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Originally Posted by moosenose
If the rich don't spend their money, why should they be taxed on it?
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This is an excellent point regarding the switch to a consumption-based tax system.
Right now, out tax system hinders savings, at the personal level and at the corporate level. The rate of saving and economic growth are closely tied together. We need to remove the stumbling blocks to ensure a healthy future for our economy.
One of the ideas behind a consumption tax system is that you don't get taxed until you actually spend the money. Contrary to popular belief, money that is saved is not stuffed under matresses, it is put somewhere; stocks, bonds, accounts, IRA's, etc. or re-invested in a company to buy more land, more buildings, more people, etc.
Removing the components of our current system that hinder savings and investment will do nothing but help our economy. Not to mention the "new" money that companies and individuals will have because they are not spending time/moeny on tax compliance.
-6.1 billion man hours are wasted each year for tax compliance activities. This represents a true net loss to our economy. Anyone care to guess what this figure equates to in dollars?