Consumption Tax

nobody · Post by **nobody** » March 3, 2005, 9:52 pm

http://abcnews.go.com/Business/wireStory?id=549042

WASHINGTON Mar 3, 2005 — Federal Reserve Chairman Alan Greenspan said Thursday that a new consumption tax such as a national sales tax could spark the economy as a partial replacement for income taxes

very interesting. i haven't formed an opinion on it yet.

Fash · Post by **Fash** » March 3, 2005, 9:58 pm

I knew this would show up eventually... I don't have a solid opinion yet either, though im totally open to the idea... The bad thing I can think of is the change psychologically as things all of a sudden cost more.

nobody · Post by **nobody** » March 3, 2005, 10:04 pm

which would be countered by the fact that you kept more of your money initially. however seniors and others who rely on the government through SS or Disability etc would hurt.

Zaelath · Post by **Zaelath** » March 3, 2005, 11:56 pm

They put in a similar tax here a few years back. Government pensions and benefits were all raised, but self-funded retirees took it in the pants.

Generally "sparking the economy" means increasing consumption, but I always saw sales taxes as a way to reduce demand and make saving look better.

The strange thing here was they removed the old sales taxes to put in the flat consumption tax, so basic goods (they were going to tax raw food, but it got blocked in the senate) like toilet paper went up 10%, but luxury goods like a computer went down 11%. Which just looks like another way to tax the poor/middle-class harder than the rich.. but there's not enough information in the article to know the real effect it might have in the US.

Pherr the Dorf · Post by **Pherr the Dorf** » March 4, 2005, 12:17 am

Brilliant way to make the rich richer and the poor poorer. How many people do you know that make under 40k that are able to put money away... exactly... they get taxed on every penny because they spend every penny. How many people who make over 275k spend all 275k every year....

Lohrno · Post by **Lohrno** » March 4, 2005, 12:19 am

Poor Tuberculosis sufferers!

Rekaar. · Post by **Rekaar.** » March 4, 2005, 1:17 am

Pherr the Dorf wrote:Brilliant way to make the rich richer and the poor poorer. How many people do you know that make under 40k that are able to put money away... exactly... they get taxed on every penny because they spend every penny. How many people who make over 275k spend all 275k every year....

all of them

They just don't buy as many cheesy-poofs as the broke guy. They invest their money into things that make them more money so they can buy better shit, and keep a large number of people employed due to their larger need for services.

Zaelath · Post by **Zaelath** » March 4, 2005, 1:19 am

Ahh, so the net cash holdings in the US is $0

Supply side economics is one thing, your "we spend it all!" theory however...

Pherr the Dorf · Post by **Pherr the Dorf** » March 4, 2005, 2:53 am

Rekaar. wrote:
Pherr the Dorf wrote:Brilliant way to make the rich richer and the poor poorer. How many people do you know that make under 40k that are able to put money away... exactly... they get taxed on every penny because they spend every penny. How many people who make over 275k spend all 275k every year....
all of them

They just don't buy as many cheesy-poofs as the broke guy. They invest their money into things that make them more money so they can buy better shit, and keep a large number of people employed due to their larger need for services.

Broke people buy cheesy poofs? And you honestly think the upper 5% spend all the money they earn without tossing a good percentage into savings, be it ira's, accounts or the like then you know noone who makes that kind of cash.

Tenuvil · Post by **Tenuvil** » March 4, 2005, 5:08 am

Pherr the Dorf wrote:
Rekaar. wrote:
Pherr the Dorf wrote:Brilliant way to make the rich richer and the poor poorer. How many people do you know that make under 40k that are able to put money away... exactly... they get taxed on every penny because they spend every penny. How many people who make over 275k spend all 275k every year....
all of them

They just don't buy as many cheesy-poofs as the broke guy. They invest their money into things that make them more money so they can buy better shit, and keep a large number of people employed due to their larger need for services.
Broke people buy cheesy poofs? And you honestly think the upper 5% spend all the money they earn without tossing a good percentage into savings, be it ira's, accounts or the like then you know noone who makes that kind of cash.

fuck no, that's reeker talking out his ass yet again

hell in 2004 I made 80k and banked/invested at least 25k

note to teh reeker: investing != spending

take a macroeconomics class as an elective to replace one of your socialist bullshit electives mmmk? until then shut the fuck up and spare us all your fucked up narrow-minded claptrap view of the world you syphiletic pile of shit

VariaVespasa · Post by **VariaVespasa** » March 4, 2005, 8:18 am

Seconded- I plowed 20k back into my portfolio last year, rather than spending it. My parents invested some of their extra cash, and bought houses with more of it before they retired. My sister and her husband are about to start doing the same thing. Buying property generates some sales tax (although usually not at the same rate as other stuff), but investment portfolios generate bugger all, except eventually capital gains taxes, which are also often taxed at lower rates than income taxes. Here in canada capital gains are taxed at half the rate of normal income, and dividends at 2/3 forinstance. EG- 60k job income, 30k capital gains income, and 6k from dividends = 96k cash coming into your bank account, but you pay taxes as if you had earned 60 + 15 + 4 = 79k. The wealthy do not spend it all on consumption-taxable stuff.

*Hugs*
Varia

Chidoro · Post by **Chidoro** » March 4, 2005, 11:50 am

Rekaar. wrote: all of them

They just don't buy as many cheesy-poofs as the broke guy. They invest their money into things that make them more money so they can buy better shit, and keep a large number of people employed due to their larger need for services.

Just this once I'm going to respond to your utter stupidity.

Spending != Investing you fucking retard

Fash · Post by **Fash** » March 4, 2005, 11:55 am

Spending != Wasting.

Investing -is- spending in a sense... spent on yourself, and your future... yet in the meantime it goes into the market where mutliple people are taking interest from it... you.. the brokers.. the banks.. the businesses you invest in.. etc.

Hoarmurath · Post by **Hoarmurath** » March 4, 2005, 12:38 pm

"Spending" in the context of this thread means "purchasing products that would fall under a consumption tax." If you invest your money somehow, it's not going to be taxed under a national sales tax system.

While investing is "spending on your future", it's not going to be taxed in the same way that "spending on milk" will be.