Sauwan
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While I dislike the concept of the FairTax for a few reasons, I was wondering what people thought of something like an Expenditure Tax.
Proposal for a Consumption Expenditure Tax
Essentially you're taxed on your *Expenditures* - *Deductibles* after every fiscal year. This means people get to keep all of their pre-tax income, and there will not be any sales tax. However at the end of every fiscal year citizens will be required to pay a tax on what they effectively spent. I'm assuming the government wouldn't require it in a lump sum which would create massive problems for people who didn't plan ahead, but this isn't what I'm concerned with.
With this style of taxation, the major problems with the FairTax, IMO, are avoided. We can continue to have a progressive tax bracketing system depending on how much a person spends (or even more attractive would be some form of logarithmic scaling with a ceiling so that there aren't any "jumps" in the taxation. This would be feasible with the advent of the computer age. It seems if the government made a tax preparation system available to the public via public computers/accountants that could do the integration of the logarithmic curve to determine a persons overall tax dues, this wouldn't create major problems and even might simplify the IRS) which won't cause the massive disparities between rich and poor that one sees with the fair tax.
If it were possible to slowly phase this in with a suitable collection system, would you be for or against something like this? I'm assuming it has it's problems largely because it hasn't been discussed much. (with the exception of the USA tax back in '95) What problems can you see with it and can you foresee a viable solution to that problem?
Proposal for a Consumption Expenditure Tax
Essentially you're taxed on your *Expenditures* - *Deductibles* after every fiscal year. This means people get to keep all of their pre-tax income, and there will not be any sales tax. However at the end of every fiscal year citizens will be required to pay a tax on what they effectively spent. I'm assuming the government wouldn't require it in a lump sum which would create massive problems for people who didn't plan ahead, but this isn't what I'm concerned with.
With this style of taxation, the major problems with the FairTax, IMO, are avoided. We can continue to have a progressive tax bracketing system depending on how much a person spends (or even more attractive would be some form of logarithmic scaling with a ceiling so that there aren't any "jumps" in the taxation. This would be feasible with the advent of the computer age. It seems if the government made a tax preparation system available to the public via public computers/accountants that could do the integration of the logarithmic curve to determine a persons overall tax dues, this wouldn't create major problems and even might simplify the IRS) which won't cause the massive disparities between rich and poor that one sees with the fair tax.
If it were possible to slowly phase this in with a suitable collection system, would you be for or against something like this? I'm assuming it has it's problems largely because it hasn't been discussed much. (with the exception of the USA tax back in '95) What problems can you see with it and can you foresee a viable solution to that problem?