Consumption Tax

All governments should move to a consumption tax. See FairTax in the US. At least in the US, the founders did not envision being taxed on income. In fact, that power was granted later. The income tax code is way too complex costing trillions of dollars for compliance. Eliminate the tax code, implement a zero percent income tax, zero percent corporate tax, zero percent tax on savings and investments, zero percent payroll taxes and zero percent estate tax. Many people will say corporations should pay tax. Problem is, who pays a corporations taxes? Consumers! Businesses have to pass on the tax costs in the form of increased prices or else they go out of business.

Primary benefit here is consumers keep their whole paycheck encouraging the right incentive of saving and investment.

Yes, the consumption tax rate would have to be high to be revenue neutral. The FairTax estimates it would need to be 23%. However, this should be more than offset by removing all the other taxes from the supply chain, reducing the compliance costs. In addition, there would be increased tax revenue from consumption (tourists, illegals, and criminals). These groups don't pay taxes today.

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  • I object because this would put a flat tax (not a fair one) and halt the (dare i say it?) redistribution of wealth, which, like it or not, is crucial for true social justice. Taxes make people do their fair share according to revenue. It is normal for those who make more profit to contribute more to the system, for the simple reason that they 1-are capable of doing so and 2-have a moral obligation to give part of their profit to society.

  • A consumption tax is brilliant move. If you don't want to pay taxes, consume less. If you consume more, you pay more. It is the easiest set of taxes to collect and it does not penalize the individual for being more productive or earning more income. For those that need a helping hand, offer credits of some sort, but only for a short time period. Or another option might be that they credits just zero out any owed taxes, however, you do not get a refund of money that you did not pay in. That is the craziest part of the American system. You can get a refund even though you did not pay in to the system tax money.

  • would like to hear the rules here first

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