RE: taxes

[Bruce McFarling <brmcf@xxxxxxxxxxxxxx>]

On Sat, 1 Apr 1995, John Gelles wrote:

> 	You could also do an extremely steep progressive
> 	"consumption" tax by adding a line to your post
> 	card: "Now deduct your increased savings or holdings
> 	of any of the investments listed in booklet P (for
> 	investments made in the public interest as defined
> 	in the code).
>
> 	If you turned the income tax into a "compulsory
> 	saving and investment" tool of government, you
> 	would allow high incomes to be directly invested
> 	in economic growth -- and take from the extremely
> 	rich their argument that high marginal rates hurt
> 	growth, jobs, competitiveness, etc. An 80% marginal
> 	income per se tax rate is not as good as
> 	getting 100% of income plowed back into growth
> 	to avoid a marginal consumption tax rate
> 	far in excess of 100% of current years income.

	You're killing the cat to save a mouse here, John.  Far simpler
to make the funds available at low interest rate from the government
during periods of recession and slack capacity (e.g., from the late
1980's to the present), which will have the same positive effect without
ocmplicating the tax code.  The different policies you pursue with the
tax code, the more nooks and crannies you create for vested interested to
hide loopholes, undermining both the legitmacy of the system, and
whatever actual progressivity is acheived (any progressive tax system has
more to give back ot the wealthy than to the poor).

Virtually,

Bruce McFarling, Knoxville
brmcf@xxxxxxxxxxxxxx