Third, why do so many people pay nothing in federal income taxes?
The numbers are pretty shocking. A third of the people in the US pay no federal taxes – at all. The new tax changes working their way through congress could potentially raise that to nearly 50%! This indicates one of two things: either we have a lot of very poor people or some folks aren’t pulling any weight (I won’t get into a discussion of what “their fair share” might mean – you’ll find some of that over at Hooda Thunkit although I’m not quite clear where he stands on the issue). I think the income and inheritance taxes, both personal and corporate should be scrapped – completely. In its place I would propose a Value Added Tax (VAT). This VAT would also include the costs to government for things like infrastructure (roads & bridges) and other uncovered costs (tobacco and alcohol taxes as well as a carbon tax – not a cap and trade system) so, it would have different VAT levels depending upon the product. This assures that those who spend support the system and those that save/invest
