To Tax Or Not To Tax

Greenspan made some interesting comments the other day about proposals to alter our theft tax system.

"Federal Reserve Chairman Alan Greenspan on Thursday said some form of a consumption tax - such as a national sales tax - could spur greater economic growth, but he cautioned that the government would face significant problems making the transition to such a system. "

What I think he is saying is that it'll be a good idea for the entire country except for those who favor a progressive income theft system. The main opponents of any such move will be the tax industry itself. H & R Block doesn't care so much about thew country as to let themselves be driven out of business. The "progressive" elements of both parties will be raising hell too. After all how can one keep those bothersome upper class people down when you let them keep their money?

Fairtax seems like the best workable proposal to me right now. I do lean heavily on "workable" & "right now". Ideally I'd eliminate all income & property taxes & replace them with a very modest sales tax. Very modest as in under 2%. If the federal government were to just concentrate on the things the constitution allows it to do then that'd be plenty. & taxing property every year seems a slap in the face to the notion of property Rights. If it's your property then why is it that you have to pay a yearly "rent" to the government for the pleasure of owning it?

But one of the critiques of the Fairtax plan is that government, being government, will use it id addition to, not in place of, the income tax. Greenspan seems to validate those fears:

"Acknowledging those concerns, Greenspan told the President's Advisory Panel on Federal Tax Reform that policy-makers might want to consider a combination of an income tax and a consumption tax.

'I would suspect that probably that may be the best route to go. In other words, don't try for purity,' Greenspan said in response to a question from a panelist. 'I would suspect that the opposition that would arise would probably make such a structure (a pure consumption tax) infeasible.''

A consumption tax would be ideal. Having both a consumption tax & an income tax would be a nightmare. Aside from hitting us where it hurts it would make government growth & expansion easier.

Hopefully the advisory panel will advise to push for the Fairtax plan & not even bring up combining an income & sales tax. But I'm not holding my breath. I will try to keep my eye on this though.

Posted by Publicola at March 7, 2005 02:36 AM