I had never even considered this idea before, but it does cover an awful lot of bases in terms of both raising revenue, strengthening the economy, and avoiding a tax system that crushes the poor.
This is a type of consumption tax that asks taxpayers to subtract their savings, investments, and, in my view, any service on debt from their total earnings. The remainder, the amount used to consume, can then be taxed at a progressive rate with people who spend more paying more.
The egalitarian issue with a VAT is that it would increase the tax burden on the poor. However, a personal expenditure tax would allow us to leave spending on life's necessities untaxed. It would also eliminate our systemic bias against saving and investing.
What do you all think? I have a generally positive feeling toward it, but I've not dedicated a lot of time to think it through.
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