Skip to comments.Fair Business Competition Requires a Neutral, Consumption-Based Tax System
Posted on 07/19/2013 8:22:28 AM PDT by ThethoughtsofGreg
Recently we had the opportunity to attend a meeting hosted by the Business Coalition for Fair Competition. The meeting was largely a listening session as entrepreneurs and small business owners shared their trials and tribulations of being stuck in head-to-head marketplace competition with government or firms granted an unfair competitive advantage by government. One major source of substantive unfairness was bad tax policy that tilted the marketplace towards some business models or business organizations to the detriment of others. Luckily, state policymakers concerned with ensuring vibrant market competition have an easy fix to this problem: dump the income tax, dump carve-out and tax credits, and move to a broad-based consumption tax.
Fair marketplace competition requires neutral treatment of businesses irrespective of their product or service, production methods, various financial features (i.e. capital intensity of production, labor intensity of production, use of shipping , use of subsidiary locations, etc.), or business organization. A simple test for sound tax policy in this regard is the following query: are entrepreneurs and business leaders making business decisions for tax purposes? If the answer for a state is yes, that states tax code is creating market distortions and an unfair competitive balance in affected marketplaces. These principles of sound tax policy are codified in the American Legislative Exchange Councils Tax and Fiscal Policy Task Force model legislation on the sound principles of tax policy.
(Excerpt) Read more at americanlegislator.org ...
Taxes are inherently punitive.
Income is a measure of what you provide to the economy.
Consumption is just that - consuming from the economy.
Which is moral to tax/punish?
Almost 30 years ago, when I was working in Canada, the government instituted the General Services Tax (GST). It was pitched as a one time tax to balance the budget and reduce the debt. Once done, it would go away. They promised!
Well, it’s still in place today AND has had yet another national consumption tax added.
Moral of the story: Once the camel gets it’s nose under the tent, the whole tent gets fleas.
Consumption is voluntary.
The income tax is slavery, pure and simple. There is NOTHING moral with the gov’t having its hand out, FIRST in line, to take its ‘cut for services’ (which may be against everything the taxpayer stands for) before all else.
The consumption side tax has its own set of dangers...
Buying overseas from non-taxed countries (how would that help our economy?)
Exemptions to the tax tilted in favor of certain consumers (wait, that is what you are complaining about now)
Need for enforcement system (the IRS would still be needed)
Once in place, 20 years of haggling over the fixes and we are right back where we started.