Consumption Taxes

Fri, 22 Jan 1999 16:13:20 -0500

I came cross the following piece in a "tax reform" e-mail newsletter
regarding the fact that "consumption" taxes are regressive and thus
unpopular. Since a big part of what we are proposing is to do away with
virgin subsidies, tax things that are "bad" in a green way, etc.....then
these are somewhat regressive taxes.
Anyone have any comments on how this can better be handled?

>Citizens for Tax Justice and Archer Disagree on Consumption Taxes

Robert McIntyre of Citizens for Tax Justice, in Insight (9-23-96), states
that all consumption tax proposals "inevitably translate into huge tax cuts
for rich people and big tax hikes for the middle class and the poor." House
Ways and Means chair Archer, in the same publication, asserts that only
consumption taxes are true to the five basic principles for an ideal tax
code: fairness (based on how much one spends); attacking the underground
economy; encouraging savings and investment; improving the balance of
trade; and eliminating corporate income taxation. Tax Notes 10/7/96, p.