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Peter Schiff Video Blog - April 15, 2010 (Income Tax vs. Consumption Tax)

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April 16, 2010 – Comments (5)

[I stand corrected -- Honk Kong first imposed an income tax in 1947. It has a top rate of 16%, a high personal exemption, and capital gains, dividends, and interest income are not taxed! Certainly not as good as no income tax at all, but a much better system then the one we have here!]

5 Comments – Post Your Own

#1) On April 16, 2010 at 11:31 AM, lquadland10 (< 20) wrote:

Oh lets go for the consumption tax. All we have to do is change the CONSTITUTION. That would fix everything. No I believe get rid of the FED and have RON PAUL or Schift as president. A new Congress and GS to crash and burn. Yep. That would shure make my day. When the FED goes and Congress issues the money. We pay no intress to the fed to run our money. Cost come down dramdically. Hummmm 25 cents for a gal of gas again. I would love it. In 1913 when the FED took over that dollar in less than 100 years has lost 96% of the value. So in 1913 if I made 50 cents an hour I would have to earn 11 dollars. OH WOW I earn 11 dollars an hour. SO I MAKE no more than I would have back in 1913. That is the illusion of I am richer than a person back in 1913. I am not but the government says I am and takes more out in taxes.

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#2) On April 16, 2010 at 11:43 AM, catoismymotor (30.49) wrote:

No more coffee and barbiturates for lquadland10.

 

Make April, 15 just another day. www.fairtax.com

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#3) On April 17, 2010 at 3:43 AM, semper77 (33.07) wrote:

I like Schiff, but here's where he and I part ways. A consumption tax provides a disincentive to consumption, which means less people buying goods and services, which means less people being hired to provide those things, ans the economy suffers.

This is an extension of supply side economics which, though it may sound simple, doesn't work to the maximum benefit of society at large.

 

 

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#4) On April 17, 2010 at 11:40 AM, kdakota630 (29.62) wrote:

semper77

People are always going to buy things, but conversely, if people are disincentivised to consume, they now have an insentive to save and invest.

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#5) On April 19, 2010 at 3:04 AM, semper77 (33.07) wrote:

kdakota630

Invest in what exactly? If the society at large is provided with a disincentive to consume, then what demand are you aiming to satisfy with additional investment?!?

Specifically, why on earth would I invest to create more widgets to sell if the general public now has a disincentive (ie. additional taxes) to buy them?

This is the fly in the ointment of every supply side economics theory. No amount of increased investment (or supply) is going to magically create demand if there is no demand present to begin with.

Can we just admit that this whole idea is a nice way to frame an argument for shifting the tax burden from the rich (who need to spend very little of their diposable income) to the poor and middle class (who spend a very high percentage of it)?

 

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