And I will now make fun of your rebuttals.
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Originally Posted by The One and Only...
The primary benefit is increased economic growth. A consumption tax promotes saving, because all money saved would essentially be tax-deductable. Individuals saving money is something that business relies on to make investments.
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And what are you defining economic growth as? Personal wealth? That's not economy, that's sitting on your bag of money. Saving is not spending, and economies are driven by spending. People stop spending, the economy goes down. People spend more, the economy goes up. It's not an inverse relationship.
And what about people who don't make enough to be able to save anything substantial. They sure as hell aren't going to be investing their money any time soon. Incidentally, investing doesn't really count as saving, ESPECIALLY when you invest in a business where there's substantial risk despite excellent ROI figures.
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This increase in growth relates to the worker in many ways. To put it simply, labor wages relate to labor productivity. Labor productivity increases with increased investment, meaning that labor wages will increase.
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You've got the right idea, but you're looking at it from the wrong angle. Productivity does not effect wages, unless everyone in the world is suddenly working on commissions. When you increase wages, worker productivity goes up, but only to a certain point (the point at which workers realize they are getting shitloads of money and don't really have to work hard for it, afterall).
You can't just throw money at a company and expect it to do well, and you can't just throw money at your workers and expect them to perform better.
And that gets me to my second point, productivity is defined as the ratio of outputs over inputs. Your outputs are controlled by your efficiency (which money *may* be able to help with) and effectiveness (the ability of your workers, which... <dramatic chord> really isn't affected by money afterall, like I said above).
So, since money is an input, it gets added to the bottom, and your outputs will increase just a bit... well, look at that. Your productivity ratio just went DOWN. Still don't believe me that throwing more money at a problem won't necessarily increase productivity? Look up what happened to IBM in the '60s and '70s when they figured that they could fast-track the development of one of their supercomputers by paying people more and putting more people on the project.
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It has been shown that nations who invest little shows smaller growth in wages.
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Yeah, but for a whole different set of reasons. Nations that don't have mountains of investment pouring in often have very different political climates, some of which is hostile to foreign investors. Just because two things happen to be true (low wages + low investment), doesn't mean that one automatically causes the other.
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A hidden benefit would be that Welfare could be ended. For those that needed Welfare in the past, rebates higher than the amount of taxes paid could be given. Hence, the system is more efficient and simplistic.
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Okay, let me get this straight.
Eliminate welfare and introduce tax rebates. Give people who were on welfare a bigger rebate. Well, I guess that it's more simplistic and efficient, but a rose is still a rose. Welfare wouldn't be ended, you'd just be calling it "Tax Rebate Bonus" instead.
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The other criticism was that the tax would serve as an excuse to raise prices and screw the consumer.
This is simply not true. The national sales tax would only apply at the retail level, so prices should go down if anything (although how much would depend on several factors).
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I can't even respond to this properly because I am laughing so much.
"Oh, but it would only be at the
retail level!"
1. WHO DEFINES WHAT IS AND WHAT ISN'T RETAIL? If I go to the wholesaler, can I avoid paying sales tax? What if I set myself up as a business? Can I start buying everything through my business, and then say, "Aww shit, no one bought it from ME, so I guess I'll have to use it for myself"?
2. PRICES WOULD NOT GO DOWN.
Hypothetical Situation: Business A buys something from Business B for $10. Because this isn't a "retail" sale, no sales tax is paid or collected. Oh, but they're saving income tax! Not nearly enough to pass on any significant price reduction. You only pay income tax on profit if you're a business, and businesses love their profit so guess who keeps it all?
Business A then sells it to you, Consumer X. Business A bases it's prices on what it pays, and it just so happens that there is a 20% standard mark-up in this industry, therefore the item is on sale for $12.
Now comes the sales tax!
But where should it come from??? Should you, the consumer, have to pay it, or should the business pay for it out of it's 20%? Well, that's easy to answer, at least. You, Consumer X, will pay the Y% sales tax ontop of what Business A is charging.
Regardless of whether or not the sales tax is calculated by base price ($10) or retail price ($12), you will still be paying it out of your own pocket, and therefore, THE PRICE HAS GONE UP.
Let's say there's an 8% sales tax. Now, you're either paying $12.80 for the item (base price tax), or you're paying $12.96 (retail price tax). HOW IS THAT LESS?
Nothing, absolutely nothing, along the supply chain has changed. No new costs have been introduced because nothing is a retail exchange. Business won't take a cut out of their profits, because that would just be bad capitalism.
In conclusion, I am still laughing, and think you are an even bigger moron than I did before I read this thread.