To: Man50D
What’s to stop the government from ballooning the national sales tax to, say, 650%?
23 posted on
08/11/2009 9:29:08 AM PDT by
Rodebrecht
(</government>)
To: Rodebrecht
Whats to stop the government from ballooning the national sales tax to, say, 650%?
Founding father and First Secretary of The Treasury Alexander Hamilton address this issue in Federalist Paper #21. To quote:
"It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."
Hamilton eloquently points out by tying taxation to consumption will if Congress were to raise the rate too high then people will respond by reducing purchases. Fewer purchases will lessen the amount of tax collected. Congress can only maximize the amount of tax collected by keeping the tax rate within reasonable boundaries.
24 posted on
08/11/2009 9:38:58 AM PDT by
Man50D
(Fair Tax, you earn it, you keep it! FairTaxNation.com)
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson