"Joe" wrote in message oups.com...
What if you have 100 thousand dollars saved. It's worth 100 thousand
dollars. If they all of a sudden get rid of income taxes and put on a sales or "consumption" tax of 20% (that's the
minimum it will take BTW) your 100 thousand suddenly is worth only 80 thousand to you. You have just been taxed TWICE
on the same money. Can you live with that. Can your parents if you are young and don't have any retirement savings?
I failed to mention making existing retirement funds exempt.
It is not possible to do that. Do you know what a national sales or consumption tax is? Everything you buy has
a tax on it. Your income isn't taxed but your outgo is. It is possible to exempt some items like groceries, for
example. And it is possible to tax some items like luxury automobiles at a higher rate. However it is not possible
to exempt retirement funds.
A consumption tax is placed on money being spent. That's why you saved that retirement money -
so you can spend it when you are too old to earn any more. You've already paid income taxes on it. Now they
would tax it again - not just the small percentage of interest and capital gain but the entire sum total at
a 20% rate when you spend it. Double taxation plain and simple. Are you still for it? More importantly,
do you think the millions of baby boomers will be for it? It doesn't have a chance in hell of ever being
implemented.
I am asking this because I really think people don't realize what a consumption or national sales tax means
to them on an individual basis. The only way to do it would be to phase it in on new workers. They would be
the only ones required to pay it. And they would be exempt from income taxes. Over a period of about a
hundred years you could change the system over fairly. You just can't do it overnight or over a year or two.
The big problem with this, however, is it is not workable. Those workers would just give their purchase money
to a friend who was exempt to buy things for them.
Paladin
(Have gun - will travel)
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