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How do you feel about a national sales (consumption) tax?

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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:47 PM
Original message
How do you feel about a national sales (consumption) tax?
Apparently, Alan Greenspan seems to think that it might be a good idea.

<snip>
Greenspan pointed out the merits of a "consumption" tax, as well as the challenges of setting up such a tax. Consumption taxes can take the form of national retail sales taxes (search) or a value-added tax, imposed on the increased value of a good or service at each stage of manufacture and distribution and ultimately passed on to the consumer.

"As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth — particularly if one were designing a tax system from scratch — because a consumption tax is likely to encourage saving and capital formation," Greenspan said.

"However, getting from the current tax system to a consumption tax raises a challenging set of transition issues," he added.

<endsnip>

Sorry about the source, but more is here
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imenja Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:50 PM
Response to Original message
1. it's a regressive tax
That disproportionately and unfairly taxes those who earn the least.
I oppose it.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:51 PM
Response to Reply #1
3. Explain, please?
Edited on Sat Mar-05-05 07:54 PM by Blue-Jay
I'm not opposed (in principal) to a national sales tax, provided that it's applied fairly.

Edit:speeelung
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benddem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:55 PM
Response to Reply #3
6. rich people have money
for all the stuff they need. They don't need to spend their whole salary on subsistence. Poor people spend all their money on food etc.
This would all be taxed. This does nothing but widen the rich/poor differences.
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TexasBushwhacker Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:01 PM
Response to Reply #6
13. I would assume that certain things would not be taxed
Groceries, for example. The poor spend most of their money on housing and food. If these things were not subject to sales tax, most of the sales tax would come from spending on non-essential items.

That being said, I wouldn't want to be the owner of a restaurant or a video store or any other business that had to charge a national sales tax on top of whatever state and local sales tax they charge. Any business that depends on discretionary dollars could be hit hard.
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imenja Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:05 PM
Response to Reply #13
18. you are mistaken to make that assumption
If they don't tax food and housing, they lose most of their tax revenue, since that is where most of our income is spent.
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amazona Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:45 PM
Response to Reply #13
49. well that's the wrong assumption in my state
Edited on Sat Mar-05-05 08:46 PM by amazona
Food is taxed. Drugs are taxed. Your car, which you have to prove you have to get a job, is taxed. It is all taxed.

Sales tax in my parish is 9.85 percent!

What are we supposed to do, commit armed robbery every time we need to buy something?

We can't tolerate any further increase in sales tax.

People who think consumption tax will replace income tax are too stupid for words. It will be on top of, not instead of. One look at the deficit tells the tale.

This proposal is plain theft. It is time to dig in our heels and refuse any further taxes while we are paying for an unjust war and talking about cutting Social Security payments. Pay more to get more dead soldiers and more dead old people?

Read. My. Lips.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72



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Clark2008 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:52 PM
Response to Reply #13
58. Food is taxed in my state, too
And, we don't have an income tax.

Can you imagine buying a car - even an older model - which is necessary to get to and from work here, at least - with a 9.5 percent state tax PLUS whatever a national sales tax would be?

No one in Tennessee, but the wealthy, would be able to own a car again.

I think a national sales tax is not only regressive for poor people, but also for retailers (employers).
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TexasBushwhacker Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:11 PM
Response to Reply #58
62. Only prepared food is taxes in Texas
ie. food in restaurants and fast food joints, not groceries.

I'm not saying that I'm sold on the idea, but I think the principal of a national sales tax is that it would be more like a luxury tax, as someone else pointed out, and it would REPLACE the income tax. One thing it has in its favor is that it would tax the people that are part of the underground economy; those who work for cash, drug dealers, etc. Those who consume the most would pay the most tax under a national sales tax scenario. Those who could afford to buy new, fancy, gas guzzling cars would pay a hefty sales tax on them.
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anitar1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:27 PM
Response to Reply #58
76. Food is taxed in Utah
used to live in St George so drove 35 miles to Nevada to do my grocery shopping-beautiful drive! Hated paying tax on food.
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:20 PM
Response to Reply #13
63. No, they want to tax everything
and the rates range from 22% to 30%. At the end of the year, people would send their W-2 form into Uncle Sugar. People making under $50K would get a sliding scale of money returned to them.

