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Should a state opt for consumption taxes over income taxes?

  • More wealth, more spending. More spending, more tax revenue.

    The fact that more people will have money to spend from not being overburdened by income taxes will make them spend more on the goods that are taxed, which, if taxed across the board, from shampoo to cars, might create good revenue.

    Also, this excess in consumer spending might favor corporation, who will hire more and thus keep the cycle of riches going.

  • It will not be fair to the poorest people.

    If we went with just a consumption or sales tax, the poor would get hit even harder.

    A guy that is making $50,000 a year, is probably spending every dime he makes living paycheck to paycheck. At the end of the year he will have paid the same sales or consumption tax on 100% of his earnings. He had to do so to live.

    Now take a guy that is making $2,000,000 a year. He might spend $500,00 to live and invest the other $1.5 million. So he is only being taxed at 25% of his income.

    Fair? I don't think so. There has to be some sort of income tax or the people that are not being forced to live paycheck to paycheck will simply keep 100% of their money while the working stiff that is trying to make ends meet or someone on welfare will be taxed for every cent that comes in.

  • Yes but until a point

    If income tax would not exist at all one outcome will be that the richest will get even more rich than today. One person that has thousands or even hundreds of thousands the wealth of the average population will never consume thousands of times what an average person does.
    So my argument is : consumption tax only until some point , when a particular amount of annual income is surpassed an income tax should be applied.


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