Why would any sane, rational being want to invest in a country that keeps punishing savers....and rewards losers ? The Answer...."They won't".... Or is it rational to "want to lose"..... Or is it rational to think that since the only options are to lose.....therefore let's go and lose with all gusto..... Socialism is an "acceptance of losing proposals"....whereby the rewards are lack of innovation and true wealth.... http://londonbanker.blogspot.com/ The London Banker has got it right..... If a country finds itself in a losing proposition....it must make the required structural changes for wealth building..... In the case of the US....This would be a very simple move..... Change the tax system to a 10% consumption tax only.... That's it..... From this move.....innovation and true wealth can commence from individual thrift.....and not "tin cup" politics.....
meow However I think the larger point is that socialism seems to be the endpoint for most societies. Too many incentives for politicians, the corrupt, and the dumb masses. We are outnumbered by about a hundred to one so keep dreaming.
A tax like that hurts those with lower incomes more. If you make a 3 dollar loaf of bread 3.30 it hits lower incomes much harder than higher ones. This is a tremendous flaw and will never see the light of day.
I think the point is that those who consume more whether it be bread, cigarettes, hookers, yachts, private jets will pay more. Generally VAT's or sales tax don't include food (at least in my state). A consumption tax is just that. The corollary is that there are no writedowns, loopholes, AMT's, deductions just clean taxation on economic activity. The problem is that taxation authorities always find ways to tax you more even if they were given a nationwide mandate for a VAT. but thats government. their appetitie for tax revenues grows faster than economic growth. At least here in the US.
what the heck would the 100s of thousands of accountants and irs employess do? Build roads and bridges? Then we can move even further from where we work and use more fuel and atleast stop commodity deflation