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Topic: Consumption tax

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	Consumption Tax, by Al Ehrbar: The Concise Encyclopedia of Economics: Library of Economics and Liberty
		Proponents of a consumption tax argue that it is superior to an income tax because it achieves what tax economists call "temporal neutrality." A tax is "neutral" if it does not alter spending habits or behavior patterns and thus does not distort the allocation of resources.
		Champions of a consumption tax argue that the income tax does enormous long-term damage to the economy because it penalizes thrift by taxing away part of the return to saving.
		The one objection to a consumption tax that is based on pure economics is that it would require a higher tax rate in order to raise the same revenue as the income tax.
	www.econlib.org /library/Enc/ConsumptionTax.html (1630 words)

	Consumption Tax Information
		Thus, for a U.S. consumption tax to raise as much revenue as the current income tax, it would appear that the consumption tax rate would have to be higher than the current income tax rates.
		Indications that a tax is a consumption tax—An indication that a tax is a consumption tax is that it exempts savings, and for businesses, it allows investment in capital (such as land, building, and equipment) to be deducted when acquired, rather than depreciated over a period of years.
		Key benefits of a consumption tax—A commonly cited economic benefit of a consumption tax over an income tax is that a consumption tax does not penalize a taxpayer who earns and saves in early years and then consumes in later years, relative to a taxpayer who does not postpone consumption.
	www.cob.sjsu.edu /facstaff/nellen_a/ConsumptionTax.html (2542 words)

	PROVISIONAL REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON CONSUMPTION TAX
		Consumption Tax on the importation of taxable consumer goods are collected by the Customs on behalf of the tax authorities.
		Consumption Tax on taxable consumer goods carried by individuals or mailed into China from abroad are collected together with the customs duties.
		All previous regulations governing the collection of Consumption Tax announced by the State Council prior to the promulgation of this ordinance are repealed on the same date.
	www.novexcn.com /consumption_tax.html (1181 words)

	Greg Mankiw's Blog: Consumption vs Income Taxation
		In the numerical example, the PV of tax flows seems to be $10 under the income tax and $8 under the consumption tax (discounting at 7%).
		And given that the consumption tax is de facto a tax on lifetime earnings (assuming all income is consumed) then this might lower work effort.
		consumption taxes that exempt food and rent thus taxing primarily discretionary spending choices are not regressive since significantly more tax will be paid by the affluent who spend much larger amounts of actual money (as opposedto percentage of income).
	gregmankiw.blogspot.com /2006/06/consumption-vs-income-taxation.html (3512 words)

	LAURENCE S. SEIDMAN'S USA TAX: A PROGRESSIVE CONSUMPTION TAX
		Although the transition from an income tax to a consumption tax would involve radical change, the proposed tax system would be the same as the existing one in several important respects.
		The total tax burden would be the same, the distribution of that burden across the different income classes (or consumption classes) would be about the same, and the computation of the tax liability for each individual and for each firm would be complex—though maybe not as complex as it currently is.
		The marginal tax rates for the four consumption brackets are 0%, 8%, 19% and 40%, the top rate applying to consumption levels of $24,000 and higher.
	www.auburn.edu /~garriro/r23seidman.htm (1011 words)

	USATODAY.com - Greenspan against tax reform proposal (Site not responding. Last check: 2007-10-24)
		Some economists and lawmakers have promoted replacing income taxes with a consumption tax, such as a national retail sales tax or a value-added tax on goods, as a way to simplify the tax code and to promote consumer saving.
		Consumption taxes can be made more progressive by exempting such necessities as food and clothing.
		Consumption taxes have some support in Congress, which is ultimately charged with setting U.S. tax policy.
	www.usatoday.com /money/economy/fed/2005-03-03-greenspan-tax_x.htm (491 words)

