Posted on 03/03/2005 1:15:42 PM PST by kellynla
WASHINGTON, March 3 - Federal Reserve Chairman Alan Greenspan said today that the tax system should be simplified, perhaps with some kind of consumption tax, to encourage national economic growth and personal savings.
Mr. Greenspan, testifying before President Bush's advisory panel on tax reform, said conditions had changed greatly since the last big federal tax overhaul, in 1986, and that it was high time to set things right again.
"Changes since the 1986 act have been largely incremental without the appropriate all-encompassing context that broad reform brings to the table," Mr. Greenspan told the group. "It is perhaps inevitable that, every couple of decades, drift needs to be addressed and reversed."
President Bush has made an overhaul of the tax code one of the two overriding domestic-policy goals of his second term (the other is revamping Social Security), and White House officials and Republican allies in Congress have floated the idea of some sort of consumption tax - basically, a tax on money that people spend, such as a sales tax, rather than on what they earn.
Mr. Greenspan spoke in his typically circumspect manner, no doubt aware that his remarks, however couched in caveats, have been known to affect the markets. "I would not presume to suggest the best specific path for reforming the tax system," Mr. Greenspan told the panel, which is headed by two former senators, Connie Mack III, a Republican from Florida, and John B. Breaux, a Democrat from Louisiana.
But he did say that many economists would back a consumption tax, "particularly if one were designing a tax system from scratch." Since the United States is not starting from scratch, he said, enacting a consumption tax "raises a challenging set of transition issues," ...
(Excerpt) Read more at nytimes.com ...
Knowing our government, they'll keep the income tax and add a consuption tax.
I'm for it, BUT the income tax will never die.
We'd just get taxed twice as much.
I am for it ONLY if the income tax is repealed COMPLETELY.
If the federal government takes only 3 percent of the GDP, just about any tax system is relatively non-oppressive. However, if government were to take 50 percent, 60 percent or 70 percent of the GDP, you tell me what tax system would be non-oppressive.
http://www.townhall.com/columnists/walterwilliams/ww20041222.shtml
The real debate should be about the size of government spending. We need to get it much, much lower than it is today.
I agree. We have an astronomical debt so don't expect any relief.
not to forget the waste, fraud & abuse in the federal gov't
A sales tax with prices adjusted to real cost and profit would work. We would pay about the same for goods and services, and have more money in our pockets. A value-added tax (VAT) would be horrific with chunks added to the price of goods and services at each step in the chain from producer to customer.
Pray for the republic.
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I look for a promise by the Republicans to eventually do away with the income tax if they get a consumption tax. Then, when the Democrats get back in they will strengthen both.
Muleteam1
That is but one of my concerns. The other is motivating a black market, the government response to which would be to identify and track every good sold in America.
"the government response to which would be to identify and track every good sold in America."
Yeah, by adding a computer-read-bar-code number unique to each product that could be read at the point-of-sale . . . wait a minute!
sales tax? what would the rate be?
I heard as much as 20%??
"sales tax? what would the rate be?
I heard as much as 20%??"
You are right, I've heard between 17% and 23%
However, if the production chain no longer has to pay or withold taxes for employees and business taxes, etc., then prices to the consumer could normalize at near their current level. Additionally, we would not have that sizeable percentage of our earnings taken from us through income tax witholding.
Just what I've read.
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sounds reasonable...be nice if we started manufacturing our own goods again too! LOL
nothing like a a good ol' pair of American made Levis, Jockeys, Converses etc, etc, etc...and maybe even a MADE in USA PC or TV thrown in...
>> Eliminate the income tax and replace it with a consumption tax! <<
I agree.
>> Walter Williams' point of view:
If the federal government takes only 3 percent of the GDP, just about any tax system is relatively non-oppressive. However, if government were to take 50 percent, 60 percent or 70 percent of the GDP, you tell me what tax system would be non-oppressive. <<
Walter Williams is a genius. I'd put him in charge of the country's economy any day.
it would hit wealthy dividend liberals like kennedy!
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