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To: pigdog
A tax hurts what is taxed. Charles Adams' books show many great examples. Especially see "For Good and Evil: The Impact of Taxes on the Course of Civilization" and also "Those Dirty Rotten taxes: The Tax Revolts that Built America"

An income tax diminishes income. There are many examples of this. This was one reason why Reagan became a Republican, because of high marginal income tax rates that were affecting him. Look at Europe's high rates, and how the US is (comparatively) better off.

A sales tax diminish sales. There are many examples of this too. Look when (New York state?) reduced the sales tax on clothing. Sales increased dramatically. Look at the difference between Oregon and Washington. One has an income tax, one has a sales tax.

A 23-30% sales tax will DEFINITELY hurt sales. To not understand that woefully underestimates incentives/costs and people's/consumer's/taxpayer's reactions.

425 posted on 09/24/2005 10:23:46 AM PDT by hripka (There are a lot of smart people out there in FReeperLand)
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To: hripka
I saw this same post on the other thread along with your other posts there, so you needn't have posted it twice.

Since you did, though, here was my answer from that thread:

"I believe that you are not considering the entire tax dynamic when you say that the FairTax will hurt sales.

Keep in mind that prices will be reduced prior to the FairTax being applied and then be increased back to around what the were and you will have more money in hand to buy things with - no income tax, receipt of the prebate, a wider tax base with consumption rather than income, and a greatly expanding economy. Since the FairTax is revenue neutral there will certainly be little or no overall damage to consumption. The basic revenue amount is the same, it is being obtained differently ... BUT the tax will now apply to a part of the tax base that had not been taxed before to any great degree - the illegal economy.

Rather that hurting sales these things should, along with an expanding economy, greatly help sales."


426 posted on 09/24/2005 11:39:00 AM PDT by pigdog
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