	Experts Warn Against Consumption Tax (Site not responding. Last check: 2007-10-24)
		Greenstein warned that one of the biggest advantages of a consumption tax - its potential to spur economic growth - would be lost in a poorly redesigned income tax.
		The tax experts were summoned to offer their thoughts on fairness in tax laws and how that concept should be measured.
		Breaux said the tax system has long assumed that taxes should be levied according to a person's ability to pay, and that taxes should apply consistently to people of similar means.
	accounting.smartpros.com /x47523.xml (669 words)

	CONSUMPTION TAX PATHFINDER (Site not responding. Last check: 2007-10-24)
		A consumption tax is based on what taxpayers take from the collective and is related to a taxpayer's standard of living.
		Consumption taxes tax people on what they take from society, while income taxes tax people on what they contribute to society.
		Because the consumption tax focuses on what the taxpayer takes from society, people would see that only a finite amount of resources are available, which would encourage smaller families.
	www.law.arizona.edu /library/Pathfinders/stunney/PATHF-2.html (3554 words)

	Consumption tax - Wikipedia, the free encyclopedia
		This is the primary concept of the consumption tax- the power of deferral.
		A consumption tax would also eliminate the concept of basis when computing the value of investments.
		Therefore, treating renters and homeowners identically under a consumption tax may not be feasible in the United States.
	en.wikipedia.org /wiki/Consumption_tax (1407 words)

	The Consumption Tax: A Critique - Mises Institute
		Suppose, for example, that all present taxes are abolished and that the same total is to be raised from a new capitation, or head, tax, which requires that every inhabitant of the United States pay an equal amount to the support of federal, state, and local government.
		Before turning to a critique of the consumption tax as a substitute for the income tax, it should be noted that current proposals for a consumption tax would deprive taxpayers of the psychic joy of eradicating the IRS.
		This is the consumption tax first prominently proposed by Irving Fisher. [3] The Fisher tax would retain the IRS, as well as the requirement that everyone keep detailed and faithful records and truthfully estimate his own taxes.
	www.mises.org /story/1768 (6185 words)

	Bruce Bartlett on Consumption Taxation on NRO Financial
		Such taxes are common at the state and local level, where we are accustomed to paying as much as 10% at the checkout.
		Consumption taxes are less burdensome than income taxes because of the way they treat saving.
		Thus, a tax on consumption will also be roughly proportional — taking the same percentage from all taxpayers.
	www.nationalreview.com /nrof_bartlett/bartlett021703.asp (918 words)

	A Consumption Tax or an Income Tax? by Llewellyn H. Rockwell, Jr.
		The proposal to move from an income tax to a consumption tax is a good example of the game.
		And think of this: the degree to which the consumption tax discourages consumption is the same degree to which it does not raise revenue.
		The champions of the consumption tax, particularly those who claim to support free markets, need to redirect their energies, away from the method of taxation to its level.
	www.lewrockwell.com /rockwell/tax.html (728 words)

	NCPA - Commentary - Bush Moves Toward Consumption Taxation
		Such taxes are common at the state and local level, where we are accustomed to paying as much as 10 percent at the checkout.
		That is why European countries, which all have tax burdens much higher than ours but also raise more of their revenue by taxing consumption, are still able to grow.
		Two-thirds of those in the lowest tax bracket the first year were in a higher bracket 10 years later, and more than half of those in the top tax bracket were in a lower bracket.
	www.ncpa.org /edo/bb/2003/bb021703.html (849 words)

	BBC NEWS \| Business \| China introduces chopsticks tax
		The move came as China said it would raise some consumption taxes next month in a bid to help the environment and narrow the gap between rich and poor.
		Taxes on yachts, luxury watches, golf clubs, gas-guzzling cars and wooden floor panels are rising by 5-20%.
		Many of the other tax increases are part of China's attempts to curb the demand for luxury goods in its cities, which has expanded rapidly as the growing economy has drawn people in from rural areas.
	news.bbc.co.uk /2/hi/business/4831734.stm (469 words)

