It does nothing to address the unequal distribution of income and it would drive manufacturing offshore.
Which is exactly what's happened every time a consumption tax is implemented.
You don't have to look no further than the destruction that was caused by Bush I's luxury tax back in the late 80's.
For example, the tax hammered luxury boats with a 15% tax and the result was that most of the boat manufactures in south Jersey relocated offshore to lower their input costs to offset the tax.
It wasn't until after that industry was destroyed that the tax was repealed and the industry hasn't recovered since.
That aside, the stipend for those at the poverty end of the scale only reinforces inequality. The inputs will invariably gravitate to the cheapest and least healthy food staples to compute the stipend.
The result is the poorest can only afford the poorest food choices while healthier alternatives like organic produce and steroid-free, range-fed meats become accessible only to the more affluent.
The end result is higher overall health care costs.
It also forces manufacturing to bifurcate their product lines into cheap and expensive products. Cheaply built products don't last as long so you actually end up with a regressive repurchasing tax for the less affluent.
Any equitable system should allow for the benefits of success but try to limit the opportunity of succeeding at the expense of others.
You can drive out poor quality choices by having a system that ensures that good food and well-built products can be sold to the widest audience possible.
Compensation reform that indexes upper management's pay to the lowest paid employees is the best way to do that.
Eliminating stock dividends forces management to distribute those profits equally to their labor instead of unequally to their shareholders.
The loss of that income stream for those on a fixed-income could easily be offset by an additional class of treasury securities for retirees that offer higher interest payouts. It would also protect their capital better than the stock market could.
Township tax management is a better management concept than management by someone who has no local hands on experience...
Experience is accumulated over time. But, experience does not necessarily result in competence, which is the most important of all management qualities.
However, none of that overcomes the problem of scale. You can already see the issues today with school and property taxes. Smaller municipalities cannot afford all of the services that larger ones can afford.
It's why we have neighborhoods that the more affluent gravitate towards.
In a township government....one approaches a truer democracy than the the lobbysist/2 party system...
Which is why the founding fathers only made our system a representative democracy at the federal level. They left it to the individual states to implement direct democracies within their state constitutions, and most have.
Furthermore the government should outlaw the possibility of any IRS like structure to ever appear again on its sovereign ground....
Excuse me, but a flat consumption tax is still going to require a branch of government to manage and enforce it.
Then the rest of the world would follow....or all of the world's best companies would flock to the US....leaving other countries void of tax revenues.....
It's not that simple. You can have the best regulatory and tax environment in the world. But, none of it matters if the fully burdened costs of labor and raw materials result in lower net profit.
