>>>>>>>>>>There's a difference between capital/investment income and labor income and how it's taxed
>>>>>>>>>Of course there is and that's why we need Welfare Reform.
>>>>>>>>>Look back and see who financed the lobbyists who got that put into law.
>>>>>>>>>
>>>>>>>>>You won't find many wage earners or small business owners who think that capital gains and certain investment income should be taxed lower than labor income.
>>>>>>>>
>>>>>>>>How many do you think believe as I do that income shouldn't be taxed at all? Does that make their opinion more or less valid to you? ;)
>>>>>>>
>>>>>>>Stupid question: without taxes how are we supposed to provide police and fire services, a military, schools, and so on? (I am tempted to try to slip the EPA past you but won't be a wise guy).
>>>>>>
>>>>>>Stupid answer : No income taxes != no taxes
>>>>>
>>>>>OK, I'll bite since I know you know a lot about finance. What kind of tax(es) do you suggest?
>>>>
>>>>Consumption based.
>>>
>>>First, how would you provide basic services (police, fire, military) on a consumption basis? I can see how you do that with roads and though I vehemently disagree with the idea, schools.
>>
>>Police and Fire are funded at the local and state level. There are 7 states without an income tax which manage to fund them in other ways.
>>
>>>Second, the big problem with consumption-based taxes in general is that they're terribly regressive. Poor people end up spending a much higher percentage of their income on taxes than the wealthy. Yes, you can mitigate somewhat by exemption essentials such as food and clothing, but it still puts a much higher tax burden on those with less.
>>
>>It is regressive in relation to income but progressive in relation to consumption.
>
>That's the problem. People at the bottom are already struggling. Consumption taxes make it even harder for them to move up the ladder. In addition, those folks don't generally have the income to spare.

It's not a zero sum game. 2 examples off the top of my head.

- Payroll taxes are removed = more income for everyone
- Est 6.1B work hours devoted to tax reporting (circa 2011) removed = less production cost = lower prices

I accept that the transition period is the toughest and there would have to be a gradual phase in.

>Tamar