Reply #213: I'll admit there may be a few benefits.. [View All]

[girl gone mad]

to a consumption tax system. For one thing, it would reduce overconsumption. Americans are wasteful. We buy too much, and often don't take good care of the things we own and are quick to throw them away because they are artificially cheap to acquire.

Such a system could also potentially make a dent in the illegal labor market, since it would be harder for people getting paid under the table to survive in America.

However, our economy completely revolves around excessive consumption. Any sudden shift towards becoming savers rather than spenders would create havoc.

The basic regressive nature of a consumption tax is troubling, and regardless of how it is implemented we would always need to gaurd against future attempts at simplification (further shifting the burden downwards). I think the only way to make a rebate program work would be to send rebates to every citizen, which would be problematic. I also think small and sole-proprieter businesses stand to be hurt more than big businesses, since small businesses won't see large benefits from investment tax cuts and there would be little we could do to rectify that.