Consumption Tax
Previously it was mentioned that income tax was a violation of our rights as Americans. There are two major systems which the Federal Government can use without violating those rights. Lump sum tax is a popular choice among economist, it is ‘fair’, it does not discriminate if your rich you pay x dollars: if your poor you pay x dollars. We will not discuss this tax here though, as while not necessary a Libertarian preference, Consumption Tax is a person preference on this blog.
Consumption tax is quite similar to today’s sale tax. Rather than government receiving taxes from income and property, both of which are violations, they receive money through the purchase of goods and services. What is the difference you might ask? It is quite simple if you are taxed before you get the money it is a non-profit, as you can not reinvest it. If you are taxed after you spend it then you had the money in hand to choose what to do with it. The income tax system we use today allows rich people to save, but prohibits most middle class and poor peoples from doing so. A Consumption tax would increase the ability of everyone to save, invest, prepare for the future.
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The basics of it are quite simple. Inferior products (hotdogs and mac and cheese for those who have not taken economics) have a low tax on them to help the poor people who would normally purchase these items. Superior products (Steak and shrimp) would have a medium tax on them as most people will purchase them. Luxury products (cigarettes and alcohol) will have a high tax on them (as they |
already do). Same process for all goods and services, which in the end means the government still gets the money it needs to do it’s job and serve us.
Over all the government can still control about how much money they get and the poor are still ’sheltered’ as we like to do in this country. The best part of it is that with this tax system the government gets smaller as we no longer have use for the IRS. The only people who really lose out are tax accountants, which will have to learn another discipline in their field to find new work.
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Tags: Consumption Tax, Taxes
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The Libertarian Party is America's third largest political party, founded in 1971 as an alternative to the two main political parties. Our vision is for a world in which all individuals can freely exercise the natural right of sole dominion over their own lives, liberty and property by building a political party that elects Libertarians to public office, and moving public policy in a libertarian direction.
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