That means that for the first year, every person in this country who spends 100% of their paycheck trying to stay alive would get an effective pay cut of 30% over the whole year, then some sort of lump sum at the end at the government's discretion.

All this would require a bureaucracy twice the size of the IRS, both to collect this tax and to assess the rate that would be returned to the people who couldn't afford to pay it in the first place.

It's insane. 2/3 of this economy is consumer driven. This incredibly cruel and stupid plan would shut that 2/3 of the economy down, pretty much, and give rise to a black market that would make the Russian mob salivate in jealousy.
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PA Democrat Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:40 PM
Response to Reply #13
80. Pennsylvania sales tax exempts food and clothing and housing
and it is still regressive.

Poorest 20% pay 2.6% of their income in sales taxes.

Richest 20% pay only 0.5% of their income in sales taxes.

http://www.ctj.org/whop/whop_pa.pdf

This website shows how different types of taxes affect different income brackets. You can check how progressive or regressive your state's tax system is here:

http://www.ctj.org/html/whopay.htm
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infusionman Donating Member (191 posts) Send PM | Profile | Ignore Sun Mar-06-05 06:53 AM
Response to Reply #80
90. There is a push on now to have a revision in the state sales tax...
I am from western Pa.

That would be 4% across the board taxing almost everything, but eliminating school property taxes.

I would be in favor of it because it would eliminate my property taxes and make everyone pay their fair share in sending their kids to public school.


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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:02 PM
Response to Reply #6
14. True, but I guess my problem is this:
The more you are able to spend, the more loopholes you are able to exploit. Look at the tax breaks that you can exploit by simply buying a Hummer H2. Compare that to an average person shopping for groceries.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:15 PM
Response to Reply #6
24. From the models I have heard of food and essentials would NOT be taxed
Edited on Sat Mar-05-05 08:17 PM by Quixote1818
Or if they were people under a certain salary would be exempt from the tax on food and essentials. It could be adjusted in many ways. I think it might be a good idea.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:20 PM
Response to Reply #24
27. How would the guy at the 7-11 know what to charge you based on ...
your income??? Well, if they put those exemptions on, it sure won't lessen the bureaucracy needed to enforce/collect and it sure won't lessen the fraud.
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imenja Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:03 PM
Response to Reply #3
16. the poor spend the highest proportion of their income
The idea of a consumption tax is to penalize people for spending and to promote savings. But those on the lower ends of the income scale spend everything they make on necessities like food, housing, clothing, and medical care. I don't believe for a minute the congress would exempt such things, because if they do, they obliterate a huge portion of their tax revenue.

Only those with disposable income can afford to save. Many of us could spend less than we do. I, for example, can continue to use my old dishwasher that barely works and I can keep putting off fixing the whole in my roof caused by the hurricanes. If I saved that money, it would not be taxed. If I invested it in repairs in my house, it would be. The rich would be able to shelter huge portions of their income through a consumption tax. The effect would be to further exacerbate the gap between rich and poor in the nation.

Naturally Greenspan likes the consumption tax. When he and others talk about economic growth, they refer to the accumulation of capital on the part of corporate America. Poverty and the increasing erosion of the middle class is not a concern for them. It is instead a goal, since it reduces labor costs so that corporations don't need to bother outsourcing to India in order to pay appallingly low wages. If the Republicans have their way, the US will become a third world country where only a very small economic elite reaps the rewards of economic growth and the rest of the citizens represent only a docile labor force.
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rocktivity Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:56 PM
Response to Reply #1
9. It's a rich-get-richer scheme, just like private SocSec and tort reform
Edited on Sat Mar-05-05 07:59 PM by rocknation
These ideas have been floating around by the GOP for decades, but they're no better now than they were then. President Mightymouse thinks he has a mandate, and that therefore any idea he has will drown in public acclaim.

