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Edited on Sat Apr-16-05 12:39 PM by dcfirefighter
I am a bit of an optimist...
The only National Sales Tax proposal still out there, the FairTax, does not exempt anything, BUT they refund to everyone the amount of tax spent on 'essentials' as defined by the poverty level.
This portion is actually very progressive: if you exempt food & clothing, you actually give a larger $ break to big spenders. This rebate means that those who live under the poverty level (~$10,000 a year for a single person) actually receive more money than they spend on taxes. It's also a great back-door for a future Basic Income Grant, quite possibly the most Progressive government spending possible. In short, every single american adult gets ~$3,000 and an additional ~$1,000 for each child.
The other good thing about a Sales Tax vs. any modern income tax is that it completely un-taxes labor costs. The real benefit here is that this will result in a major reduction in unemployment. With low unemployment, workers can demand better wages...employees will be competing for workers, rather than workers competing for jobs.
The total benefit to jobs will be tempered somewhat by the tax on commerce, though not as badly as would seem. The tax on goods & services is partially offset by reduction in taxes to the providers of goods in services, which, in competitive industries, will reduce prices significantly.
This tempering will NOT effect goods made for export: they don't pay the tax. There should be quite a boon in goods & services exported to other countries.
Another problem will be inflation. With all the folks having good jobs, competition for resources will increase. Manufactured goods will eventually boost production to catch up with demand. However, non-manufactured goods, most specifically unimproved valuable land, oil, coal, ore, broadcast spectrum, and the like cannot be produced, and their price will rise, giving a windfall to the folks that currently hold title to those resources.
There are alternatives to oil & coal, however there is no alternative to land. Fortunately, this problem is rectified fairly easily at the state level: raise the tax on land while excluding the property tax on buildings.
In the end, if there were a NRST coupled with State Land Value Taxes, plus a few other taxes such a pollution taxes, and perhaps 'the original' income tax (~5% on the top 1% of income or some such), We'd have near full employment, near full homeownership, near full energy independence, and a lot more open space. Also, a great deal of political influence (special interest loopholes) would be set back at the Federal level, and most liklely given to the state level, where people have slightly more control.
SO, in short, I'd settle for the FairTax, AS LONG AS my state shifted taxes from income to land value.
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