Tuesday, January 08, 2008

There is an article on a blog that labels Huckabee an extremist. Not because he's a religious nut, but because of his 'radical' tax proposals.
Politicians and academics on both sides of the aisle have at different times called for adding a national consumption tax to encourage savings and investment.
I've thought about this. If a national consumption tax is going to encourage investment, how will the investments that depend on consumption be affected? It's not about saving, it's about the money accumulating on its own at a greater rate than inflation can diminish its buying power. This is what I thought about after reading the above statement. Then I read further.
As Republican Bruce Bartlett, a deputy assistant secretary of the Treasury from 1988 to 1993, made clear, the 23% figure itself is a "deception." Bartlett argues that "professional revenue estimators have always concluded that a national retail sales tax would have to be much, much higher than 23%," and depending on how state taxes are addressed, "a rate of 64% would be required." The implications for the American economy, especially for low and middle income taxpayers, would be devastating.
This is true. For those American families that typically just squeeze by on their earnings, everything is taxed, because all the money going out is spent on consumption. I believe the national tax burden could be reduced tremendously if our national government limited spending to essentials only.

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