I’m not understanding how producers would “switch” to gas and food... For instance, my husband is a machinist - are you suggesting that his employer would find some way to produce gas or food and abandon his profitable business?
I do understand the forces of supply and demand, and I understand what you are saying about demand of those two commodities being inflexible.
I guess I just have to educate myself a lot more on our tax structure as is, and how Cain’s plan would work. I’m VERY much open to it - just not educated enough on the details, and I think I’m pretty typical of the kind of people that will have to be sold on the sales tax portion of the plan. That’s the only downfall I see with the plan (besides making sure there are strict rules regarding any future increases). Average folks who are not particularly educated regarding our tax system might not look further than thinking about paying an extra 9cents per dollar on everything they buy. With the increases in costs over the last couple years it could be a bit of a hard sell. Plus, you KNOW the Dems are going to bring up the poor and how this will likely be a hardship on them (particularly in places where food is not already taxed). I’m just trying to look ahead and understand so that I can educate others who may be worried about the same things.
Probably not your husband’s employer, but other businesses would. There would also be more of an incentive to produce more food and gas than what is demanded. Which is a problem. You want the producers to match as close to demand as possible, to maximize their profits.
If you are going to do a tax like this, the least distorting way to do it is to do it across the board, no exemptions for ‘favoured businesses’. That’s a time word democrat strategy, impose taxes on everyone else, but find some way to protect yourself so that you can evade them altogether. That way, not only do you benefit from the exemption, you get a competitive benefit over those who are taxed.
Yes, they will cry hue over the poor, etc. They will argue for a ‘rebate’, which is just another way to redistribute wealth away from productive folks, and more jobs for the liberals. Watch when it becomes a serious possibility, you will see articles that we have to do it this way, “for the chilluns”.
Is a sales tax ideal? No, but it’s a much better tax than income tax. The money goes directly into your account, and you can manage how much tax you pay at any one time by controlling your purchases. It’s also a transparant system that is fair, because everyone pays.