
Originally Posted by
billyjeff2
I beg to differ. The price of goods would go up considerably, since we'd have to replace all the revenue generated by taxing income by taxing all consumer goods. This wouldn't be a nominal 1% or 2% tax. And all the folks at the poverty level or near the poverty level or struggling to get by, who don't pay income taxes under the present system, would lose heavily under a flat tax system--which makes little sense. Unless you want to subsidize them, but that essentially negates the point of a flat tax. This is exactly why the flat tax idea hasn't taken off, despite it's superficial appeal of being equitable. And again, if you tax consumption instead of income, you'd end up with a wildly fluctuating, highly unpredictable revenue stream which would severely hamstring the government. A downturn in consumer spending due to a recession like we're currently experiencing would sharply curtail tax revenue. You can't operate a government with that type of economic uncertainty. Perhaps this explains why so few countries have adopted this idea. Finally-while I agree with the general idea that the wealthy would typically spend more than the less wealthy, a flat tax would be an economic windfall to the rich and the very rich-their tax liability would be far, far less compared to what they pay under an income tax system. But hey--if you want to pay more taxes so the rich and the very rich can keep more of their money, go to it.