Quote:
Originally Posted by PeteMoss
One of the problems with a consumption tax replacing income tax is you incentivize people to save money (or spend it somewhere else). Money that sits in someone's bank account or in investments doesn't help as much as people spending that money in the economy.
The vast majority of the benefit goes to the rich people (like us) who can travel around and spend elsewhere or throw a bunch of our income into investments.
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That's actually a good thing. While buying pointless junk is great for the economy, it's bad for most other things. Just guessing here, but I'd imagine countries with high VAT's have less waste, recycling costs, fuel use(emmisions!), etc.