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Originally Posted by thingstodo
A sales tax that is the only tax would force everyone spending to pay a tax on what they spent. Don't spend it and don't pay taxes. No deductions for anything. Make companies pay taxes for everything. How much simpler can it get?
And kutulu...it's a sales tax so you don't get taxed on what you make, only on what you spend. How could it shift the burden to the poor and middle class? Everyone spends money and the rich spend the most!
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Well, it would certainly have an effect on poor families with lots of children. Instead of being able to deduct income tax for each children, it seems to me they'd end up paying more taxes because of the sheer amount of stuff they have to buy to support a large family.
I think the only way this could possibly work is if there was a MUCH lower tax on commodity items compared to luxury items. And to the point kutulu made about retirees, I think this system would have to somehow be grandfathered or phased in... it would be too big of a culture shock to switch over all at once.