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I've heard of a proposal to replace income taxes with consumption taxes. This way, the government wouldn't have an excuse to poke its nose into every citizen's
by csense 14y ago
I've heard of a proposal to replace income taxes with consumption taxes.
This way, the government wouldn't have an excuse to poke its nose into every citizen's private finances.
Unless you're running a business, paying your taxes is dead simple: When you buy stuff, pay the price that comes up on the register.
Of course, it punishes people who save money, because anyone with savings at the time the law changes would be taxed twice: the (pre-change) income tax they paid earning the money, and the (post-change) consumption tax they paid spending the money.
You'd think it'd be political suicide to propose something like this (and, indeed, despite the IRS's regularly topping the list of most-loathed government agencies, the consumption-tax proposal has remained well on the fringe). But consider: The US government's inflationary fiscal and monetary policies punish savers, too, and they get away with it. Clearly, living within one's means is only for losers.
- yummyfajitas 14y agoFun fact: the poor consume more than they produce, while the rich produce more than they consume. Thus, a consumption tax would hit the poor the hardest (proportionate to income), and are thus unpopular. Don't get me wrong - I personally favor them. Consumption taxes hit people in proportion to the benefit they receive from society. But they are a political non-starter for this reason.
- rdl 14y agoI think consumption taxes combined with a basic income/negative income tax (to replace other government assistance) are more politically viable than strictly consumption taxes on the first dollar alone. But then you have the "they're taking away your food stamps! your social security! and new taxes" etc., even though you're giving them net more money.