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• #Consumption tax full

No new taxes would be placed on investments. This gives people the opportunity to improve their standing in life if they wish.Ĥ. By introducing a consumption tax, workers are only taxed why they consume something and the tax rate is the same. In the United States, you receive a higher tax rate when you make more money. This could help to shore up some of the budget shortfalls that have been being seen as of late.ģ. Illegal cash would even theoretically be taxed during a transaction. Even people in the country illegally are getting taxed whenever they make a purchase. It would increase the overall tax base.Įveryone gets taxed in a consumption tax. This could help more people be able to put money away for retirement, vacations, or other purposes.Ģ.

#Consumption tax full

Households could avoid paying most taxes every year.Īssuming there is an exemption for the purchase of used goods for a consumption tax, a household could potentially go throughout a full tax year without paying much, if anything, in taxes. What Are the Pros of a Consumption Tax?ġ.

Here are some of the pros and cons to consider for this idea. The consumption tax is an idea that is slowly gaining some traction in the United States, especially since the idea has been endorsed by former Fed Chairman Alan Greenspan. Think of it like a sales tax, but on a much larger scale. One new approach to taxation, called a consumption tax, would allow individuals to control how much tax they pay each year by controlling how many things they actually purchase. How we approach taxes on an individual level is often in a way to protect our best interests. It’s been said that there are two guarantees in life: death and taxes.