... 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! also check me out on www.facebook.com and twitter.com
Income Tax vs. Consumption Tax
Posted by admin on September 20th, 2010
Posted in Depression Videos 
1. Tax me on what I spend not on what I earn. With a federal sales tax, everyone is paying taxes including organized crime.
2. Shrink government to lessen the demand on taxes. Start making cuts to foreign aid, arts funding, and especially the war
peter You live in a liberal state with liberal ideals, If you want to seriously help america and bring your ideas into law and get into gov. You have to leave the N east. go to texas or AZ were your ideas are accepted. Middle america is were you will get elected not the peoples socialist republic of conneticut. just food for thought. Thank you for your efforts and concern, just understand the majority of your ideas are middle america not yuppie america!
9:11 i agree ... BUT the rich got rich already -the poor are getting richer with slight of hand ideas...................what we need is more transparent paper pushers........that and bush in jail -then we can soundly gain confidence- and get rid of cheep products
our quality of life can be much better if we realize what we're being taken advantage of by the gov't.
STOP paying your debt, (we) the people do have the power: just stop paying (and playing their game). It would be interesting to see who's got who by the balls, it's all just a rigged little poker game,...isn't it?
It's a friggin pizzeria!
re stand corrected, Hong Kong also does not provide for its national defense, have a space program, contribute to the IMF or the UN, does not supply foreign aid to anyone and has never been nor is now a sovereign nation.
A sales tax in place of the current income tax will be another huge systemic disadvantage to the poor. The rich and the retired will lobby for and receive tax deductions and exemptions for the kinds of consumption the rich and the retired prefer. This has been coming since the baby boom, and will be implemented as they begin to retire. It will complement higher inflation and it will be a gold mine for the federal government. So.. don't be poor.
@crispymidget
everyone makes money and fat lazy americans get to slim down for free.
now in case that is not possible, you can always corral these unproductive americans, stick them in california and run a giant particle beam across the faultline, and say they are seceding from the US.
the more conventional way is to inflate away the debt like the US is doing now, then press the reset button and then with no legacy debt issues, the government can then relax taxes and promote re-investment.
@crispymidget
the ideal solution is to take unproductive americans (around 150m people) and re-introduce manufacturing slavery. in conjunction with this, lower taxes for corporates and banks to <10% and steer them to re-establish manufacturing bases in america to soak up the slave labor. then you will have a manufacturing environment that is competitive with china, but with a technology edge.
Hey Schiff, Sweden here
I like your opinion and it reminds me of a discussion I had with a fellow accountant a few years back where he just as you proposed a sole consumption tax. I pointed out that people will be able to buy things outside of the country and not pay tax. Here in Sweden we've got very high taxes but that's not the main issue, as an example I take the booze tax, people drive from Sweden to Germany (~800km) just to buy booze there to avoid the tax. How would you avoid it?
@trinomialtree So I've come into this discussion at the end apparently. What is your stance again? Please explain to me what you suggest is your ideal government taxation method. I'd just like to know where you're coming from.
@MrJLusty
err, sorry to pop your bubble lusty but i don't live in the US. neither do i need to worry about pensions. i gather that you are not very well versed in finance or else you would be able to infer from my handle that i work for an investment bank in quantitative trading.
its just that personally i'm a bit of a sadist and i like seeing poor people being squeezed between the twin towers we have developed - public sector monetary inflation coupled with private sector deflationary spiral.
I always favored the sales tax instead of the income tax for the reasons Peter stated
@charlessmyth - I donated to Schiff for Senate! I put my money where my mouth is.
: )
@GohanMH1 Wherever people find new efficiencies (for example we create new electrical devices that use less energy or we build cars that use less gas), the people fill in this new niche with new demand. So in case of devices that need less energy it does not mean that we use less energy. It means that we start using excess energy in a new different way.
Same with money. If there is more money in investments, it means more can be spent on creating new innovative things, this moves progress.
Mr Schiff avoids the true issue here, sadly, and as long as that is done then the country WILL go bankrupt, there is mechanically no other outcome possible. Until people know why and understand that then you are all f*cked. Same for Europeans (Article 104 of the Maastricht rip-off Treaty, and Law 73-7 for France).
The problem is the artificially created exponential date that can never be refunded, ie the US Federal Reserve System,designed to impoverish & enslave the people until they've nothing.
Part2
Because the fractional banking system we are all in since the gold standard was abolished in favor of valueless paper money will allow those banks to increase the cashflow without the creation of riches therefore causing inflation. We're talking about a massive rate of creation here, at least 10-1, so for 800k$ in the bank that bank can create millions from thin air that it will then lend to enrich itself from inflation.
I don't think Schiff's idea can work at all.He avoids the true issue.
Part 1
Some good ideas & some bad ones...
Mr Schiff assumes that the rich guy used as an example will invest his unused 800K$ a year in a smart productive way... How exactly? Will he not invest it in shares? Don't shareholders simply push for more profitability, short term profitability, regardless of any human/ethical aspects?
And if the rich guy puts it in the bank, all he is doing is creating more wealth for the richest (the banks), therefore impoverishing the poor further.
@romanmir01
I was thinking what the impact on the economy would be. By hoarding I meant saving or investing (stocks, bonds) instead consumption. If people were to save and invest but not consume much in a long term, would that not result in an excess capacity buildup...? I guess the subsequent layoffs would make people reach into their savings and the economy would than stabilize?
The GDP stands at $11.3trillion (excl. spending), and we have 3/4(approx. $8.5trillion) of the economy based on consumption. With a consumption-tax of 10 % would generate about $850 billion, what is somewhere between $250 and $300 billion less revenue compared to the income tax. It's not a big difference, but a smarter way to collect money in a harmonized fashion. Besides, 10 % is way below average if you compare it to Canada, and European countries which have a rate of 15-20 and 25 %.
@trinomialtree Man you are something else! But no worries, because when Economic crisis gets worse you're going to be one effected the most.See the middle class and Poor has pretty much lost everything,with the exceptions of the few!Who else is left? It's going to be People like yourself via Pensions, job loss and so forth.Good Luck in the future! You're going to need it!
@GohanMH1 Money, that does not grow, diminish in value due to inflation.
If you have 100 dollars in a bank, just sitting there, due to even slight 3% inflation, 10 years after you put the money into the bank, your purchasing power falls by a factor of 2. This means that you can now buy half the things with the same amount of money now than if you spent it 10 years ago.
It's not productive to hoard cash and never re-invest it and it's not fun to hoard cash and never spend it.
@romanmir01
I do not know what the point is. I am curious about consequences of such action.
@GohanMH1 That is the dumbest thing that only uneducated can believe. What is the point of 'hoarding' cash and not using it to grow it or to spend it on something?
HOWEVER Even if someone did that: hoarded the cash and never spent it, what would be the total effect on economy? Money sitting in a bank and not even working on a stock market or making more income some other way just gets eaten by inflation. That's the dumbest thing.
No job... no income.
No income... no income tax.
All interest income is taxable the same as wages. There is no capital gain treatment.
Yes, "federal" means the IRS, the national one. You might also have a state income tax, and maybe a local one also.