Reply #18: If "better" means "unworkable," let's hear it for consumption taxes

[jmowreader]

The intent of the "Fair Tax" is to eliminate all current taxes and to replace them with a consumption tax. A consumption tax without "monetary" taxes--income, capital gains and the like--can't work because consumption alone won't bring in enough revenue.

Let's use Germany as an example. They have two taxes which are very similar--the "value added tax" which is levied on the ultimate consumer, and the "turnover tax" levied on middlemen. The tax rate is 19 percent. They also have individual and corporate income taxes.

I guess if you jacked the value added tax up to about 60 percent and cancelled a lot of Germany's social spending you might be able to run the government without taxing money, but I doubt it.