Quote:
Originally posted by CamB
The sales tax would probably need to be exempt on some other stuff too (utilities - easy enough? clothing - extremely difficult. Are there other household items - then it gets difficult? some countries exempt non-luxury food only, etc? what other services should be untaxed? does transportation mean a car? a new car? a car of only a certain value? petrol? repairs? medical care? a bed? a king size bed? school supplies?).
Plus, if you need to raise the best part of $1 trillion then the tax will have to be a high percentage... probably at least 20%, maybe more.
See - http://www.bea.gov/bea/dn/nipaweb/nipa_underlying/TableView.asp?SelectedTable=19&FirstYear=2003&LastYear=2004&Freq=Qtr
I reckon you could easily trim out a half of those expenditures as ones which low income people should avoid tax on. Leaves maybe $4 trillion taxable expenditures...
If you want $750b of income tax out of potentially only $4t, that's getting close to 20%.
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Some stuff relevant to this floating around the news at the moment:
http://www.foxnews.com/story/0,2933,131693,00.html
It uses the rebate system instead of excluded products (I'd actually prefer that), although the rebate level would need to be phased out about the poverty line (this may be the case - I can't be arsed reading the details). some would complain about low income people being given a cheque every month too.
I still reckon it wouldn't work, but I'd be intrigued to see you try it
