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I would do that immediately but do not think it is "fair".
Fairness would suggest that we tax income in proporation to wealth. I believe that other values trump the value of fairness. Those things are: 1. ease and expense of collection, 2. universality, 3. relative popularity and 4. rate of tax evasion/cheating. Sales tax is much easier and cheaper to collect. Sales tax is much easier to apply universally in the marketplace. 3. Sales tax, when compared to income tax, is much more popular with every demographic group. Popularity is a very legit criteria. It is reasonnable to ask people how they want to pay for gov't and abide by their wishes. Although it is possible to cheat on sales tax, it is harder than with income tax and cheaper and easier to detect the cheating.
There is no question that progressive income tax is "fairer" and philosophically I might prefer it over sales tax but the practical advantages of sales tax, when applied universally, overcome the fairness value of income tax. When I say universal I mean all sales, goods and services at poiunt of sale, with no exceptions for anybody.
Further, when you apply the sales tax to services you mitigate the retroactivity quite a bit because the rich purchase services much more than the poor and the poorer one is the greater the chances that one is recieving food stamps which are not subject to sales tax. (I wish they were.)
I am not addressing how high or low the rate ought to be, only the mechanism. I do not suggest that we ought to raise the total amount collected, only that we change the way we collect it. I don't know the answer to the question of what the rate of sales tax rate would have to be to replace our current income tax recipts but I do know we would have lots less cheating.
For me the replacement of income tax with sales tax is an area where modern conservative thinking is superior to modern liberal thinking. There are, of course, areas where the opposite is true. |
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When you say "fair tax" do you mean replacing the income tax with a universal sales tax? New 
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