:headbang:
rocknation
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roguevalley Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:50 PM
Response to Original message
2. I hate it. This is the tax they want to keep their tax cuts and continue
deficit spending. there isn't enough money to keep the country going so they are going to further bleed an enfeebled middle and working class and stick it to the poor. That way they can pretend a little longer that the country is sound and call it saving and capital formation when all it is is a stop gap to the inevitable: the collapse of a bankrupt country at the hands of fiscal terrorists.
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Burma Jones Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:52 PM
Response to Original message
4. Now that we've exhausted our natural resources, passed into
our post-industrial era and have entered our steady decline, I think it makes perfect sense to switch the tax burden from wealth to labor. Well, it makes sense if you're a fucking plutocratic pig fucking shit eating greed head.

A consumption tax will lower consumption. Consumption is key to our economy.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:59 PM
Response to Reply #4
11. I disagree.
The lower end of the income spectrum will continue to spend what they need to spend in order to pay for the necessities. The higher end will continue to buy the things that they can afford to keep up appearances. Why not have a tax on consumption?
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roguevalley Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:02 PM
Response to Reply #11
15. because a tax on Martha Stewart isn't the same as one on a guy
who works at wal mart and gets medicaid, that's why. its unfair and bleeds the already marginal people who can barely make it. Why should a blue haired old lady who rations medicine and lives in a cold house have to pay the same tax as Martha Stewart? That's why.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:09 PM
Response to Reply #15
22. I guess I'm talking about a flat tax for consumption.
You're already paying 5-7.5% on purchases. Maybe more, I just guessed, based on the national average...

Anyway.

My point (I guess) is why can the richest amoung us write purchases off, while the "Average Joe" can't?
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:18 PM
Response to Reply #22
26. Its not that hard to explain mathematically. People do not spend..
Edited on Sat Mar-05-05 08:18 PM by tx_dem41
the same percentage of their income on consumables. Thus, the "flat" tax that you speak of, would not happen.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:30 PM
Response to Reply #26
34. Perhaps I've misrepresented myself.
My point is that the wealthy pay less (due to current laws) in taxes on purchases than you & I do. Some of that is due to the availability of good accountants, and some is due to bogus tax write-offs. Look at the tax break that you can get for buying an H2.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:33 PM
Response to Reply #34
38. Then you shouldn't be pushing a national sales tax....it makes
the matter much worse. Push for closing loopholes.
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TN al Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:04 PM
Response to Reply #11
17. Blue-Jay look at it this way...
...since poor people have to spend everything they make on food and other necessities of life and rich people save some of their money then a consumption tax taxes everything a poor person makes but not everything a rich person makes.
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amazona Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:50 PM
Response to Reply #11
56. because you are talking about KILLING people, get it?
On my huge income in the high four figures, I simply can't pay any more tax. I ain't got it. And I ain't gonna lay down and starve. The food will have to come from somewhere. In some cases, it will come at the end of a gun. And it won't be the poor storming gated communities. It will be the poor killing each other. Over scraps.

This is the society that is created by proposals that make it impossible for poor people to provide for themselves legally.

Sheesh.

You honestly don't see where forcing people to deal in an underground black market for freakin' CLOTHES and SHOES (which everyone agrees will be taxed as "luxury" even though you're put in jail if you run around naked) is a bad idea?

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72


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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:23 PM
Response to Reply #4
29. If people have more to spend then it will not effect consumption
I don't buy that much because so much is taken out of my paycheck but if my paycheck was bigger I might consume more not that that is necessarily a good thing.

Also, how does the tax burden switch from wealth to labor? Labor won't be taxed at all and those with the big bucks who buy luxury cars will pay the bulk of the taxes not someone buying milk and bread which will most likely be exempt.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:27 PM
Response to Reply #29
32. We wouldn't be talking about that much more money for poor people....
Edited on Sat Mar-05-05 08:33 PM by tx_dem41
since up to a certain income level, the poor do not pay a high percentage in federal income tax (remember we are not talking about eliminating Social Security payroll tax or state income taxes). Thus, the the poor's paychecks aren't going to rise nearly enough to pay for the 45%+ sales tax rates you want to hit them with.
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Burma Jones Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:39 PM
Response to Reply #29
43. People will just plain see higher prices and that will drive
consumption down.

By taxing labor, I mean that those folks that do the labor will pay more, proportionally, than those folks that live off the labor of others.

As we eliminate or reduce taxes on capital gains, dividends and estates, the tax burden will have to go somewhere, I suggest that it will be placed on the middle and lower classes.

