Quote: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.

 

 

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.

 

You have no idea what you're talking about, I'll bet you've never read anything about the consumption tax.

 

ok this will be long but here it goes;

 

" it removes the economic disincentive to spend that is created when the taxation occurs at the point of purchase with consumption based taxation schemes."

 

The Fair Tax removes the disincentive to keep wages low. Under the current tax code you're better off not working overtime, ask anyone that's worked a 50 hour work week how much in taxes they pay on that extra 10 hours they worked. Ending production Tax encourages everyone to work and earn as much as they want with no penalty in the form of taxation. 

 

You quickly call it a scheme but why? No one's being ripped off, it's the same taxes being collected, just at a different point in the economic cycle. Under a consumption tax you can save money which is GOOD for the economy and not be penalized. Under the Production tax you pay taxes when you earn the income and when you spend the income, your being double taxed. 

 

The Fair Tax is not a reform it's a replacement, a national sales tax would replace all federal taxes. 

 

"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."

 

Again this isn't true at all, there are prebates that give monthly disbursments to all individuals. Here's the chart from the Fair Tax oragnization:

 

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