Lawmakers and experts who support fundamental tax reform are eyeing a consumption-tax plan being worked out by the Bush administration that they believe if implemented would make the U.S. tax code much simpler to follow and be a boon to economic growth.
The administration's plan, first reported by the Washington Post last month, calls for shifting the tax system away from taxing income and targeting consumption instead. The paper reported that administration tax policy wonks within the Treasury Department are still working out the details, and that their progress has largely been kept under wraps.
Officially, White House tax-policy experts have spent the past year working on reform options to present to the president, but "economists and tax lobbyists close to the effort believe that Treasury Secretary Paul H. O'Neill is serious about elevating tax reform on Washington's agenda," said the...
Let's not forget that the American War of Independence was provoked in part by consumption taxes (tea esp.), as was the War Between the States (tariffs).
It is, to be sure, very true that eliminating income taxes would be a boon. They cost hundreds of billions to enforce, and invade everyone's privacy.
However, let us not forget that the crucial issue here is that about 80% of our federal government is not authorized by the Constitution.
So sure, let's change the dinner bowl of the monster, but let's also put some chains on him so he's less troublesome.
A consumption based tax makes great sense! Would rather be taxed on what I spend than what I make (which is hopefully more). This approach would require much less paper, accounting, and hassle. Bet we will demand cheaper government when it's price is counted at every sale!!
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