Quote: Originally Posted by
Mr. Right
Balance is the key.
We should be taxing a stable sector instead of income.
If we were to tax sales. We'd wind up with a better way of predicting revenue. Plus you'd stop punishing productivity.
Would it? Are you absolutely sure?
Wouldn't we just then be taxing those who consume, and therefore wouldn't most people consume less than otherwise?
And with that collective decrease in consumption, wouldn't that slow down the economy?
And when the economy slowed, wouldn't capital lay off workers?
And when more workers were laid off, wouldn't that decrease their ability to consume collectively, further still?
Can you see the vicious circle
that radical shift in taxation policy might be creating?
Let me give a a small example of what I mean about consumption taxation hurting the commonweal.
Maine taxes some kinds of consumer goods that New Hampshire does not.
Guess what that means for stores close to the border between Maine and New Hampshire that sell those consumer goods?
Blowback...
That's the thing about economic theories and the policies that come from them:
For every collective action there's a million individual reactions that mitigate the efficacy of that collective action.
Now, I am
not completely dismissing your complaints about the policies we have today. There is a logic to the complain that taxing production taxes the productive and that logic is quite irrefutable.
But economics is the complex interaction of everyone combined.
People respond to the pressures that economic policies and taxation puts on them
personally.
Sometimes, their personaly responses (which become collective responses) work out to everyone's benefit, and sometimes they don't.
I am not convinced that a consumption-ONLY taxation system would serve the commonweal
especially well.
Convince me that my concerns are specious.