Quote:
Originally Posted by kong
The fair/consumption tax would also hurt non-profits. If people don't get a tax break for making charitable donations, do you think they will still do it? A majority of the people probably will because it is the right thing to do, but a lot of the donations will dry up.
Also the fair/consumption tax is not really that fair. It still taxes poorer people more than the wealthy. With savings rates where they are, a middle class family of four probably consumes most of their income or even more than their income if you toss on credit cards. So they will essentially pay taxes on all of their income.
On the other hand, the wealthy don't proportionally consume as much as middle class or poorer individuals. They spend more in terms of dollars but as a percentage of income, they consume less. The majority of their income is reinvested in assets to produce even more income. So the rich will still get richer, they just will not pay taxes until they spend their money.
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Good points Kong. If essential items such as gas, food, clothing, etc were excluded as most proposals I've seen suggest, do you still feel that such a tax would disadvantage the working poor? Seems to me that it would sock it to the folks who have a lot of disposable income for luxury items (Ack, like scuba gear?) You are right though, it won't pass, so I'll stop wanting income taxes to go away and just ante up my 70-90 K every year.