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Okay, you'll have to double + the now used house price ; however, that's still not the crux of the problem; which you still can't see. So, let me explain it again. using your figures.A house selling for $500,000 plus a consumption tax is, per your figures $694,444.44. Then you claim that a person would have to earn aa nontaxed $625,000.00. That still doesn't match the $694,444.44 and excludes all other expenses. Expense, which the 25 % ( probably higher ) consumption tax would have taxed. It also leaves out the realestate lady's fees, the tax ( in some places ) on the purchse, and the consumption tax on moving, new furniture, drapes, paint, the painters, etc. ; all on top of local sales tax and property taxes. I don't know about YOU, but that all puts me off .

Neither have you addressed the fact that you can't just " do away " with the income tax, immediately and install this tax. There is also NOTHING to stop an income tax being reintroduced, ON TOP OF THE CONSUMPTION TAX , at some point in time.

Greenspan has been lowering interest rates for a year + now. Of course I know that startups take time. I probably understand this stuff better than you do. LOL

You misread what I said. A house + consumption tax is $625,000.00. If there was no consumption tax, the house would cost $500,000 + the income tax required to pay $500,00, which comes to $694,444.44. It is cheaper with the consumption tax. Now, of course, you could argue that the consumption tax rate should be set so that the tax is equivalent to the income tax required (otherwise, there would be a tax revenue drop).

The same logic applies to real estate lady, moving, furniture, drapes, painters, etc.

The argument that prices would drop by 25% and then add consumption tax so that you are at the same place is ludicrous. Essentially, the people that claim this are saying that all prices would be about the same after the tax, but there would be no income tax. This is dumb. The real benefit arises from the reduction in compliance costs. Also, it becomes increasingly difficult to make a consumption tax progressive. AND, individuals would no longer fear an audit. One other thing, it gets rid of hidden taxes (like employer paid taxes, property taxes applied to businesses, etc.)

What you are missing is during the initial construction, none of the construction items or work would have a consumption tax, because that is the manufacturing process. Only when it is sold as a new home would it be taxed. My guess is that when later sold, the difference in sales price would have to be taxed.

I do agree that the problem is that an income tax could be reintroduced.

What I personally would like to see is an amendment that allowed the only form of taxation to be a flat consumption tax. No income taxes, no property taxes, etc. It would consolidate all the taxing authorities, thereby significantly reducing compliance costs. Also, it would become extremely clear to the average joe how much he is paying in taxes.

Undeniable Logic