Quote:
Originally Posted by oLd-SouL";p="
The problem with a sales (spending) tax system is that it directly punishes those who spend money, and thus promotes no spending (saving). The US economy is fueled by quick spending, so your tax solution would kill the worlds greatest economic engine.
|
You have been misled. Spending cannot fuel an economy, only production can.
Quote:
Originally Posted by oLd-SouL";p="
And I agree with Sam. Ignorance is bliss when it comes to taxes. To have to raise taxes, its better for a government to have smoke and mirrors.
|
Exactly. Conversely, it is better for taxpayers -- ie, us -- when government cannot employ said smoke and mirrors.
Quote:
Originally Posted by oLd-SouL";p="
Also... if it ain't broke, don't fix it.
|
The system
is broken. Gerald Scully has calculated that any tax level above 12% of GDP impedes growth, reducing production and employment. The Federal tax level has moved between 18% and 20% of GDP in the last few years. In 1992, after Bush I's tax hike, it went as high as 20.7% of GDP.
An analysis of US tax policy 1960-1992 (Dunkelberg/Skorburg) calculates that each 1% rise in the Federal tax burden reduces economic growth by 1.8%, and employment by 1.14%.
Americans spend 5.5 billion hours annually on tax compliance. That is equivalent of a company with 200,000 full-time employees. This is a sunk cost that does not make us any better off. If the tax code was just half as complex, the economic gains would be measurable.
As oddlycalm already implied, the complex tax code benefits the most wealthy, imposing higher tax costs on the middle class. He used the point to argue that a change is impossible to bring about, which is probably true, but it is another point in which the current system is broken.
The system of taxation in the US is so broken it's not even funny.