Actually tax revenue would increase even more at 10%...10% than 15..15 ,,,and would dwarf the tax revenue taken in today... Evasion...the IRS...and many add ons to prices would dissapear...and the multiplier effect of this difference would arise...furthermore every country in the world would want their business done in the US....This is how the US would dwarf Europe and the EU ...and developing countries...would always be developing.... All the money in the Caymans etc.. would come home and the fearsome IRS system would be eliminated... US citizens would actually embrace the US even more and bypass most of the current worrisome issues on everybodys minds..
Okay let's get to some of the real reasons for people opposing the consumption tax. Please note I'm not offering the intellectual excuses people are enumerating. Wealthy people : are not going to be inclined want a tax on their consumption when the current system places very little burden on them. People who have already accumulated their lifetime savings: these people might oppose the consumption tax for much the same reason a wealthy person may oppose a consumption tax. Additionally these people will be correct in pointing out that they are double taxed both in the earning phase of their life and in the consumption phrase. Next we have all those people who have a vested interest in things remaining the same IE tax lawyers and accountants politicians , lobbyists, etc. etc.. Then of course you have the ideological opposition who want to continue to subsidize the poor thinking it'll go away. This last group is only one that has no merit to their opposition but is most likely to thrive upon an errant propaganda machinery targeted at the ignorant and lazy.
You would still need and IRS system to collect the sales tax and the capital gains tax. I agree it would be a scaled down and simpler method. Most of the money offshore is there to aviod capital gains tax not income tax, and is already actually illegal. I don't see how that would change. If the Fed takes a net 29% of my total income every year, do you actually think they will settle for a possible 15% max. I think your plan has merit and believe it could work but it will never be a political possibility.
That is the whole point. No exemptions with a flat tax. NONE. It would have to be phased in though, especially due to the millions of families that already own homes with the write off to help with the mortgage. You HAVE to have exemptions with a consumption tax so that the poor are not taxed unfairly for food, etc. Where do you draw the line on what is, or what is not an exemption? Go flat, not consumption.
I mostly agree with your points. And while no major change can occur without someone being disadvantaged, we've got lots of people who are disadvantaged right now. I don't think it's fair that the lower income earners receive most of entitlements while paying for little or none of it.... Nor is it fair that those making $10s Millions or more skate through offshore loop holes. That leaves the entire burden to fall on those in the middle.... schmucks like you and me. We need to choose the lesser of evils and what's best for the country.
Okay let's get to some of the real reasons for people opposing the consumption tax. Please note I'm not offering the intellectual excuses people are enumerating. Wealthy people : are not going to be inclined want a tax on their consumption when the current system places very little burden on them. Would rather pay $1.38 vs $1.15 ?? People who have already accumulated their lifetime savings: these people might oppose the consumption tax for much the same reason a wealthy person may oppose a consumption tax. Additionally these people will be correct in pointing out that they are double taxed both in the earning phase of their life and in the consumption phrase. AGE 65...15% is close ...where´s the diff ??? Next we have all those people who have a vested interest in things remaining the same IE tax lawyers and accountants politicians , lobbyists, etc. etc.. Fuck em !!!!!!! Then of course you have the ideological opposition who want to continue to subsidize the poor thinking it'll go away. This last group is only one that has no merit to their opposition but is most likely to thrive upon an errant propaganda machinery targeted at the ignorant and lazy. Many many jobs will be created....and complaints will fall....
"The current system places very little burden on the wealthy" are you insane. The top 5% of earners pay well in excess of 50% of total taxes. This doesn't count estate taxes, when that transfer of wealth happens the number is much higher. I am sorry but you are the one who has bought into all the propaganda.
Mr. maxpi, that's a 10. We read every day that the trade imbalance is killing the U.S., uncontrolled money supply growth in the form of U.S. debt (foreign reserves). At a macro level, the consumption tax is just what we need, (or needed 25 years ago). The consumption tax would force savings, and discourage spending. The fact that so many people think that a consumption tax couldn't be implemented is just evidence that people want only painless solutions to this massive problem. And for anyone who wants to believe that debt can spiral uncontrollably, not get paid or get paid in devalued dollars, get a world history book. Sh*t happens.
Look...the point here is that you already have a consumption tax... When a person pays for something....he has to earn over the amount of the item to buy it... A wealthy person has to earn $1.38 for every $1.00.....and more modest income individuals has to earn $1.21 for every dollar...and so on... The 10 to 15 consumption tax....and the 10 to 15 long term cap gain tax applies to everyone and is not applied to investment vehicles such as stocks or bonds because you do not consume them....LT capital gains do apply.... The richer you are the more LT gains you pay....something the poor never pay but benefit from through government works... This is not rocket science...
Hey, I'm not a jealous guy (I'm not going to storm the Bastille), but I have to disagree. The operative word, and you use it, is <b>earn</b>. Most weathy people do not pay massive payroll taxes (earned income). They get large portions of their income from long term cap gains, qualified dividends, and municipal bond interest. As far as 706/709 taxes (Estate and Gift) go, the argument is that a large portion of assets in Estate inventories has never been taxed during the decedents lifetime (eg large equity positions held until death). If not for the 706, rich families could build dynasties (which they did before the 706 was enacted in 1917). (As an interested aside, the 706 was enacted to help defray the cost for US participation in WWI. It was considered that the most to gain/loose by the outcome of WWI would be the Rockefeller/Vanderbuilts types. Makes some sense.) I remember when Ross Perot ran for President, his disclosed Muni bond port was in the $100's millions. Paying his fair share?