RE: taxes

[Bruce McFarling <brmcf@xxxxxxxxxxxxxx>]

On Sat, 1 Apr 1995, Alan G. Isaac wrote:

> Bruce, I'm confused. I thought you were trying to claim a
> consumption tax would not tax wealth. I mentioned taxation
> of wealth as a virtue of a consumption tax, in contrast with an
> income tax. You may _also_ want an income tax, but an
> income tax only taxes wealth to the extent that wealth
> generates measured, taxable income flows.
	Both of them are taxes on income flows, directly or indirectly.
Estate taxes apply to wealth, for example, but both income and consumption
taxes can only come from income flows that the taxpayers get their hand on
one way or another.

> You also haven't indicated why you believe that a consumption
> tax that didn't apply to basic foodstuffs and (capped) rent
> would necessarily be regressive. Without any figures in hand,
> I'd guess it would be more progressive than the current
> system.
	I don't believe that such caps are attainable, and I'm not going
to take the time right now to work out to my own satisfaction whether or
not they are desirable.  I'd guess that all food exempt (which, yes, does
provide a mild, across the boaqrd, progressive shift to consumption taxes)
and all rents below a certain level exempt might be possible with enough
agitation in its favor. That's the figures I'd want to see if you get
around to working them out.  I am not opposed to a consumption tax, with
foodstuffs exempt (which *is* attainable) if it is necessary to replace
lost revenues from making Social Security taxes pay as you go.  I'd say
that putting them to national support of K-12 salaries (BTW, for our
non-hegemon resident correspodents, here in the hegemon we let poor states
and poor communities pretty much struggle to educate their children on
their own resources), with deficit financed high-water marking in
recessions, would be fine.  "Basic" foodstuffs is just going to get
defined as whatever it is that U.S. farmers happen to produce.

Virtually,

Bruce McFarling, Knoxville
brmcf@xxxxxxxxxxxxxx