Replies

Thank you. Now I've got it. It's actually, in theory, a tax preference for basic needs, but in order to avoid distorting prices by exempting food, etc. for the tax you estimate the cost of basic needs for each household size and cut them a check for what they would spend. OK, that works. This tax scheme, by offering a preference for investments, would be a great short term economy booster by providing a great incentive for investment (= capital). How are commodity investments handled?

I agree now that the rebate would not effect work/leisure to any great extent. Actually, I'd like this system, not because it's fair (no tax system can be absolutely fair since we can't agree on what that means) but because it would eliminate the efficiency losses that we know other tax plans create. It also does what the author of the above article says. It makes it clear how much you pay in taxes. Food is not taxed. Except, included in the price are wage taxes for store employees, agricultural and manufacturing employees, taxes on package printing and advertising services, fuel and mileage taxes on the transportation costs, property taxes on place the food moves through, etc. We have no idea how much we really pay in taxes.

It also does what the author of the above article says. It makes it clear how much you pay in taxes... We have no idea how much we really pay in taxes.

Actually, what's even better, is that the NRST would make it appear that you're paying more taxes than you actually are. Everyone is going to see the marginal 23% rate paid at the register on every purchase -- that is what they are going to think is their tax rate despite the fact that their effective tax rate will be lower.

How are commodity investments handled?

Same as any investment, transaction fees and broker commisions are taxed, the capital invested is not.

You do not pay the NRST until you purchase at the retail register for consumption as opposed to production/investment. At the retail register all products are treated equally, (i.e. taxed once but only once.)