attn economic types

[TeamsterDem]

To all: Everytime I hear about "flat tax" systems my skin crawls. However, I've recently had someone tell me that the "flat consumption tax" is the "wave of the future." I've never previously heard much about a flat consumption tax, so I'm pretty naive when it comes to making up my mind on the subject.

By the way, I don't mean to poison the well here, but he said that the Heritage Foundation, Cato Institute, and Tom Delay are behind the effort. I normally wholly distrust anything any of these dubious organizations/individuals says, but rather than reject it out of hand, I'd rather have an informed opinion.

Can someone give me links to or provide criticisms of a flat consumption tax? It sounds certainly like the new face on the moribund flat tax scheme, but I'd love to read some informed insights on the matter.

Thanks in advance.

Oops, I forgot to add a link to what I'm talking about. Here it is ->http://www.fairtax.org/

[FloridaPat]

1. There was a TV show on several years ago about the flat tax.

They said if you get rid of every deduction, the government would only have to charge 7%. However, that number has never come out of any politicans mouth - they all say around %18.

It's not the future. Too many rich people and big industries are behind the present tax system. Also too many tax accounts and lawyers jobs depends on that system. I would love to pay 7%. But we won't see it anytime soon.

[NYC]

2. I have never heard of a flat tax proposal that would actually be flat.

Every proposal had exceptions. (In other words, they weren't actually flat. I suspect we will never be offered a truly flat tax.)

[0rganism]

3. We had a fairly lengthy thread on its merits a while back

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=1217231

My major gripe with the proposal, as with any consumption tax, is it discourages demand for goods.

There are better ways to organize a tax structure, IMHO.

[OHdem10]

4. Flat consumption tax--

I cannot give you any links at the moment. Please do not shoot me on sight but once upon a time I had alapse of something and was a republican . Having been a republican at one time and avid C-spanner, this is what I believe they are talkng about. You have to understand Heritage Foundation types consider taxes an abomination
. Some believe INcome Taxes are immoral. It was a long time before this country had an income tax as we know it today. At the root of this Comsumption Tax is the desire to do away with Income taxes. They see it as means of ending as much re-distribution as possible.
This consumption flat tax would mean each citizen would pay taxes on only those things he buys. This would be a flat rate. The poorest soul would be taxes at the same rate as Bill Gates. Here is the operating principle--Goal is have as minimum amount of government as possible. I think it is pretty obvious who get gets screwed big time in such a set up. Those Southern Representatives from the poorest states wish to maintain their caste system and are working like hell to make the rest of th country just like them. I picked up this information from listening to speeches on the floor of House
and Senate. Mainly House. The sad truth is they convince unsuspecting consituents this is fairness. I get sick every time I think about it.

[orwell]

6. Con Job

The "small government" line is a canard. The facts speak volumes. The size of Government has always increased under Republicans. In fact, the only president in the last 5 to even attempt to shrink the size of government (military spending, welfare spending and the actual size of infrastructure) was Bill Clinton.

The size of the federal budget has exploded under Bush.

While the Cons spew this line, they are busy writing the regulations to allow them to feed lustily at the pig trough that they publicly decry. Military spending is the king of pig slop, closely followed by a host of other handouts to big business and wealthy donors.

Cons want one thing above all else, cheap labor. Since labor represents the largest expenditure to any business, and social services and unions stand in the way of all-out corporate exploitation of the working classes, the Cons want to dismantle all social services. In essence, they want their cake and eat it to. They want government largess without any of the responsibilities.

It's a Con job.

O

[orwell]

5. By Design

Any flat consumption tax is highly regressive. By this I mean that the lower incomes will pay far more of a percentage of their income in taxes, while those who are in the upper incomes will receive a very light tax burden relative to their income.

There are some real reasons why we have a progressive tax system. Our infrastructure offers considerably more services to the upper income levels than the lower. One example is the federal court system, which is predominately used by the upper income classes for corporate litigation.

How about the US military and intelligence services, which are increasingly used to protect US corporate assets abroad? Or what about the patent office, the FDA, the Department of Agriculture, or the Department of the Interior? These federal departments are increasingly used to benefit for-profit corporations in research and development, asset acquisitions, corporate welfare and other upper income taxpayer 'perks'.

There is no "fair" tax system. Taxes are the dues we pay to have a government. It is not by accident that RW tanks such as Heritage and Cato and RW hacks such as Delay love these schemes. It ends decades of progressive taxation and replaces it with severely regressive schemes.

This is by design.

O