Just read this article on Slate.com. I think it's an idea that's so powerful that it should be worth consideration at the federal level with an IRS. But putting that aside, I think it might be a way to raise taxes collected while eliminating the income tax.
Plus, the progressive/liberal part of me likes that it helps reduce income inequality while not punishing and providing disincentives for being productive and making more money.
I think it's ridiculous that the Top 1% are spending $80,000 on a wedding while a family of 4 can't pay for health care. At the same time, the plan could help get rid of the income tax which is really keeping people we need in the city from moving back in.
http://www.slate.com/articles/busine...equality_.html
As I wrote yesterday, rising income inequality has been largely a consequence of two forces: changes in technology that have extended the reach of the most gifted performers in every arena, and increasingly open competition for the services of those performers. Finger wagging at corporate pay boards will not alter the strength of those forces. Regulatory reforms aimed at promoting better corporate governance are often desirable in their own right, especially in the financial services industry. But such reforms are also unlikely to alter the income growth trends we’ve seen in recent decades.
The good news is that we could pull a few simple policy levers that would greatly reduce the adverse effects of growing income gaps without threatening the benefits that have been made possible by improved technology and increased competition.
The simplest step would be to scrap the current progressive income tax in favor of a much more steeply progressive tax on each household’s consumption. Families would report their taxable income to the IRS [[ideally under a tax code that greatly simplifies the calculation of taxable income), and also their annual savings, as many now do for IRAs and other tax-exempt retirement accounts. The difference between those two numbers—income minus savings—is the family’s annual consumption expenditure. That amount, less a large standard deduction—say, $30,000 for a family of four—is the family’s taxable consumption. Rates would start low and would then rise much more steeply than those under the current income tax.
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