Incomes up for upper class and rich, down for middle class...

[Mr Khan]

SamuelRSmith said:

sethnintendo said:
Yea that is why I am starting to like the consumption tax more and getting rid of the IRS.  Politicians can just use the IRS and their tax code to further fuel the "class warfare".  If we just paid tax on whatever we bought (and got reimbursed for basic necessities like food) then this would be more fair.  At first I wasn't really into the idea but then I read Fair Tax book by Neal Boortz.  While I didn't agree with everything in his book (and I actually highly dislike him and his radio show), he does make a compelling argument about setting USA up to become once again a manufacturing leader, etc... by getting rid of corp taxes, etc.. by switching to a consumption tax.

While a consumption tax is slightly better than income tax, it's still a piss poor option. First, you have the (same) moral problems with the Government's right to tax, as it's an infringement on property rights (property rights include the right to exchange property... with a consumption tax, the exchange of property won't be legal unless the Government gives you permission, and you pay a fee to gain that permission. That isn't a right, that's extortion).

It's also open to as many loopholes as income tax. Lobbyists will be trying to get their products classed as "neccessities", activists will be trying to get certain taxes raised higher (for environment, health, "protecting our children", etc. reasons). The system will inevitably be geared to suit the exact same people that the current system is geared towards.

Ultimately, what a consumption tax leads to is MORE Government control over your life. It destroys property rights, and allows for the Government to control the prices of the things it doesn't like, and reduce the prices of the things its friend's like.

The problem with the consumption tax is while it sifts for revenues not made in America (fixing the problem of tax-haven corporations by simply forcing them to either pay the tax or not sell products in America at all), it is also a regressive tax and ends up hurting the bottom far more than the top.

More stringent progressive taxation is needed. Restore the payroll tax when hiring picks up (because no-one is going to hire someone that they wouldn't have been able to hire if it weren't for the payroll tax cut, unless we're talking about short-term employment), then destroy the Bush tax cuts. Streamline the military industrial complex by rewiring our defense strategy (the Cold War is over, yet the positioning of so many bases over the world leaves the other impression), and also by changing military procurement procedures to be more competitive, and plow that saved revenue into human welfare: health, social security, educational grants, scholarships. As human welfare improves, the need to spend as much on human welfare will ironically shrink, and in the long run less spending will be needed on matters of human economic rights.