Consumption tax doesn't work because rich consume less in porpotion than poor...
This. Consumption taxes penalise the poor. Personally I think income taxes should be based on how much it costs to get by - I think there should be a
flat tax (60% or more) on people's
disposable income - i.e. raise the tax-free threshold so that nobody earning less than a living wage (say £20-25k) pays tax. This system would
decrease tax for everyone earning less than ~£45k.
Yes - I see what you are saying - but I envisage a Consumption Tax being implemented in a wholly different way to our current VAT (which
is an unfair tax that hits the poor disproportionately).
A CT
would be related to your ability to pay (like any fair tax) - almost by definition. The more you consume the more you pay. The rate of the CT could be
progressive also - that is, when you enter the realm of the consumption of expensive luxuries then the rate of CT rises accordingly.
The Germans (who have a strong economy/manufacturing base) apparently save around 10% of their disposable income - this has positive knock on effects (re. investment) for the whole German economy.
The UK, by contrast, only manages to save circa 1% of their disposable income.
A Consumption Tax might, on top of everything else, manage to create a nation of savers - it would certainly encourage one.
But, as this is a BTC forum, the real advantage of a CT is with regard to fiscal policy/raising revenue in an economy where BTC constitutes a large amount of the transactions .
The real problem with an anonymous BTC (which the transactions will in time become) is raising taxation. It wouldn't be a problem with PAYE, Inheritance tax, VAT etc - but it would be a problem on income from self employment and corporation tax. An anonymous BTC would essentially enable a nationwide "cash in hand" economy.
Enter Consumption Tax.