On Wed, Jun 05, 2002 at 10:21:18AM -0500, Jim wrote:
>     "rich people should pay more for everything
>      they buy too, there should be a rich-persons'
>      price, and a normal price"
>
> This was tried in the US via something called "The
> Luxury Tax" in the last decade.
>
> Unfortunately, domestic production of so-called 'Luxury
> Items' fell because *purchase* of such items declined
> and turned out to hurt *those* who work to build such
> items (which turns out to be a *lot* of middle class
> peoples).
>
> Moral of the story:
>
>    "Go ahead - *Tax* my day (and I'll seek alternatives)!
>
> Most socialists (and government types), it turns out, view
> these 'systems' as wholy in-elastic and completely static
> and do *not* take into account the dynamic adapatability
> of those *making* the decisions when they spend their
> dollars.
>
> The only real alternative  to prevent these end-runs
> around 'the system' is total government control (See
> 'Soviet Union', defunct 1990).

I don't think that's necessarily true that total govt. control
is the only solution. The truth of the matter is that the
govt really should consider a modified version of what many
Republicans have been pushing for awhile: a simplified tax
with no taxation on capital gains.

However there must be a price and the original statement above
is pretty close to it: a progressive consumption tax.

It's pretty simple. One gets taxed for what one spends. And
the more that one spends, the higher the tax is. It promotes
saving and investing, and those who have the disposable
income to spend will only be taxed on the disposable income
that they spend. In short a luxury tax on everything, not just
specific items.

The flat tax that has been proposed time and time again doesn't
work simply because of the disparity of the amount of disposable
income that's left when it's applied. There's a vast difference
between a 10% tax on $10,000 and the same 10% on $1,000,000. Even
though the latter is paying a lot more in absolute terms ($100,000)
the amount of disposable income left over is staggering ($900,000).

I don't mind anyone having the $1,000,000. But there should be
an increasingly higher cost to spend it.

That's just my off the wall thought on the subject. In my mind it
would be equitable, promote savings, and greatly simplify the
tax system. I also wouldn't allow any loopholes or exemptions for
folks to slip through.

BAJ

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