re: #229 Aceofwhat?

huh? that’ll just encourage more spending. you’ll get no money. but i like simple…you had me there…

Oh, it’s two-thirds tongue in cheek. For the one-third that’s serious, a two part consideration.

First, you are right that it would encourage more spending. That’s actually a good thing for most economies. Simplistically, moving money is what makes a healthy economy. Using the analogy of money being the nation’s blood carries surprisingly well. Now interestingly, this increased spending would increase revenues at the state and local levels where sales taxes apply.

Second, there are two inflection points in most societies. The lower is where you pretty much have to spend all you earn just to get by. The upper is where you can’t spend it all. By taxing only what doesn’t get spent - what goes into some sort of saving - you tent to hit only those who can ‘afford’ to be hit, while at the same time further reducing the problems of Keynes’s savings paradox.

It is tongue in cheek because like all ideas a serious examination shows it needs tweaks. There are issues and points of concern. For example, is a retirement fund then taxed?

Still, its essence is simple, and the general effect is beneficial to the nation. So I continue to lobby for it when tax discussions get heavy.