Now, if these folks were talking about some sort of nationwide property tax, along with a consumption tax, then I might be more favorably inclined.
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PA Democrat Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:21 PM
Response to Reply #29
75. Read this if you believe a consumption tax would help you
Under current law, federal income and estate taxes are progressive. That means that taxpayers with high incomes pay a larger share of their incomes in taxes than do middle- and low-income taxpayers. A national sales tax would be exactly the opposite. It would take a much higher share of the earnings of low- and middle-income families than the wealthy would have to pay. That’s because most Americans must spend most or all of their incomes to make ends meet, while better-off people can afford to spend a much lower share of their incomes. Moreover, older Americans tend to spend a higher share of their incomes than younger ones, which means that a national sales tax would be particularly burdensome on the elderly. As a result, replacing most federal taxes with a national sales tax would mean very large tax increases on most Americans and very large tax cuts for the wealthy. The tables that follow speak for themselves, but a few important points can be highlighted:

# In virtually every state in the union, the bottom 80 percent of taxpayers would face much higher taxes under a sales tax. Nationwide, these tax increases would average about $3,200 a year.

# Put another way, on average the 80 percent of Americans in the middle- and lowerincome ranges would pay 51 percent more in sales taxes than they now pay in the federal taxes that the proposed national sales tax would replace.

# In contrast, the best-off one percent of all taxpayers nationwide would get average tax reductions of about $225,000 each per year.


More at

http://www.itepnet.org/sale0904.pdf
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Spinzonner Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:52 PM
Response to Original message
5. I really don't think that

taxing Tuberculosis is the way to solve the problem
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1monster Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:55 PM
Response to Original message
7. On top of all the other consumption taxes (state sales tax for on example)
that I pay, not to mention the property tax, the income tax, the social security tax, the medicaid tax, gas tax (which is a consumption tax), user fees, etc.?

I don't like it at all. I don't mind paying my fair share, (at least I don't mind it when it goes for good things that improve life for all of us and for those who need extra help), but my dwindling paycheck is already stretched beyond what it can bear. I can't afford another tax, period.
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KnowerOfLogic Donating Member (841 posts) Send PM | Profile | Ignore Sat Mar-05-05 07:55 PM
Response to Original message
8. Absolutely wrong. Yet another way to enrich the wealthy at the
exspense of the average people. The people at the bottom *create* the wealth that is accumulated by the people at the top. a national sales tax is just another way to make sure people at the bottom keep less and less of the wealth they create. The fact that the cons even have the nerve to publicly suggest such a thing, is a sign of the terrible times we are living in.
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etherealtruth Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:06 PM
Response to Reply #8
19. Touche
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Coastie for Truth Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 07:58 PM
Response to Original message
10. Regressive as hades.
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TwentyFive Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:00 PM
Response to Original message
12. I think taxing consumption may be great idea.
I think taxing people's wages was always a bad idea.

I think we should tax consumable items and "made in China" trinket type junk that people buy in Wal-Mart. What people pay for these items does not reflect the true cost in the damage they do to the environment. I don't think we should tax food or clothes...but maybe assessing a tax on the containers they come in, or the impact they have on the environment.

I'm personally very much in favor of a steep inheritance tax on wealth over $1,000,000, and also maybe some kind of wealth tax too.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:13 PM
Response to Reply #12
23. I agree, and I think it needs to be discussed
Wealthy people buy much, much, much more than people who don't have a lot of money. Hell, I don't buy much at all and try to save as much as possible. If their was an exemption on food and essentials I might get away with paying very little tax and because my paycheck would be much bigger I would end up in much better shape. Your arguments brought up some other good points.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:22 PM
Response to Reply #23
28. At what rate do you think the national sales tax would be set at?
You might just be surprised.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:32 PM
Response to Reply #28
36. Well, it would need to be high enough to equal the income tax
and some people would win and others would lose. I would win because I am not material and don't buy a lot but some people live at the mall and they would get their ass kicked but they probably should get their ass kicked for being so materialistic.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:36 PM
Response to Reply #36
40. Non-RW economists feel that to be revenue-neutral it might have to ..
be as high as 100%, at the very least 50%. Plus, you would still be paying 7.65% payroll tax (twice that if you are self-employeed) and whatever your state income tax rate is (if you have one). That's lots and lots of taxes you are leaving, with two of those tax sources (payroll and sales taxes) HUGELY regressive.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:43 PM
Response to Reply #40
46. Interesting, I was thinking that if the wealthy don't consume but invest
then the shortfall would need to be made up someplace and that would be through the middle class's consumption. OK, now I am leaning against it.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:46 PM
Response to Reply #46
50. Self Delete
Edited on Sat Mar-05-05 08:47 PM by Quixote1818
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:40 PM
Response to Reply #36
45. In a nut shell some people would win and others would loose for example
Someone like me probably would come out ahead because I don't buy a lot of luxury items but someone who lives at the mall might come out behind. I think it would balance it's self out because people would have budgets and they would spend according to those budgets.

