Consumption taxes are coming. It’s the only fair way to tax the people of this country and the only way to tax at the rate required to fund our government without driving away the capital needed to fuel the economy. Even the nations wealthiest philanthropist thinks so.
Bill Gates thinks the federal government should do away with payroll taxes and income taxes entirely.
via Bill Gates Fears ‘Robots’ Will Soon Take Over Many Low Skilled Jobs.
There is much in this article for me to disagree with (for one, giving money away and other methods of providing safety nets do not reduce poverty, they just blunt the hit for those finding themselves poor) but he does come to a conclusion that I’m fully in agreement with:
But the countries with really generous welfare states and social insurance systems, like those of Scandinavia, do not pay for them chiefly or solely with “soak-the-rich” income taxation. Progressive income taxes are part of the mix — but as Peter Lindert has pointed out, broad, relatively regressive taxes that fall on the middle class and working class, such as payroll taxes and the value-added tax VAT, a consumption tax, are necessary to fund governments that take a bigger bite out of a nation’s GDP without inducing capital flight — or even capitalist flight.
via Paul Ryan’s worst nightmare: Here’s the real way to cut poverty in America – Salon.com.
A consumption tax is going to be necessary to fund the government at the rate it is demanding that it be funded and not cause more capital to flee than already is taking place.
In the past even though Sen. Chambliss sponsored the bill in the Senate he has not seemed more than luke warm over enacting the FairTax. Now that 48% of Georgia Republican Primary voters have expressed their opinion that Sen. Chambliss isn’t conservative enough he is becoming more enthused about the idea.
“Now is the time to enact the FairTax, which would create a fairer, simpler tax code that allows every American the freedom to determine his or her own priorities and opportunities,” stated the senior Senator.
via Chambliss and Woodall press for FairTax consideration – Georgia Tipsheet.
The funny thing to me is that I’ve never looked at the FairTax as being especially conservative in nature.
I have been a fan of Rep. Ron Paul (R-TX) for quite some time. I have also been a fan of the FairTax proposal for the last couple of years. I never knew where Rep. Paul stood on the FairTax so I asked him. This was the email I just received from him:
Dear Mr. Burton:
Thank you for contacting my office regarding the FAIR TAX. I agree with you that massive tax reform is needed in this country. More specifically, I agree with the provisions of the FAIR TAX which repeal income, payroll, and estate taxes.
As you may know, it’s not easy for me to advocate any new tax! However, I certainly think a sales tax is better than an income tax- PROVIDED the income tax is truly eliminated. I would hate to see America end up with both a national sales tax and an income tax, much like socialist European countries.
However, the real key to tax reform is dramatically reduced spending by the federal government. Until the government spends far less, taxes (in whatever form) will remain too high. While I certainly support eliminating the income tax, I do not want to see it replaced with a high national sales tax which attempts to collect the same amount of revenue. Spending is the real problem.
Please understand that we share wide areas of agreement on tax issues. I will continue to consider the Americans for Fair Taxation plan. Proponents of real tax reform (whether they support a national sales tax, flat tax, or other plan) must unite in their efforts to eliminate the present unworkable income tax structure.
I’m pleasantly pleased. Rep. Paul is not a resounding supporter of the FairTax but he is inclined to support it as long as certain guarantees are in place and, of course, he believes the only true tax reform will come from reducing government spending, his trademark cause.
I don’t know if ya’ll have figured this out yet or not but I fully support the FairTax. When talking to people about the FairTax one of the questions that comes up that I just don’t have good answers for is on how it will be enforced. Brad Warbiany gives us a good explanation here.
Common in the FairTax debate are the questions of avoidance and evasion. Due to these incredibly common questions, and the fact that the answers are not easy to find (even in The FairTax Book), I hope to give a full accounting here.
First, allow me to clear the air. I don’t believe that the claims that this will be collected and enforced by the state sales tax agencies to hold one iota of water. To the extent that some of the actual collection may be done this way may be true, but true enforcement will be handled by the feds. You see, the federal government can’t force states to collect the tax. States which choose to do so will, but any state which doesn’t opt into the “administering state” guideline will have the FairTax administered by the feds (HR 25, secs 401-404,).
I’ve studied the FairTax a good bit and this was very enlightening even to me. I hope you can benefit from this information as much as I have and I hope you are contacting your federal representatives and asking them to join the other legislators who have put their names on HR25 and S25 as co-sponsors of this bill.