Reply #60: The system works for everyone.

[toopers]

The rules are the same across the board, except for the taxes levied. And everyone uses the system, whether it is the wealthy person or the poor person. They just use the system and services in different ways. As well, there are convincing arguments on both sides as to who uses the system more.

If you are spending more than you earn on taxable items, then you are obviously spending money on items that you don't need. I personally don't feel I should have to subsidize that spending. Most people decide to go into debt. Rarely is it because they had to go into debt (I assume we are still talking about discretionary spending as oppose to mortgage or autos). Sustenance items (groceries, clothes, primary residence) would not be taxed and there would still be programs in place to make sure that people get what they need.

Also, you are making the assumption that the rich, who are the largest consumers, would all of a sudden become misers and withhold all their wealth from the market place. If this was going to happen, it would already be happening. More than likely, spending by the rich would increase since they would, as you say, be paying less money in taxes in the first place.

I do understand your point on the taxes on taxed debt - which is a good point. I am sure there is a way to exclude tax on certain types of debt. Certainly, new debt could be taxed, but any debt prior to the code being enforced would be excluded. At the very least, the payment of taxes on debt services could be limited to a one time fee.

What this really does is reduces the risk of subsidizing people who really do not need to be subsidized at least on what they spend money on, rewards people for the correct behavior of working to save money and become self sufficient, remove the opportunity for politicians to pander to the constituency, and, for me most important, it punishes the heavy consumers.