Monday, April 04, 2005

Yesterday saw a terrific op-ed piece in the Virginian-Pilot by a local Libertarian, Dr. Donald Tabor (not available online). Tabor correctly argues that every household essentially operates as a business, with income tax an expense passed along to custimers of the business. The result is that progressive taxes, intended to transfer wealth from the rich to the poor, do just the opposite.
Consider two independent service providers, a physician and a gardener. Because the physician has a high income tax, the added tax cost he passes along to his customers is greater than the 22 percent average while the low-wage gardener passes along much less than average.

The result is that the physician gets a bargain when he hires the gardener, while the gardener pays an artificially high price for the tax-laden physician's services.
The solution? Tax consumption, not income. The plan? The Fair Tax

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