My biggest worry is weather wealthy people would spend or invest their money. If they invest which they probably would then someone would have to pick up the slack and that would be the middle class. Humm, now I may be leaning against it. It's something that would need to be tested in a few counties or cities to see what actually happens. If the middle class started to get nailed because the wealthy were not consuming but were investing then, hell no!
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:44 PM
Response to Reply #45
47. Well, we do know that anyone that makes less than $30K a year
would definitely lose, because most pay nothing in Federal Income tax (not talking about payroll or state tax). So your benevolence has shifted the tax burden from the rich to the poor.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:52 PM
Response to Reply #47
59. See my other post as I have changed my mind based on the fact
that I don't think the rich would consume but would invest and only become more wealthy and powerful. No, I will stick with the income tax I think.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:06 PM
Response to Original message
20. I am open to hearing more about it but it would need some adjustments
I don't think it could include things like food and essentials that the poor need on a regular basis or perhaps poor people could get an exemption from the tax if they show they make below a certain yearly salary. The Wealthy buy a lot more luxury items than the poor and so I think it might work out better than most people would expect. I would rather be taxed on consumption because I don't buy that much, I am a saver.
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BornaDem Donating Member (225 posts) Send PM | Profile | Ignore Sat Mar-05-05 08:06 PM
Response to Original message
21. I can't imagine buying anything except food that wasn't used...
if I had to pay 23% on top of the cost of the item. I know they say that everyone would receive a check up to the poverty level plus something every month to reimburse for the tax on neccessities, but I have "sticker shock" on almost everything as it is, so I just cannot imagine buying anything and adding over 20% to the price of it.
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osaMABUSh Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:18 PM
Response to Original message
25. Think of the effective Tax rate of the poor, middle and rich
The consumption tax would replace the income tax. Let's say a poor person spends 90%, middle 70%, and rich 20% of their incomes on consumables. And the consumption tax is 30% then your new tax rates are 27%, 21% and 6% respectively. That's a nightmare for the poor and middle classes and a wet dream for the upper class.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:24 PM
Response to Reply #25
30. Also, consider the fact that every non-RW economist believes the rate...
would have to be in the range of anywhere between 45-100% to make it revenue-neutral (depending on whether there were any exemptions).
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:26 PM
Response to Reply #25
31. Ah! Now THAT makes sense to me!
I suppose that I just had a problem with tax breaks for large purchases. My whole point was that I don't feel that a millionaire should be taxed less than a single mom buying a loaf of bread. The sad fact is that the rich person does indeed get larger loopholes when they're purchasing a Hummer or a boat. That ain't right.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:28 PM
Response to Reply #31
33. Then your issue should not be supporting a national sales tax plan...
it should be closing loopholes for the rich.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:32 PM
Response to Reply #33
37. True...but
I'm not opposed to a federal consumption tax that knows no loopholes. The tax laws are currently written to favor the richest of the populace. THAT is what I'm against.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:38 PM
Response to Reply #37
41. A federal consumption tax that knows no loopholes would easily raise...
the tax burden for the lower 50% in income in this country, and the tax rates for the very highest would plummet further. The math was explained in an earlier post. You sure you want that???
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:44 PM
Response to Reply #41
48. No. I'm not sure.