	FOXNews.com - Greenspan: Consumption Tax Could Help Economy - Business And Money \| Business News \| Financial News
		Consumption taxes can take the form of national retail sales taxes (search) or a value-added tax, imposed on the increased value of a good or service at each stage of manufacture and distribution and ultimately passed on to the consumer.
		Bush's advisers have spoken favorably of the economic benefits that could be achieved by moving from a system that taxes income to one that taxes consumption.
		But he did say that changes should be aimed at making the tax code easier for Americans to navigate, be fair and should contain an element of predictability so that businesses and consumers alike can look into the future and have a good idea what their tax obligations are — allowing them to plan ahead.
	www.foxnews.com /story/0,2933,149298,00.html (602 words)

	The Replace Property Tax Campaign, by Peter Falkenberg Brown
		With property tax on their home sweet home, the house and land actually, in a functional sense, belong to the city or town that has attached property tax to the property.
		One of the big problems with tax is that the legislators who pass the tax laws, and the tax collectors who collect them, have often left their hearts at the door of their tax offices.
		One way to implement the replacement of property tax with consumption tax is to create a wave of public opinion that will then influence each locality, one city at a time.
	worldcommunity.com /wcj/pages/s.0017/t.39.html (1321 words)

	Greenspan supports tax overhaul - Mar. 4, 2005
		A consumption tax, such as a retail sales tax, is based on what people spend, not what they earn.
		Putting tax collection responsibility into the hands of businesses won't happen, some tax experts predict, because the risk of noncompliance would be too high.
		The consumption tax idea is "at great odds with the political center of the country," said Clint Stretch, the director of tax policy for Deloitte Tax, an affiliate of the accounting giant Deloitte & Touche.
	money.cnn.com /2005/03/03/news/economy/tax_reform/index.htm (1054 words)

	The Tax Shift Racket - Mises Institute
		The purpose is not to yield lower taxes.
		A tax that is hard to collect suggests that it less tempting to increase.
		The reduced purchasing power of the dollar after the tax is imposed is imputed to the value of money available for consumption, i.e.
	www.mises.org /fullstory.asp?control=1095 (1041 words)

	Japanese Consumption Tax/Japan AC Outsourcing
		Consumption tax in Japan is an indirect tax, which almost every domestic transaction and every import transaction of foreign goods in Japan will be subject to taxation at the effective tax rate of 5%.
		The final tax return must be filed and the tax must be accounted for to the tax office within 2 months after the end of the fiscal year.
		An corporation is exempt from consumption tax during its first and second business year, however, where an corporation is established with its capital of Yen 10 million, it is not exempt from consumption tax during its first and second business year.
	www.acojapan.com /japanesecontax.htm (286 words)

	A Tax Plan for Kerry (washingtonpost.com)
		While income taxes have been cut many times in recent decades, payroll taxes have risen steadily: from a tenth of the federal budget in the 1950s to over a third today.
		By taxing labor so heavily, we are in effect choosing to have fewer jobs and to drive employment into the informal sector, where workers receive no benefits and often try to hide their wages.
		Traditional types of consumption taxes such as sales taxes or the "flat tax," however, are extremely regressive and therefore would be no improvement over the payroll tax on that front.
	www.washingtonpost.com /wp-dyn/articles/A50667-2004May23.html (955 words)

	Consumption Tax:Topic (Site not responding. Last check: 2007-10-24)
		Consumption taxes maintain a high profile as revenue collecting instruments throughout the world.
		For the OECD area the long-term trend is increasing revenue yield from consumption taxes.
		The CFA has released a report on the collection of consumption taxes on cross-border business-to-consumer e-commerce transactions.
	www.oecd.org /topic/0,2686,en_2649_33739_1_1_1_1_37427,00.html (268 words)

