Greenspan wants tax code simplified

[NUKE_CLEVELAND]

This would absolutely ruin the economy. Consumption and taxes would fall significantly killing GDP, while investment would be neglected due to savings and the economy would fall flat on its face.

 

 

Personally I'm not too sure what, if any, effect that would have but those in the know, including Greenspan, seem to think that it would have a very positive effect on the economy.

 

I think it's an idea worth exploring though cause our current tax code is a disaster.

[southsider2k5]

Personally I'm not too sure what, if any, effect that would have but those in the know, including Greenspan, seem to think that it would have a very positive effect on the economy. 

 

I think it's an idea worth exploring though cause our current tax code is a disaster.

I have never seen Greenspan comment on a consumption tax, and I am big time fed watcher.

[Texsox]

Personally I'm not too sure what, if any, effect that would have but those in the know, including Greenspan, seem to think that it would have a very positive effect on the economy. 

 

I think it's an idea worth exploring though cause our current tax code is a disaster.

 

The first step I would like to see is a greater connection between our budget and our tax bill. Let's break out more than Social Security. Let's break out defense, foreign aid, research, eduction, and other items of interest and show everyone, when they file their taxes what it was spent on.

 

I still think it's wrong that we are predicting the demise of Social Security while we have an unlimited budget to rebuild Iraq. Us dumb Texans have a small rule of thumb about a man's net worth. When you see oil wells reaching all the way to the horizon, he's pumping a whole lotta dollars out of the ground. Let them rebuild their own damn country. We did the dangerous work, all they have to do is write some checks.

[NUKE_CLEVELAND]

http://www.cato.org/speeches/sp5-11-5.html

 

The Cato Institute has been talking about this for a long time. If what they're saying here is accurate, and I have no reason to doubt them, this doesn't look like a bad deal really.

[NUKE_CLEVELAND]

I have never seen Greenspan comment on a consumption tax, and I am big time fed watcher.

 

 

He talked about it during his testimony and it was noted in the same article you posted.

Edited March 4, 2005 by NUKE_CLEVELAND

[southsider2k5]

He talked about it during his testimony and it was noted in the same article you posted.

 

Shoot I totally missed that

[TheBigHurt35]

I'm not convinced a consumption tax would decrease spending that much. For example, do people in the city of Chicago buy less because of a higher tax rate than someone in rural Kankakee County?

 

I believe you may see much more pressure on manufacturers to lower prices. Perhaps it would drive more manufacturing overseas where they can produce good for less.

 

Which would lower the number of abailable jobs for American workers. Since jobless Americans can't afford to buy anything, the economy would suffer.

 

The tax rates in Cook County only differ from those in Kankakee County by a few percent, so I don't think that's a relevant comparison. To have a consumption-only tax renenue system, sales tax would have to jump to about 25%.

 

I do believe that spending would also decrease at least somewhat if the vast majority of the tax burden was shifted to sales tax. I don't know about you, but I'd be less apt to spend money on luxury items if they had a 25% tax added to them. That $2,000 HDTV that I could barely afford is now $2,500. That $40,000 SUV the guy down the street wanted to get is now $50,000.

 

Maybe Greenspan is seeing something that I'm not, but I don't think that putting ALL of the tax burden on sales tax would be the best solution. I think that a better solution would be to shift SOME of the tax burden to sales tax and to simultaneously decrease income tax. That would give a financial break to lower-income people and would not stifle the spending of those who have the financial means to drive the economy.

[NUKE_CLEVELAND]

Which would lower the number of abailable jobs for American workers.  Since jobless Americans can't afford to buy anything, the economy would suffer.

 

The tax rates in Cook County only differ from those in Kankakee County by a few percent, so I don't think that's a relevant comparison.  To have a consumption-only tax renenue system, sales tax would have to jump to about 25%.

 

I do believe that spending would also decrease at least somewhat if the vast majority of the tax burden was shifted to sales tax.  I don't know about you, but I'd be less apt to spend money on luxury items if they had a 25% tax added to them.  That $2,000 HDTV that I could barely afford is now $2,500.  That $40,000 SUV the guy down the street wanted to get is now $50,000.

 

Maybe Greenspan is seeing something that I'm not, but I don't think that putting ALL of the tax burden on sales tax would be the best solution.  I think that a better solution would be to shift SOME of the tax burden to sales tax and to simultaneously decrease income tax.  That would give a financial break to lower-income people and would not stifle the spending of those who have the financial means to drive the economy.

 

 

Also included in any sales tax proposal would be a rebate which would be given on a certain amount of purchases. That would work to undo any regressiveness of the tax and to lessen the bite taken out.

[TheBigHurt35]

Also included in any sales tax proposal would be a rebate which would be given on a certain amount of purchases.  That would work to undo any regressiveness of the tax and to lessen the bite taken out.

 

As long as it doesn't reduce spending to the point where it damages the economy, I'd probably be for it.

 

Since a complete overhaul of our current system is unlikely, I think that the most pragmatic thing to do would be an additional federal sales tax and a decrease in federal income tax.

[southsider2k5]

Also included in any sales tax proposal would be a rebate which would be given on a certain amount of purchases.  That would work to undo any regressiveness of the tax and to lessen the bite taken out.

 

As long as it covers the standard household deduction and what EIC would cover for the lowest percentiles, it is OK with me. We would also have to make sure that it isn't too heavy on the top brackets or they will just quit hiring to preseve profits.

[NUKE_CLEVELAND]

As long as it covers the standard household deduction and what EIC would cover for the lowest percentiles, it is OK with me.  We would also have to make sure that it isn't too heavy on the top brackets or they will just quit hiring to preseve profits.

 

 

True but with the dissappearance of corporate income taxes they would still be able to make money and at the same time would repatriate a lot of their overseas earnings that are stashed in the Caymans and such places.