Which is why I'm asking for input. I'm not an economist, nor have I presented myself as such. I was just looking for some input. Like I mentioned before, I'm not cool with tax breaks being available for the big spenders and NOT being available for the man/woman who is in a financial bind.
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:47 PM
Response to Reply #48
51. I'm sorry if I came across too strident in my posts....
I wasn't attacking. I appreciate you listening to me!
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:51 PM
Response to Reply #51
57. And I appreciate your input.
As I said: I'm no expert on the subject, and I enjoy the education. That's part of why I'm here, m'man. No offence taken.
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porphyrian Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:31 PM
Response to Original message
35. We should never tax tuberculosis.
Isn't being a victim of consumption enought without having to pay a federal tax on it as well?
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tx_dem41 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:39 PM
Response to Reply #35
42. Step away from the keyboard, NOW!
Shouldn't you be having fun on a Saturday night? :)
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porphyrian Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:39 PM
Response to Reply #42
44. I have restraint issues. - n/t
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dogman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:33 PM
Response to Original message
39. If you exempt food and essentials, it is a luxury tax.
We used to have a luxury tax. It was usefull in wartime especially since luxuries were rationed. Of course the rich had and the poor had not. Of course the luxury taxes were repealed since they stifled the economy and hurt workers in the industries that made them. We saw that recently in the tax on luxury yachts that was removed because it was seen as harmful to workers in the boat building sector. Now that everything is being manufactured overseas these might be seen as tariffs and be illegal under the various trade agreements. As noted above the goal here is once again to get away from the progressive (what's left of that that B$$$co has not removed) income tax and shift the burden to the poor. The current trend of this administration is to make a larger tax base by making more poor. Taxes hurt everyone so we'll just borrow, that's the GOP way. Of course common sense tells us that can not last forever so they just need to speed up the End Times.
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:49 PM
Response to Reply #39
55. Also, I remember back when women's handbags had a
luxury tax on them.
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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:53 PM
Response to Reply #55
73. Leather and jewelry were "excise" taxed when I was young
It was 10 per cent if I remember:)
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:34 PM
Response to Reply #73
79. I forgot about the jewelry, you know the cheap costume stuff.
I don't remember if the real stuff was taxed then. Probably not, because the rich would object.
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Cleita Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:48 PM
Response to Original message
52. I'd be all for it if it was on Mercedes and mansions, but
it won't be. Also, a few years back a luxury tax hurt rich people industries like yacht builders. The rich refused to buy unnecessary play toys if they were going to have to pay a tax, so you can be sure that the taxes will be on the goods that the working poor HAVE to buy, not playthings.
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Quixote1818 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:48 PM
Response to Original message
53. What if the wealthy don't consume with their extra money but they invest??
You know that would happen then their would be a huge shortfall in the budget and you know who would make that up????? Yes, the middle class. I was considering this but I think it would just make the very wealthy into the super wealthy and they would have so much power we would end up with a republican president for the next 1000 years.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:53 PM
Response to Reply #53
60. That's a whole 'nother subject.
I was only talking about consumption.
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baldguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 08:49 PM
Response to Original message
54. TAX THE POOR!
They didn't work hard for their money - if they did, then they'd have more of it!

