Quote:
Originally Posted by sperry
With regards to Kevin's comments... a switch from income tax to sales tax would generate economic issues during the transition, so it would likely need to be done during a period of prosperity, but in the long term I doubt there would be a fundamental difference in the controls over the economy. Fed loan rates would still apply for manipulation of inflation. Plus, I imagine that being able to trade stocks on the market w/o taxation would do wonders for boosting the economy opposite the slowdown found at the sales counters across the country.
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People that "trade stocks on the internet" aren't really as affected by a sudden spike in the cost of things they have to or want to buy. Really, it's just a mental issue that people would have to get over before they can feel normal paying an extra $8 for a video game or an extra $4,000 for a car. There would be all sorts of weird effects in the market bumping specific things up or down- car sales, for example, woudl suffer across the board because people suddenly have to pay a lot more up front out of pocket and/or have better credit to get the taxes financed... but in the end, eventually, you'd probably be right that things would more or less reach equilibriium with where you started.