	Online NewsHour: Federal Reserve Chairman Alan Greenspan Meets with President Bush's Tax Reform Panel, Seeks Tax System ...
		Now one way to think about a consumption tax relative to the existing income tax is suppose we had our current system, but we made IRA contribution limits infinity, so you could put as much as us wanted into an IRA and you could take it out for any reason, all right.
		The sales taxes that exist in the states may serve the purposes of the states quite well, but they are very poor models for a federal consumption tax.
		So if you move the tax from income to consumption, you're raising the relative burden on low savers, which are low and moderate income households, so almost any revenue neutral shift from the income tax to a consumption tax will be regressive in that manner.
	www.pbs.org /newshour/bb/economy/jan-june05/consumption_3-3.html (1937 words)

	Progressive Consumption Tax \| TPMCafe
		Second, you then imply that this is a tax on consumption.
		The progressive consumption tax was a favorite of my tax law professor in the 1970s.
		with a consumption tax, taxpayers compute their consumption, that is, how much have they spent, then figure their tax.
	www.tpmcafe.com /story/2005/6/29/143448/159 (501 words)

	Tax Information For Businesses
		This strategy includes guidance on abusive transactions, regulations governing tax shelters, a hotline for taxpayers to use to report abusive technical transactions, and enforcement activity against abusive tax shelter promoters and investors.
		Excise Tax has several general tax programs and one of the major components is motor fuel.
		Before you decide not to file your tax return on time or not pay all of your taxes when they are due, consider this.
	www.irs.gov /businesses (990 words)

	China Imposes Consumption Tax on Large Cars, Environmentally Un-sound Goods \| Worldwatch Institute
		Starting April 1, Chinese consumers who buy cars with engine capacities of more than four liters will be required to pay a consumption tax of 20 percent, according to a joint notice issued by the Ministry of Finance and the State Administration of Taxation on March 21.
		Under the revised tax policy, the rate for small cars with a capacity of 1.0 to 1.5 liters will decrease to 3 percent, two percentage points lower than before.
		As Chinese consumption levels have changed with rapid economic development and a rise in personal incomes, the country's decade-old consumption tax had failed to keep pace with these changes.
	www.worldwatch.org /node/3900 (442 words)

	Tax Policy Center \| A Project of the Urban Institute & the Brookings Institution (Site not responding. Last check: 2007-10-24)
		In general, these reformers see their proposals and the recent tax-cut changes as shifting the system toward taxing consumption, that is, money used by people and companies to buy goods and services, and leaving individual savings and much of corporate profits facing less income taxation.
		The tax on corporate dividends was not eliminated, as proposed by Bush, but slashed to 15 percent along with the tax rate on capital gains.
		The amount that business can write off their taxes in the first year on purchases of plant and equipment has been raised to 50 percent for bigger companies, and by as much as 100 percent for small businesses.
	www.taxpolicycenter.org /news/sort_consumption.cfm (2122 words)

	WebCPA \| Is a consumption tax the answer? (Site not responding. Last check: 2007-10-24)
		With a consumption tax, money is taxed when it is spent, instead of when it is earned.
		Greenspan reminded panel members of the need for simplification of the tax laws and referred to the massive 1986 tax reform as a prime example of tax simplification.
		However, he added that, "Unfortunately, tax code drift since 1986 has evolved to a point where taxpayers are again confronted with great complexity." He pointed to the proliferation of the alternative minimum tax and the complexities of the Earned Income Tax Credit as examples of tax code drift.
	www.webcpa.com /article.cfm?articleid=11815 (352 words)

	Fed chief touts idea of national sales tax - Stocks & Economy - MSNBC.com
		WASHINGTON - Federal Reserve Chairman Alan Greenspan Thursday said some form of a consumption tax — such as a national sales tax — could spur greater economic growth, but he acknowledged that a hybrid approach might be more politically realistic.
		Switching from an income tax to a consumption tax would generate huge opposition from Democrats, who argue that a greater burden would fall on the poor because they spend a far higher proportion of what they earn.
		In his prepared remarks to the panel, the Fed chief said that “a consumption tax would be best from the perspective of promoting economic growth” because it would encourage saving and the capital formation that the economy needs to expand and modernize.
	www.msnbc.msn.com /id/7077499 (487 words)

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