Quote:
Originally posted by Mmmm, Burger (C.J.)
I don't think what I've been saying is necesarily in tension with any of your goals. You seem to be stuck on the idea that consumption tax=flat tax. That's not necessarily the case. That may be the cheapest to administer (or it may not), but one could use the current income tax system but shift the tax burden to those who consume, and particularly those who consume a lot, and have it just as progressive as the current scheme (although, sure, it would benefit those who save more than those who borrow for consumption).
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I can see a lot more danger of unintended consequences if we get into a consumption tax that allows for targeting. A higher rate for the purchase of luxury yachts? Caviar tax of 40%? The social engineering aspects - at least, the possible abuses of them - are staggering. Plus, the tracking system is harder. I can spend my money at a lot of private outlets that don't have the pressure to report as does an employer who must report the payment of compensation in order to get the tax break associated with the payment of an expense.
