But if the poor can't afford it, with a consumption tax they pay nothing at all. And you can choose to tax some goods more than others (yachts vs. nursery cribs) or not at all.
My preferred tax has some major problems, though. Currently, welfare still exists in the form of the Earned Income Tax Credit and other incentives for the poor that can give them a bigger refund than the taxes they paid out. A consumption tax would make any attempts to actually give money to the poor have to be separate from our taxation system, which would maybe be more honest, but would be far less likely to exist. Not to mention, a consumption tax suffers the same problem as a pure "Flat" tax -- no way to get the public to do what you want through tax incentives.
(no subject)
Date: 2007-05-24 01:27 pm (UTC)My preferred tax has some major problems, though. Currently, welfare still exists in the form of the Earned Income Tax Credit and other incentives for the poor that can give them a bigger refund than the taxes they paid out. A consumption tax would make any attempts to actually give money to the poor have to be separate from our taxation system, which would maybe be more honest, but would be far less likely to exist. Not to mention, a consumption tax suffers the same problem as a pure "Flat" tax -- no way to get the public to do what you want through tax incentives.