🚀 go-pugleaf

In article <4qcb1i$s8n@Venus.mcs.com> karl@MCS.COM (Karl Denninger) writes:
>2)	Replace it with a federal consumption tax which has the following
>	qualities:
>	a)	The rate is 15% on all RETAIL purchases deemed "discretionary".
>	b)	Exempt from tax are:
>		. Food complient with Foodstamp guidelines (ie: McDonalds
>		. PUBLIC transportation (ie: CTA tokens and passes)
>		. Transportation expenses deemed "non-polluting" or 
>		. The first $1,000 monthly in rent or mortgage or equivalent
>		. Necessary public utilities (defined as water, electrical
>		. Medical insurance premiums and direct fees for medical

>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.

Do you have any idea how much money is left after those exemptions?
I strongly suspect that unless an enormous amount of cutting of 
spending takes place, your 15% tax will be inadequate.  Of course,
I'll be the first to call for cutting all that spending
first... Moreover, OASDI, a separate payroll tax item from the
federal income tax, needs to be addressed, too.  For lots of folks,
that is costing them more than income taxes.

>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.

Lots gets lost in black market transactions - the higher the tax,
the larger the black market.  Eventually, perhaps after several
such transactions, a taxed transaction takes place, but lots of
transactions would get missed.  

>3)	Its not regressive.  The poor will pay next to nothing, providing
>	that they really spend their money (welfare or otherwise) on

This is true, but I would counter with the potential problem in
politicking for inclusion in the list of exemptions.  Everybody
has a product they think is essential and deserves to be exempt,
from phones to computers to twinkies to caviar.  I'd probably limit
it to uncooked, dried beans and rice and that's it.  By opening
up the field to utilities and medical care and lots of non-essential
food items, you are cutting your tax base enormously, and the
potential for lobbying and politics defeats half the purpos of
the reform in the first place.

>Thoughts?

Mostly pretty good.  Well done.  One more issue, though --
don't even consider legislation which does that which you
describe unless it is contingent upon passage of the repeal
of the sixteenth amendment.  Else we end up with your sales
tax in addition to an income tax.

--D
-- 
dmeyers@panix.com

"Any technology distinguishable from magic
 is insufficiently advanced."