Thursday, March 03, 2005

Greenspan talks taxes - sales tax

Federal Reserve Chairman Alan Greenspan brooched the possibility of a national consumption tax to replace or partially replace our outdated federal income tax system. Ol' BC has said for a long time that this would be an extraordinary idea. Why? How much taxes do drug dealers and other crooks pay on their illegal gains? Zip. Nil. Nada. All of this money would begin being taxed as it is spent. What a windfall for the government. This could be so sizable that the honest taxpayer may actually gain some relief.

But what about the poor ? Wouldn't it be unfair to them? Not if structured properly. The government could rebate sales tax money to those who make below the predetermined income level. They could even do it in advance so as not to have to bear the burden in the first year.

The idea would take planning and research, but it would have to be much better for economic growth than the present fiasco. An AP article had this to say.
Greenspan cautioned that there would be both political and administrative
difficulties in moving toward a new national tax system. Simplification is
needed, perhaps a hybrid between consumption taxes and income taxes, he told the
President's Advisory Panel on Federal Tax Reform.
"In other words, don't try
for purity," Greenspan said in response to a question from a panelist.

Alan Greenspan has been one of the most respected of all Federal Reserve Chairmen. Congress would be wise to consider his proposals. Of course there will be naysayers. However, if studied in depth, it would be a wise choice to find a way to make this work.

Read the whole article here and start to follow this issue. Something needs to be done with the tax system.

Just a thought.


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