Monday, March 5, 2012


Asking for an ideal form of taxation is like asking for an ideal form of cancer. Though a cancer of the prostate or breast (more common and treatable) could be viewed as more desirable than leukemia, what is ignored is that no cancer is preferable. Although an individual does not consent to cancer perhaps they may consent to taxation.
Initially let us assume the status quot of consent. The question is what type of taxation is desirable? Frank's assertion that a consumption tax is best seems to be in line with contemporary ideology. A consumption tax is an attractive one to any that (like myself) believe we are a wasteful society. On it's surface a consumption tax is fair; cost is incurred proportionally to consumption. But, a consumption tax is bloody difficult to enact. The bureaucratic body required to squeeze revenue from the populous' consumption would be massive. And at what point is consumption to be taxed? Final use? Value added? Final use will mean low revenue and value added will limit innovation and specialization. Of course this question is silly. As a nation we already have a consumption tax. A tax is an increase in price when measured by the consumer. So when applied across the board, as in an increase in the general level of prices, we see a massive consumption tax. When the state needs money all it must do is spend it. When the money supply is inflated and prices increase a tax is levied upon consumers and savers.
It does not matter what type of tax code the state enacts, as long as there is fiat currency there will be the most pervasive tax of all, the inflation tax. Taxation is a cancer, should we ask which cancer we want or whether we should have cancer at all?

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