Federal Consumption Tax

[stevenstevensteven]

Monday I turned on C-SPAN in time to catch the tail-end of a talk by David Walker, US Comptroller General, to the National Council of State Legislators (NCSL).

Walker seemed to be making the point that revenues are not sufficient to cover expenses, therefore, the gov't should be looking for ways to increase revenues. Walker's final point was that the US is heading toward the adoptioin of a Federal Consumption Tax.

As I'm a newbie, I can honestly say I don't understand why we would want to adopt a Federal Consumption Tax. This seems to be the trend globally. Can someone shed some light on why we might be heading in this direction.

Thanks in advance.

[blazespinnaker]

Beware, rant ahead:

Well, I think it's a somewhat philosophical point perhaps, but my philosophical (I am *not* trying to be a troll here, really) opinion is that consumption of anything but necessities (food, shelter, clothing, education, and health) is an irresonspible utilisation of your wealth.

In fact, consuming beyond your necessities is destroying the world commons (ie, the environment) and we need to have revenue to pay for the saving of said environment. A consumption tax is a great way to get the appropiate revenue to do so.

In fact, I would really wish they'd get rid of income tax, capital gains tax, etc, and completely put all the tax in the consumption tax.

People should not be taxed for generating wealth, that's really dumb (IMO!), but should be taxed for consuming the world's resources.

That beind said, the obvious economic reason not to do this is that this pushes economies into blackmarkets, people simply avoid governments and transact person to person (think eBay), to the point where retail can't even compete very well. The other problem, of course, is that it hurts the most important part of our economy, consumerism.

All that being said, we need to move the world to a culture where generating wealth, health and enlightment (ie, education) are our goals in life and not, for goodness sakes, shopping or collecting toys.

Anyways, that's my little rant for the day. I hope I don't offend anyone.

[blazespinnaker]

Check it out!

http://www.yahoo.com/s/292971

[Jim Nickerson]

blazespinnaker made some good points about consumption taxation.

Someday, I believe, currency will be removed as a method of exchange. Its replacement will be the equivalent of a charge charge with biometric identification capability. All people will have electronic accounts, and the only way to make transactions will be by use of the card or the use of some sort of a check. If checks are used, they can only be transacted by the person to whom payable and credited into his/her electronic account.

The goal of all this will be to stop all the crime that is associated with cash. You won't be robbing 7-11 stores unless you want to haul out its beer. You won't assault people because all you can get is their jewelry which will be useless unless you can barter with it. You cannot buy illegal drugs without it being traceable. You cannot buy a lady of the night without it being traceable, and she cannot fail to declare her income.

What a cashless society would do is elimanate a whole lot of crime. All those who would protest this as some sort of invasion would, in my opinion, be looking out for their freedom to do things with money that probably should not be done--they would scream invasion of privacy. Privacy is great when you are using it to fool the government when it comes to paying taxes, or to fool your wife about how you are giving your money to your girlfriend, otherwise there is little need for privacy.

A consumption tax is the only tax that makes any sense, but for it to work, the weaknesses in it must be foiled. Cashless electronic transactions would do this. I think it would stop big time crime, except that occurring under the guise of Wall Street, probably stop loss of taxes on all the money that goes to moneylaundering from illegal activities.

Of course, for something like this to ever get off the ground, one would need to exterminate all tax lawyers and accountants who currently live off the convoluted tax code--this would be done to keep them from paying off the lawmakers not to pass the laws.

But later on, even bribery would disappear as it would be traceable.

Maybe in 100-500 years, if we still populate the planet, this will happen.

Jim