Quote:Educate us please, I can give you study after study demonstrating a consumption tax would actually increase revenue. 

 

Go ahead and link the studies.

 

As for the short answer of why taxation at the time of earning is more effective, it removes the economic disincentive to spend that is created when the taxation occurs at the point of purchase with consumption based taxation schemes.

 

It's the same reason why deflation is dangerous.

 

Additionally it's a regressive scheme that taxes those who have to spend their entire income more heavily than those who are just filling up their investment account with more and more digits.

 

Quote:Are you going to avoid giving your personal information on this claim as well? A consumption tax is actually creating more revenue streams to collect taxes but you claim a production tax is the only way to keep from committing economic suicide, why?

 

Right now you have millions of undocumented workers, that pay NO income tax, under a consumption tax when they purchase goods they would be paying taxes like the rest of us.

 

Black market industries such as narcotics, prostitution, and so on generate millions of untaxed earnings. That money would also be taxed when it is spent.

 

Having a consumption tax also ENCOURAGES individuals to work MORE since they keep all of their income. Individuals are also ENCOURAGED to SAVE money, that's the two things vital to any economy. Production and Savings are the economic fuel that drive any economy, you punish both of those with production taxes. 

 

I know it's a crappy deal if you don't pay any income tax and get 4-8k back in income tax returns right now, but it's simply not a path we can afford to continue on. 

 

I didn't mean a production tax (VAT?), I said that the income needs to be taxed at the point of production, IE, when the value is produced, in the wage phase.

 

As for your black market stuff, money spent in black market activities will never be taxed, but it will eventually be taxed once it cycles back into the legitimate market.

 

Why would mexicans suddenly start paying taxes if they're not currently doing so? If they have a legitimate employer they're already being assessed taxes, and if they're not then they'll only pay taxes when they interact with legitimate businesses.

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