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Originally Posted by jaguar
I always thought VAT/GST flat taxes were much fairer, tax people on what they buy, not what they earn, much harder to dodge as well.
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In theory, they are very fair. Problem is, they supress consumption and consumption is what makes the engine hum. Another problem is that tax revenue becomes very difficult to predict since the tax can be easily avoided by not consuming.
The US uses both income and consumption tax (sales tax) but the sales tax goes to the state while the income tax goes mostly to the fed. The state of residence also collects between 0% (FL has no state income tax) and 10% (District of Columbia is at or close to 10%) of income for its use.
The US tax system is the biggest Fing mess - the tax code is unreadable and no one has an incentive to fix it.