:eyes:
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prolesunited Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:07 PM
Response to Original message
61. I understand what you're saying
but I don't think it would solve the problem. In fact, it would make it worse.

Take a look at this analysis. It also includes a good explanation of how it would place an even greater burden on the poor and middle class.
http://www.itepnet.org/sale0904.pdf

How about tax reforms that simply close the loopholes to which you were referring? Or maybe a tax cut for a hybrid but not a Hummer or breaks for solar panel installation and other things that encourage responsible environmental and fiscal behavior and policy.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:21 PM
Response to Reply #61
64. Obviously that would not SOLVE the problem.
I don't think that I implied that. If I presented my point that way, I've not spoken clearly enough.

Simply stated, I see no reason why the tax structure should be hindered solely by income. Consumption should also be worked into the equation. It's a matter of parity and equality.

also...... muah.


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SmokingJacket Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:22 PM
Response to Original message
65. How about a luxury tax.
Basics not taxed -- fancy shit is.

Plain car not taxed: big ass car is. Jewelry, pools, second homes, airplane tickets to vacation areas taxed, tickets home to mom in Buffalo not taxed.

Seems to me if you're buying stuff you don't need, you can shell out a little extra to pay for infrastructure.

Of course that wouldn't replace the income tax...

What the hell's wrong with the income tax?? It worked fine until we started trying to conquer to world.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:24 PM
Response to Reply #65
66. Where do you draw the line, though?
I don't disagree with you, but your post opens up a whole new can of worms.
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SmokingJacket Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:35 PM
Response to Reply #66
72. I guess it would have to be fairly abitrary!
No way around that. (health magazines: no tax; fashion magazines: big tax!!!)

But the nice thing about our progressive income tax is that it recognizes that 10% of a small income pinches more than 10% of a large one. A consumption tax, in order to be fair, would have to try and reproduce that burden-distribution.

For granny buying a new pair of gloves, 10% more might be enough to persuade her to go without. But if someone's buying a new pool for their third house, they won't even NOTICE a 10% difference.

And the pain you're creating for granny going without her gloves is for LESS money.

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applegrove Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:26 PM
Response to Original message
67. We have a VAT tax in Canada on top of income tax. It helps pay for
our wonderful health care system. Not on food or necessities though.

But regressive unless you just sit it on top of progressive income tax. IMHO
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:27 PM
Response to Reply #67
69. VAT?
huh? (yes, I'm ignorant)
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applegrove Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 10:09 PM
Response to Reply #69
74. Value Added Tax. That "socialist" country in New Zealand started
it first. Pissed off many when it was instituted but if you do not shop like a shopaholic.. it doesn't affect you much. Too bad about the tax on books a few things.

Otherwise it has kept our healthcare & schools and towns and cities solvent and helping to create the best quality of life in the world.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:29 PM
Response to Reply #74
77. Ah! I see. Thanks.
Makes sense to me.
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whistle Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:27 PM
Response to Original message
68. Ultra regressive, the rich will pay no matter what because they...
...are richer as a result of having more disposable income, the poor and middle class have little disposable income to begin with, then to tax everything they consume will force them to seek only essentials to get by on. More Americans will have to be content with less and still pay taxes.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:31 PM
Response to Reply #68
70. True enough. That makes sense.
However, there might be a middle ground somewhere.

where? I don't know. That's why I started this discussion I suppose.
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tkmorris Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:51 PM
Response to Reply #70
83. But why find a middle ground?
With a flat tax you are talking about an all-round bad idea, at least it's bad if you aren't quite wealthy to begin with. Why on earth would we want to find a compromise position somewhere between what we have now and a far worse system?

If the objection is the loopholes that the rich use to avoid tax, close the loopholes. A flat tax just makes matters worse.
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UdoKier Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 09:32 PM
Response to Original message
71. Hate it, regressive, might as well vote GOP.
I would NEVER vote for a politician who favors it over the progressive income tax. The fact that the party of billionaires is for it should tell you something about who they KNOW it will primarily benefit.
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Doctor_J Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:29 PM
Response to Original message
78. It's very regressive
which is why the GOP is in favor of it.
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stillcool Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:44 PM
Response to Original message
81. I am really glad you brought this topic up....
as I was quite clueless about this,... but not anymore!!! As in everything else the government does, the words used to push an idea, barely resemble the intention...some kind of language barrier. And I thank all for the great explanations.
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Blue-Jay Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:53 PM
Response to Reply #81
84. You're welcome. I've learned quite a lot as well.
Thanks, everyone! :D
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Deja Q Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-05-05 11:49 PM
Response to Original message
82. I wonder what * will say. Will he be against it or for it?
And if for it, I hope the people ask him hard questions about his previous tax cuts that did nothing for them.
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pabloseb Donating Member (510 posts) Send PM | Profile | Ignore Sun Mar-06-05 12:38 AM
Response to Original message
85. Sales tax is ALWAYS regressive

