MagiK, et al, here's a simple example of how a sales tax system breaks down: DEDUCTIONS. Every tax system has them, they're inevitable. Why? Because Congress uses taxes to do 2 things:
1. Raise Money
2. Influence Behavior
Why do you think 50% of every gallon of gas and 80% of every pack of cigarettes goes to taxes? Why do you think business investments are encouraged and deductible (i.e. promote business spending, improve economy, etc.). Congress will NEVER be able to keep itself from using the tax code to influence bahavior.
With sales tax, the same deduction problem will occur. Especially for those who are wealthy enough and smart enough to set up little mini-corps for themselves that really own all their assets, but deduct for "business expenses."
I like the idea in theory, but I don't think it'll happen. Take this part:
Quote:
"On the business side, a consumption-based tax would scrap the complex depreciation system for immediate capital expenses. That reform would make U.S. businesses much more competitive in the world economy and create an investment boom that would drive Americans' wages higher," he said.
"On the individual side, a consumption-based tax could be arrived at by greatly expanding the Roth IRA and turning it into a Universal Savings Account. That would boost the savings rate and increase financial security for all Americans," Edwards added.
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That doesn't sound very "simple" and "under 500 words" to me, MagiK.
Note also the reservations some of the people interviewed in the article expressed. But, the most telling of all is the guy who made the point that the Gov. will get its money, like it or not.
[ 11-14-2002, 10:06 AM: Message edited by: Timber Loftis ]