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To: CSM
Obviously, the federal government is not going to impose tax rates this high, nor would anyone pay them if it did. There would be a massive tax revolt.

Isn't that sort of the point? The author doesn't seem to grasp that we're already paying it, we're just not seeing it as a line item.

Economist Evan Koenig of the Federal Reserve Bank of Dallas makes the point that any new sales tax is going to raise prices by that amount

This guy is an economist? The only way this would occur, is if the current income tax structure was to remain in place, and a sales tax were added on top of it. If the income tax is eliminated, that takes a huge chunk out of the cost of products all the way up the production chain. Prices will have to fall, or no one will buy anything.

On the other side, consumers will have more money to spend.

There are many good arguments you can make against the sales tax, but "raising prices" is a pretty spurious one.
10 posted on 08/18/2004 5:52:40 AM PDT by babyface00
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To: babyface00

This article is nothing but hogwash. Consumption taxes would not have to get anywhere close to 30% or 50%. That is a pure fallacy.

The increased cost (inflation) would be offset by an overwhelming increase in salaries and wages due to the elimination of federal taxes deducted.

The consumption tax creates a system of transparency where you take home what you earn (without hidden deductions or employer contributions) and you know exactly how much of each purchase is going to the federal gov't.

This will lead to a reduced need for accountants (perhaps this author's motivation) and an increased interest and scrutiny of federal budgets.


12 posted on 08/18/2004 6:05:41 AM PDT by Erik Latranyi (9-11 is your Peace Dividend)
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To: babyface00
the income tax is eliminated, that takes a huge chunk out of the cost of products all the way up the production chain.

That could only be true if the "production chain" was in America..it isn't, he knows that.

42 posted on 08/18/2004 7:43:44 AM PDT by lewislynn (Why do the same people who think "free trade" is the answer also want less foreign oil dependence?)
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