RE: taxes

["Alan G. Isaac" <AISAAC@xxxxxxxxxxxx>]

On Sat, 1 Apr 1995 15:44:45 -0700 Bruce McFarling said:
>On Sat, 1 Apr 1995, Alan G. Isaac wrote:
>
>> This appears to be a fallacy of composition. The question
>> is whether a consumption tax will successfully tax
>> _individual_ stocks of wealth. (And in response to Bill,
>> the reason to do it this way is that I believe people
>> will be much better at hiding their wealth than in
>> hiding their consumption.) --Alan G. Isaac
>>

Bruce responded:
>	Why would that be the question?

Because, Bruce, this is the particular point on which we were
disagreeing. In any case, you have not indicated whether you
agree taht your claim involves a fallacy of composition?

>If the question were permitted to
>be how to get a progressive tax system, I don't see what taxing stocks of
>wealth has to do with it.

The context, you will recall, was my assertion that one advantage
of a (modified) consumption tax over an income tax
is that it _also_ taxes wealth.

>	If the question were permitted to be how to tax stocks of wealth,
>then why not do as proposed by Carroll and ??? in _How Rich is Too Rich?_

I have no objection to this, but it is not adequate unless it is
implemented as a tax on total lifetime gifts. No one I know of
wants to try to do this, but if you don't you just get lot's of
tricky wealth transfers over time instead of a big one at death.

Again, an advantage of the consumption tax is that you don't
need to depend as much on individuals to correctly report
the measure you are attempting to tax.

--Alan G. Isaac