Dear Mind-numbed Robot,
I didn't say that rich folks don't buy stuff that will be taxable. What I said is that overall, their purchases will be a much smaller percentage of their income than the non-rich.
Thus, family of four with $60,000 in annual income will likely spend better than $50,000. Family of four with $6,000,000 in annual income will likely spend some hundreds of thousands, or even into seven figures in "retail" consumption. And a large chunk will typically be non-taxable stuff. But probably close to half, or more, of that income will be re-invested. By the way, rich folks don't keep a large portion of their assets in "the bank." What happens with the bulk of the re-invested assets is that they go to business for investment. Which is good!
But that money doesn't directly generate any taxes under the NRST. It needs to work its way through to the retail purchaser, or the employee spending his (gross? net? Boortz certainly didn't seem to know) income on taxable purchases. And frankly, in the CURRENT system, that money gets taxed even earlier in the cycle, in the form of corporate income taxes and personal and payroll taxes on the employee.
Anyway, if half their money is re-invested, probably $3 million goes untaxed. Under the income tax, the $6 million will be taxed, probably around a total rate of about 20% - 25%.
Another place where we lose revenue is when the very rich change their investment portfolios. Wealthy Mr. Smith thinks IBM's not going to market perform, so he sells 50,000 shares, and pays federal 15% capital gains tax. He takes the proceeds and buys 250,000 of some microcap company that has a new method of building widgets.
Under the NRST, that tax is no longer paid. Another way the rich get richer.
Overall, taxes on the rich will decline dramatically. Not for every rich person, but for the rich as a class.
Works for me.
"I am confident the tax money to run the government will be there."
Of course, there's always the middle class to pay.
And pay.
I don't really see the tax base expanding enough to: 1. get more low-income folks netted out of the tax scheme (through the "prebate"); 2. dramatically decrease taxes for rich folks; and 3. Not hit middle class folks hard.
Not everyone can be a winner.
sitetest
Don't forget about the brake on the economy of compliance costs...currently poured down the toilet and non productive. Turn that into productive investment and each class of people will have to pay a smaller share. The economy gets better and all boats rise.
Until little people have money to save and invest either in investments or themselves, their opportunities are limited. Work more hours, get higher pay per hour, spend less money and save it. Give them a little more money up front and an incentive to save and invest with almost no taxes and see how they prosper. Who cares if the rich get richer as long as the poor get richer? Take the brakes off!
The very rich don't pay their fair share now through avoidance and foundations, just look at Mrs Heinz-Kerry.
Make America truly a land of opportunity for its citizens.
The rich will always spend less of their total than the poor. That is a no brainer. What is a mistake, in my opinion, is to care about it and to consider it wrong. What is the purpose of being rich? Why try to be rich? What is the penalty for being poor? Why try to work your way out of being poor?
The left solves the problem by taking from the achievers, the rich, and giving to the non performers, the poor. That minimizes the advantage to being rich and it aleviates the burden of being poor. That is not natural. The government has no place deciding who should have what.
You keep saying you don't begrudge the rich their success but at the same time you bemoan that they have more money than the poor. What is with that?
It is a well known axiom that if some higher power took all the money in the world and distributed it evenly among the population, in short order 20% of the people would have 80% of the money. That is with no cheating, stealing, or double dealing. That is the difference between the doers and the others and natural human commerce.
Shortly after than the 80% of the money owned by the 20% would be redistributed so that 20% of that 20% would own 80% of that money. So at the end of that short cycle, 4% of the population would own 64% of the money.
That is with a hypothetical fixed amount of money. We know that is not true in the real world. That hypothetical pie grows so that even though the money is redistributed all, even the p[oor, are able to do better. Henry Ford paid his workers a high salary for the time. He didn't have to, he wanted to. He wanted them to buy his cars. Smart businessmen do that and only the smart survive.
That is a natural progression among human beings of different talents and different desires. What makes the pie grow is that the people with the bulk of the money put it to work to make even more. That makes more money available to the others. They get their share according to their ability, how hard they work, and how lucky they are. Same with the rich folks.
Why should the government interfer with that?