The wealthy taxpayers only spend a portion of their income.
Ta-Da!
Gene, you have unwittingly disclosed the "secret" to becoming "wealthy." The secret that over 75% of the wealthiest 500 people in the US (that self-made segment you so despise) discovered long ago. You know, those Smith-Barney types: the ones who
earned it.
As you know perfectly well, the proposed "fair" tax would not apply to basic needs such as food, shelter and health care. But it sure as hell would apply to an iPod, and rightly so. A consumption tax, properly devised, would be far preferable to the income tax, which, when rates were high, spawned a huge income-tax avoidance industry, an industry that served none of the people you so passionately care about.
A consumption tax would apply fairly to all. The people
you call rich might or might not decide to spend some of their money based on consumption-tax considerations, but to hear you tell it, they can sure as hell afford to pitch in more in income taxes, so why would they give a second thought to paying a 30% tax on their new yacht?
Especially if it was in lieu of a 50% tax on the income it represented. If they chose not to "spend" it & make it subject to the consumption tax, just exactly what do you think would happen? All that money would just suddenly disappear from the economy? Of course, not - that money would get invested in jobs (directly or indirectly, all invested monies ultimately are invested in job creation - without it, there's no "return"). Just because
you believe the economy is a zero-sum game, does not make it so. The other beauty of a true consumption tax is that I would then know
exactly what all levels of government are confiscating from me, every time I buy a consumer good - something that is far from obvious in the current patchwork system of taxes & "user fees."
I would gladly pay a 30% sales tax, inclusive of all local, state & federal taxes, for whatever the purpose, if it meant only one thing - avoiding the agony of maintaining the records needed to support and to file an annual income tax return, the regulations applicable to which weigh in excess of 150# (and growing). The problem is the inertia in the current system and the self-interest of those currently feeding off of it - the accountants and lawyers will never let it happen, no matter how "fair" or more efficient it might be.
The mechanism for collecting the tax is already in place, though. The way state & local sales taxes are collected & distrubuted is straightforward - all that would be needed would be to change the rates on the forms & the filing addresses. Sure, there are administrative issues that would need to be sorted out, since we've not done such a thing before, and the rate would be different from state to state, depending on "need" (you should
like that, Gene. Just as an aside, Gene, are you aware that there are some states which levy
no income tax?). But there is no
real obstacle to implementation of a federal sales tax. There was no basis in the Constitution for implementation of the income tax, after all, so there is no reason it couldn't be done - only a matter of will.
There would be fraud & abuse, of course, just like there are fraud & abuse now, but there would be true transparency to our tax burden and there would be some hope of an end to class warfare (though as long as people like you are around, demanding control over a portion of my income and how it should be spent, class warfare will continue, I'm afraid).
As an afterthought, your arrogance in "knowing" what people "need" - as opposed to letting their own choices determine that - is monumental.
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