Thursday, April 05, 2007

Income tax versus Consumption tax?

At the heart of the debate on illegal Immigration and Border Security is a significant financial component. The argument goes something like this. All these illegal immigrants are causing major financial burdens on the rest of Americans because they don't pay taxes, work cheaper than legal immigrants and are destroying our healthcare system as they use Emergency Rooms to treat their illnesses as they don't pay for health insurance. In addition, we are not going after employers who hire these illegal immigrants.

A lot of these arguments are valid. However, there is a way to change the financial equation that could help solve part of this burden. It would require changing our tax system from a tax on income to a tax on consumption and that would include services. What do you think?

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Blogger nanciesweb said...

You mean like a sales tax? I love the idea. No more loopholes. The thing is, what to tax? In VT, any clothing item over $50 is taxed, all non-food items are taxed - with the exception of medications and over-the-counter drugs, and of course the "luxury tax", which means all fast food, hotels, and deli foods are taxed. The "luxury tax" is a separate tax and is actually more than the non-food tax. I actually think this is a good system.

I'm sure that there are a few kinks in this system but it should be set up so that there are no loopholes, and necessities aren't taxed. That way those who decide to spend their government benefits on unnecessary items will pay back to the system that is paying them.

7:39 PM  

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