Why a consumption tax is better than an income/capital gains/corporate tax

Aug 2010
211
40
Cliffside Park, NJ
#21
MYP, I too am a proponent of a general consumption tax that would to whatever extent feasible replace our income taxes.
Refer to the first two messages of the discussion:
http://politicalfray.com/economics/1821-fair-tax-can-only-passed-incrementally.html .

Fair tax proponents that insist our entire major tax revenue source be transferred in a single step are insisting that the fair tax shall never be passed by the U.S. Congress. The tax sources must be transferred simultaneously but in incremental portions. It would be highly imprudent to enact it all within a single step; multi steps allow any glitches to be corrected.

Sales taxes are not regressive but they are flat rather than progressive. They can be drafted to have to a limited extent some progressive attribute.
Refer to the following message entitled “Drafting a more “progressive” general sales tax”.

I’m a proponent of the VAT method of sales tax; refer to the discussion thread entitled
“Value Added Tax, (i.e. VAT) a particular and superior sales tax method”.

Respectfully, Supposn
 
Aug 2010
211
40
Cliffside Park, NJ
#22
Drafting a more “progressive” general sales tax.

Drafting a more “progressive” general sales tax.

There’s a limit to drafting a more “progressive” general sales tax. Beyond some extent of tax waivers, governments’ purpose of gathering tax revenue is severely lost.

The purpose of progressive taxation is also advanced when government services equally or more favorably serve poorer persons. Free public education and subsidized public transportation are examples of this concept.

If we should waive sales taxes upon selected items that are a greater proportion of lower rather than higher income earners’ expenditures, or waive taxes upon capped threshold of selected items’ prices, (although the general sales tax has only a single tax rate) those waivers and caps would effectively create a less neutral and to a limited extent a more progressive sales tax.

For example, sales taxes upon medicines, and non-restaurant or catered food items could be entirely waived.
We could waive sales taxes upon the first $5 per person per trip on public transportation, or the first $75 per month per primary residence for each classification of utilities, (i.e. gas, electricity, water, sewage, and communication lines). Such thresholds of price amounts waivered should be annually cost of living adjusted).

Respectfully, Supposn