Consumption is far more stable than income. When times are good, people pay down debt or save/invest. When times are bad, people borrow or cash in savings. In either case, consumption doesn't vary as much as income.
IW"the proponents of this idea based their hopes on a stable and or ever growing economy, where we are assured a given amount of tax can be generated to pay the bills. What if we go into a deep recession once more.."
YW"Consumption is far more stable than income. When times are good, people pay down debt or save/invest. When times are bad, people borrow or cash in savings. In either case, consumption doesn't vary as much as income."
I agree to a point. So as we continue to loss jobs in this country that provide a given income, and for most are replaced by jobs that provide a lower income, what you suggest does happen. Except for many, they reach a point where their savings are all gone, they cannot find work, and or again the job found simply will not pay anywhere close to what they where accustomed to. So tell me they will continue to keep the same level of consumption for things other then essentials such as food, medicines, things required by school age children such as cloths etc.
As I have stated elsewhere in these threads, I would hope this idea has enough merit for serious consideration. I just have a feeling it will not prove to be a "best" way of procuring federal tax dollars. If the IRS tax system is abolished. What happens when we go into a super terrible world reccession? And it takes years to for the curve to start to level out and then go back up?
To me, perhaps I am wrong but doubt it, recession means just that. A loss of money gain by private industry. When this happens, jobs are cut, product lines are often discontinued etc.. People who loss jobs and loss all their savings, stop purchasing new things out of neccessity.
Then where do you maintain the yearly expectation in sales revenues in order to keep the government solvent?