Saturday, October 27, 2007

Income Tax.

Are there any economists out there listening?

I often wonder what the downside to eliminating the Income Tax and replacing it with a Federal sales tax. The way I see it (with my simple mind) is that whomever buys more, pays more.

The rich buy more, so they pay more in tax

The poor buy less, so they pay less in tax.

I look forward to being made to look stupid. :)


Catherine Bost said...

I would never make a Vogel, a staunch Dave Ramsey supporter, no less, look annything less than enlightenend and well-spoken when it comes to finances. I'd vote for EITHER one of you president, even though you are Yankees.

I will ask why you spent your afternoon waxing economic when there was fabulous football on...

miss & love y'all!!

Anonymous said...

John - In an of itself, the idea of a national sales tax to replace the income tax doesn't seem too bad. But would our elected representatives have the discipline (can we trust them) to repeal the income tax permanently as part of enacting the a federal sales tax? Also, I'm not sure that the sales tax would be enough to replace the income tax unless it was prohibitively high. The WSJ had an article about the flaws of the 'FairTax'.

Also, low income earners spend more of their income on necessities, so they actually get hit harder by a national sales tax.

Better would be a flax income tax system, although I realize that our family would probably pay more in federal taxes under a flat tax. With 4 kids, a mortgage and some charitible giving, we get to exclude a good bit of our income from taxes.

-DK in Spartanburg, SC