Quote:
Originally Posted by Derwood
consumption tax would unfairly burden the poor as well
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It depends on how you structure the tax. For example, we could exclude taxation on a family's first $25,000 of consumption. We could exclude taxation on food, shelter, day care, clothing, medicine.
With our current tax structure they get so creative that it takes experts to fully understand the tax code (and those experts really know how to exploit the tax code - without breaking the law), I would argue for simplicity but we could apply some creativity to not overly burden poor people. And I would really love for the folks in the "underground" economy pay their fair share.
---------- Post added at 05:19 PM ---------- Previous post was at 05:02 PM ----------
Quote:
Originally Posted by dippin
The funny thing about proponents of a flat tax or even of consumption tax is that most of them believe that they would pay less taxes if that system was approved. Even just to maintain current revenue levels (which still leave behind a huge deficit), everyone except the richest 5% or so would see a very large increase in how much they pay in taxes.
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I don't have a problem with paying taxes. I just want to do it in a manner that makes sense, and in a manner that is simple and predictable.
For example, and I don't know if it is still true, but at one point if you purchased a vehicle with a weight of over 6,000 pounds (big SUV's, trucks, etc.) used for business you could take a deduction for the value of the vehicle in a single year, but you could not do that for a fuel efficient car. So, back in the 90's when everyone was buying big SUV's, many did so simply because of the tax advantages. In my view if you use a vehicle for business they all should be treated the same way. Our current tax code is loaded with this kind of stuff, the "rich" take advantage of it, most everyone else can not.
Another example involves year-end tax planning that most of us have to do: Did you use the money in your pretax medical account? Did you put in the correct amount in your IRA/401(k)? Do you need to defer income to avoid the loss of a tax credit? Do you need to buy tools to hit the minimum for your misc. deduction? Do you get divorced before the end of the year or wait until next year? Do you induce labor on New Years eve, or wait? It gets crazy.
