointing out that a person in a higher tax bracket must make $1.38 and pay the tax on it to have $1.00 left to spend [consume]. In that sense, there is already a "consumption tax" based upon progressive income tax rates.

The traditional view of a Consumption Tax is that it is "added to the purchase price". It's also true that the Income Tax is a Consumption Tax which is paid *before* consumption.

I'm trying to figure out how one is supposed to respond to such drivel.


If you want to declare that red is blue just because they both represent pigments knock yourself out.

 

[gnome]

Quote from hans37:

I'm trying to figure out how one is supposed to respond to such drivel.


If you want to declare that red is blue just because they both represent pigments knock yourself out.

Obviously, you don't get it....

 

[maxpi]

Quote from gnome:

You miss the point. Libertad is pointing out that a person in a higher tax bracket must make $1.38 and pay the tax on it to have $1.00 left to spend [consume]. In that sense, there is already a "consumption tax" based upon progressive income tax rates.

The traditional view of a Consumption Tax is that it is "added to the purchase price". It's also true that the Income Tax is a Consumption Tax which is paid *before* consumption.

Agreed. The collection process can be made more efficient in terms of man hours by using POS terminals to collect a consumption tax and nothing has to be divulged to the Federal Government in doing so. With a consumption tax there would be no "tax season". I like the consumption tax for those two reasons. The third reason I like it is that once people equate more government with higher prices in the store they will shrink the government. If we are soon to have 50% of all workers in the public sector then how the hell can we compete in the world? If we had 10% of workers in the public sector the other 40% would have to do something, perhaps productive and competetive, to get by.

 

[gnome]

Quote from maxpi:

Agreed. The collection process can be made more efficient in terms of man hours by using POS terminals to collect a consumption tax and nothing has to be divulged to the Federal Government in doing so. With a consumption tax there would be no "tax season". I like the consumption tax for those two reasons. The third reason I like it is that once people equate more government with higher prices in the store they will shrink the government. If we are soon to have 50% of all workers in the public sector then how the hell can we compete in the world? If we had 10% of workers in the public sector the other 40% would have to do something, perhaps productive and competetive, to get by.

Most states already collect a sales tax. It would be an adminstrative "no brainer" to add a line for "Federal Consumption Tax"... like the European's and Canadian's VAT.

 

[gnome]

Quote from gnome:

You miss the point. Libertad is pointing out that a person in a higher tax bracket must make $1.38 and pay the tax on it to have $1.00 left to spend [consume]. In that sense, there is already a "consumption tax" based upon progressive income tax rates.

The traditional view of a Consumption Tax is that it is "added to the purchase price". It's also true that the Income Tax is a Consumption Tax which is paid *before* consumption.

Therefore, and in the sense that we ALREADY have a consumption tax.... let's broaden the tax BASE and lower the tax RATE for all by applying the tax AT the point of consumption rather than *before*. That way, the grey market "income tax tax dodger" will pay a consumption tax when he buys something at Home Depot.

It's been estimated that there is $400 BILLION in non-paid income tax by those who don't file or otherwise evade income tax. If there were a Federal Consumption Tax, those folks would pay something whenever they bought goods and services.... an example of "broadening the tax base".