Quote:
Originally Posted by Ea of Dune
Bonnie> This is a good topic and one I looke forward to debating  !
I agree with smidgey and would like to go for a sales tax as well. I'd abolish income tax, corporate tax, VAT and national insurance for a start.
With regards to the sale tax, the proposed US system which is currently a bill being debated by congress proposes a prebate to all registered citizens to help with poverty issues mentioned by Bonnie Dundee.
Since the idea of the FairTax system is that all goods and everyone should be charged 22% even basic neccessities should be charged at this rate. But a prebate would be given (I believe for a family of 4 it was something like $700 a month) which would mean the poorer members of society would not be hit by the hike in sales tax on bread for example.
The side effect of the FairTax system would be to stimiulate the economy and allow people to pay tax when they choose through their purchases. If the government taxed me less and left me with mroe money to spend would I? Yes I'd save some for my future but I'd also probably go out and buy that ferrari if I could now afford to  .
We also might see Chavs finally paying something into the system when tax revenues from Burberry products go through the roof .
I think this system could work really well, personally I'd like to see a small preportion of the prebate used to fund the NHS (but with options given to those who wish to go private without penalising them) one of the few "state" services I think if run properly would be highly beneficial.
Ea of dune |
If it has exemptions or a prebate was given then that would stop the sales tax being regressive in nature and there might be benefits over an income tax like less bureaucracy but it is still a tax on labour just at a different point to the income tax and it obviously can be forced on to consumers in the same way.
In my opinion the land value tax is certainly better as it does not tax labour but ground rent which is created by society and nature. It also basically removes speculation and profiteering in unimproved land and therefore will help land be used better, will make land cheaper and increase wages and decrease interest rates.