🚀 go-pugleaf

In article <31C97EBA.1A69@jhk.com>, Chuck Smillie  <cvs@jhk.com> wrote:
>Gary Peterson wrote:
>> 
>> Ah, the "Let's give the rich even MORE money, screw the poor
>> and middle class" tax.
>
>Last time i looked at my "rich" friends ... they spend a lot of money 
>and buy expensive toys, some to avoid income tax. Seems to me that this 
>would hurt them more??? You apparently have been brainwashed to believe 
>that the current tax system is "fair" ... sad. I would want to have 
>defined "what is effected", ie is food exempt?? (that would not "screw 
>the poor") or is our Rolls exempt;-) first time sales or resales??? 
>
>The current tax system is too complex, the IRS is a huge, useless 
>department (cut it and you save a boat load). If you believe taxes are 
>used fairly ... it's a big money grab by a bunch of rich folks ... yes 
>even welfare, look at where welfare dollars go???
>
>Also, I hate to say this but the rich got there because they are smart 
>... whatever tax system is in place they WILL find a loophole or a way 
>to avoid the taxes. 

Let's postulate something that would IMHO be a good idea:


1)	SCRAP the entire federal tax system.

2)	Replace it with a federal consumption tax which has the following
	qualities:

	a)	The rate is 15% on all RETAIL purchases deemed "discretionary".
		No tax is levied on wholesale or "for resale" purchases (ie:
		this is NOT a VAT).
	b)	Exempt from tax are:
		. Food complient with Foodstamp guidelines (ie: McDonalds
		  DOES NOT count).
		. PUBLIC transportation (ie: CTA tokens and passes)
		. Transportation expenses deemed "non-polluting" or 
		  "renewable" (ie: parking for your bicycle at the office)
		. The first $1,000 monthly in rent or mortgage or equivalent
		  if the real property purchase is for cash. (allows any
		  rational family in any part of the US a livable place
		  to stay without paying tax)
		. Necessary public utilities (defined as water, electrical
		  power, and fuel for domestic use such as gas or oil)
		. Medical insurance premiums and direct fees for medical
		  services and prescription drugs.
	c)	Internation transactions are subject to the same rules,
		except that they are all deemed "retail" at the border. (If
		you're going to take goods OR funds out of the US, some part
		of that should remain here IMHO.  Excepting food and medical
		supplies and services is a good thing; if we can help feed
		the world I'm all for it)
	d)	Services are taxed identically to goods.
	e)	No other exceptions.

3)	Businesses account for and remit these taxes monthly to the federal
	government, and remit only on paid receipts (ie: tax liability
	accrues when money ACTUALLY changes hands)

Now, this one is simple.  If you're in a taxable line of work, you simply
take 15% of every dollar you take in and send it to the government.

Attributes that make this nice:

1)	Its hard to cheat.  Business could try, but unless you're in the
	business of providing food products (ie: a grocery store) there are
	darn few exceptions you can try to use.  Checks and other negotiable
	instruments HAVE to flow through a depository system, and those can
	be monitored for complience.  Take in $100,000 in checks as a
	business, and you had better pay at least $15,000 in tax!  No
	complicated complience measures or audits required.

2)	You will capture nearly ALL of the underground economy's funds as
	those people eventually buy something useful from the real economy,
	at which point the transaction is taxed.  No taxable revenue is lost.

3)	Its not regressive.  The poor will pay next to nothing, providing
	that they really spend their money (welfare or otherwise) on
	subsistence items (which is the point of this exchange, natch).  If 
	they *don't* do so, and choose instead to buy tobacco, liquor, 
	lottery tickets, McDonalds burgers or Great America amusement rides,
	they will be taxed *and should be*.  We do not owe the poor a free
	ride on *anything* they *choose* to do, but I believe we do owe them
	a break on survival if its feasible.

4)	There is a massive incentive to save and/or invest if you are in a 
	high income bracket.  That $50,000 car costs you $7500 in tax, but 
	the same $50,000 put into the public equities market costs you $0 
	in tax.  This is a powerful incentive to build the economy.  If the
	savings rate rises to 10% of the GDP as a result of this, the economic 
	growth engendered within a few years would dwarf any economic boom 
	the US has ever seen -- and is both sustainable and in a feedback
	loop (more production = more savings, etc).

5)	We can close the IRS; we don't need those forms.

6)	The average consumer needs to file nothing, keep no records, and
	substantiate nothing at all.  

7)	Charitable organizations will *flourish*, since there is no
	record-keeping requirement nor limit on the amount of money which is
	tax exempt when donated (ALL of it is!)  However, those organizations
	which spend their money on taxable goods (aha - back to what the
	"charity" is doing with their money, natch) end up getting "caught"
	by the tax system and pay their share.

Thoughts?

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