Alan Greenspan, Mr. Money, is in favor of a consumption tax over an income tax. Raw Data: Greenspan Statement.
“As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth — particularly if one were designing a tax system from scratch — because a consumption tax is likely to encourage saving and capital formation,” Greenspan said.
Okay, but for once I agree with the Democrats. This will hurt the poor, i.e. ME. I live on less than $10,000 a year and I barely make it as it is. To add even a 3-5% National Sales Tax, would hurt me severely, and I promise you the NST will not be that low. It will be more like a 10-15%, which will make it impossible for me to survive.
Unless they want to dicker around with the NST like they do the present tax code and exempt things like groceries.
But Greenspan is right. People will want to save to avoid paying the tax. They will invest in their retirement plans, and just save up. Enough items will still be sold to maintain and grow the economy, but people will hopefully dig themselves out of debt and save like they never have saved before.
I’ll reserve my opinion until something concrete is floated out.