Subject: HR25,S25 Consumption Tax Comment: (I submitted a comment on this under the "general" category in error, so I will repeat it here.) Before you make any recommendations for change to a tax on consumption, please read the study carried out by the Institute on Taxation and Economic Policy (find it www.itepnet.org or the Citizens for Tax Justice site, www.ctj.org)revealing that the proposed legislation for a consumption tax would actually pretty much complete the transfer of the entire tax burden from the rich to the poor and the middle class. The September 2004 study is entitled "The Effects of Replacing Most Federal Taxes with a National Sales Tax: A State-by-State Analysis." In Minnesota, for instance, the lowest 20% of earners, making an average of $11,400 per year, would see their federal tax burden increase by $4,077 from $1,124 to $5,201. The middle 20%, earning an average of $43,000, would see a $2,678 increase to raise their taxes from $9,747 to $12,425. The top 5%, earning an average of $354,800, would enjoy a $58,065 DECREASE under this proposal. The study's authors note that nationwide, "...on average the 80 percent of Americans in the middle- and lower-income ranges would pay 51 percent more in sales taxes than they now pay in the federal taxes that the proposed national sales tax would replace." Do not be fooled by the title of this legislation that claims it is "to promote freedom, fairness, and economic opportunity...." Those are the last things it would achieve,although some commentators are already touting it as such and you can be sure the effort to sell it as a "benefit" to ordinary people has barely begun. |