General Discussion
In reply to the discussion: Blasphemy: a National Sales Tax would be MUCH better than our present or any Income Tax system [View all]paleotn
(17,994 posts)An accumulated wealth tax?....interesting idea. An equal or greater tax on capital gains verses income?....should have done it yesterday. Increase tax rates during good economic times?....should have happened a couple years ago.
Sales taxes are not only the most regressive, but also the most unstable method of generating government funding. Spending is much more variable than income. Trust me. I was born, raised and lived many years in a state that relies almost entirely on sales taxes. Bad times always meant massive declines in tax revenue and equally massive cuts in government spending, at preciesly the time government should NOT be cutting spending. Even if a government entity isn't required to balance their budget, there's still a massive incentive to cut spending as revenue drops and deficits climb.
I agree we need to greatly simplify the current system, both individual and corporate, but lets not throw the baby out. Greatly reduce the loopholes and complexity. Tax cap gains at at least the level of income. Increase the upper brackets significantly and likewise, cut the lower brackets. Set up a system where upper brackets increase with business cycle in order to clear off the economic froth. Likewise, automatically cut rates as the economy declines.