and whoever thinks that a sales tax imposed by * will tax luxury items but not essentials has been dreaming since 2001.
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yorgatron Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-06-05 01:36 AM
Response to Reply #85
86. i guess they don't want me to buy stuff.
if enough of us don't buy stuff,we can make some more people lose their jobs.and so on,and so on,until we're all shit out of luck :mad:
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ausiedownunderground Donating Member (429 posts) Send PM | Profile | Ignore Sun Mar-06-05 04:12 AM
Response to Original message
87. In Oz we have both Consumption tax and income tax -It don't work
These taxes, when run together do not work. You have one or the other!
Since the introduction of a consumption tax here in OZ in 2000 the amount of tax that the middle classes contribute as a whole has gone through the roof! When it was first introduced by the conservative government people recieved an income tax cut. However in hindsight this income tax cut did not compensate the middle classes, in particular, and to a lesser extent the lower classes either. Both these classes now pay a far greater % of Oz government revenues than they used to. In fact the introduction of this tax has been a "windfall" to our national government. The government is far richer but the majority of people here are far poorer!!!
The consumption tax theory is great on its own. It is the most democratic tax you can get! You pay tax when you spend or consume!!!
If you consume nothing then you pay no tax! If you consume a lot you pay more tax!
However when run with an income tax in parallel then you distort the tax revenue. Income tax here in Oz has so many "loopholes" and "grey areas" that the upper classes exploit for their own gain that its not funny!! Your average middle class PAYE income earner here in Oz pays more tax as a % of income than the richest 10%! Because of the benefits of keeping an income tax system!
A Consumption tax is very difficult to avoid or evade, even for the upper classes. The tax is already there when you consume an item! The more you consume the more tax you pay!!!
In Oz, the other great "windfall" for the government has been that this type of tax has "hit" the taxation black market hard, particularly small business's, who now find it a lot more difficult to hide "Cash only" jobs etc etc! The price of what they use for these jobs is already taxed!
In Oz this tax has made the upper classes pay more than they would have. However it has also made the other classes pay more as well!
The reason for this is the Income tax breaks that still exist! The upper classes still use this income tax system for tax evasion or tax minimization!
Now i don't know alot about how America taxes their population through their Federal and State System, but if you want a "Democratic Tax" system that the Upper Classes will finally have to pay their "fair share" then a "Consumption Tax" with NO "Income Tax" system is by far and away the fairest!!!
The extra added advantage of this type of system is that it allows a country to be able to use both a "Fiscal" policy lever run by government and a "Monetary" policy lever run by hopefully an independent Federal Bank. This type of "two" levers policy, means that everybody shares the "Pain" or "luxury" of how your own countries economy is going. Under a "single lever" policy of "Monetary policy" only, not only are its effects slow to act, it also hurts only a smaller percentage of your countries population. The burden is not "DEMOCRATICALLY" shared!!!
Be very careful America how your politicians try to sell you this tax!! If its NO INCOME TAX - Consumption Tax trade off I recommend "Give it a go". We in the Anglo-Saxon world will be watching carefully at your experiment! If its not, their not serious about democratic revenue raising!!!
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Art_from_Ark Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-06-05 05:26 AM
Response to Reply #87
88. "Consumption" tax is a misnomer
It's not based on what is "consumed" but rather on what is purchased. Thus, it's a sales tax.
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leftofthedial Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-06-05 05:28 AM
Response to Original message
89. AWFUL IDEA
repuke ripoff scheme
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Silverhair Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-06-05 07:02 AM
Response to Original message
91. It depends on how it is done.
Fact of life: The poor spend a larger percentage of their income on esentials. The rich spend a lager percentage on non essentials.

If essentials are made tax free, then the rich would be hit harder than the poor, and the tax would be progressive as you move up the economic scale.

It would discourage spending and encourage savings, which would be a good thing.

The current tax system is horribly complicated, and the rich are often able to avoid much of it. Further, much income escapes taxation, although illegally, by never being reported. Even that income would now be taxed as the income was spent.

If done correctly, replacing the income tax with a consumption tax would be great. If done badly it would be a disaster.
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Siyahamba Donating Member (890 posts) Send PM | Profile | Ignore Sun Mar-06-05 08:01 AM
Response to Original message
92. Once it's implemented, it's hard to get rid of it.
Witness the GST in Canada, implemented in 1991 by the Progressive Conservatives. The Liberals ran on getting rid of it as part of their platform, but it proved too difficult to lose that revenue. It should be noted; however, that the 7% GST replaced a 13.5% Manufacturers Sales Tax charged to manufacturers.
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