Indeed.  Surely the tax is enforceable to some extent - anything requiring a title typically requires proof that the appropriate taxes have been paid, but by and large this tax method is just not feasible.

Not only would it make the tax burden shift downwards considerably (lower and middle class families don't pay a tax rate near what they would be taxed on consumption), but it would require massive foreign tariffs to offset the inevitable surge of imports as consumers look to get their goods cheaper, i.e. the Delaware effect.

Huckabee proposes a "monthly refund check" would be paid to those with low incomes.  Not only would this create the exact type of bureaucracy Huckabee hates the IRS for, it would be largely useless to the people needing it most.  Who cares about a rebate check if you don't have the money to buy anything in the first place?

There was some mumbling about how prices would equalize because corporations and individuals would no longer have to pay income taxes, but that claim is dubious at best.

I think the FairTax is probably the single worst idea floating around the campaign trail among any of the frontrunners.

Economist 1: Hey, I know! Let's create a tax system that encourages people NOT to spend!

Economist 2: Yeah! And one that would be impossible to enforce and may not deliver any actual help to the vast majority of Americans!

Mike Huckabee: You guys are on to something . . .

I'm not saying the idea makes sense, but your post really isn't fair to Landsburg's Slate article.  His point was that you can have all of the "benefits" of switching from an income tax to a sales / consumption tax, without really having to change much at all and without sacrificing the possibility of progressive tax rates, if you just keep the current system but raise the limit on annual IRA contributions to infinity.  You can say whatever you want about that proposal but it's not fair to criticize it on the ground that it would require posting jack-booted thugs in every business and would create a huge black market in goods on which the sales tax has not been paid.  Because the point is that we'll just presume that you spent (and therefore tax) all of the income that you can't prove you've saved--by depositing it in a specific, and presumably verifiable, account.  That scheme also would still allow progressive taxation on the amount spent, although of course the overall tax structure would be less progressive than our current system because rich people save a lot more than poor people and savings would not be taxed at all (until spent).  So it's completely unfair to say that the possibility of a technological breakthrough is the "only" proposal Landsburg makes for how to deal with regressivity, or that he has "absolutely nothing to say about the enforcement issue."  His point is that any macroeconomic benefits of a sales tax rather than income tax could be achieved with modest change under our present enforcement structure.  (The change would be modest only in structural/statutory terms; of course as a policy matter it would be a radical change).

Again, I'm not saying I think it's a good idea.  And it wouldn't make Mike Huckabee happy, because it wouldn't allow you to abolish the IRS.  But your criticism doesn't engage with what I anyway took away as the author's main point.  (I happened to read it earlier in the day and found it interesting).

You have a major problem with reading comprehension, and with accuracy.

Nowhere did I call Huckabee's proposal "brilliant".  I called it innovative.

And the WHOLE POINT of the colum is that if you want the benefits of a sales tax, you

can get them by retaining the income tax, while allowing limited IRAs.   In other words,

it's easy to have the equivalent of a progressive sales tax without "some unidentified

technology".

Your point 2) was raised only to point out that it's off the mark.

Note also that I quite explicitly took no stand (in this column) on the desirablility of

progressivity.

I see that your reader scballenger  took the trouble to read my column before commenting

on it.  It might have been nice for you to do the same.

PS.  Apparently my signature was deleted from the post above.  This is Steven E. Landsburg.

The slate headline calls it a brilliant. Slate headlines tend to be obnoxious and misleading, and the wording of the headline wouldn't be Landsburg's fault.

That said the article combined with the headline implies that Huckabee's plan is great. Headline calls it brilliant, article talks about some of the benefits. Landsburg (or someone claming to be him) says:

And the WHOLE POINT of the colum is that if you want the benefits of a sales tax, you

can get them by retaining the income tax, while allowing limited IRAs.   In other words,

it's easy to have the equivalent of a progressive sales tax without "some unidentified

technology".

The "whole point" he brings up seems like a side point in the article, not the main point. That's the fault of the slate editors and/or Landsburg, not the reader. As it stands now the article looks like an endorsement of Huckabee's plan as, well, "brilliant".

What proportion of the rich and super rich actually pay their full tax requirement? I bet it's pretty small. They can purchase the best "tax efficiency" advice around.

It's your average, middle and working class Joe who has it taken from his income at the source.

Conservatives (I'm looking at you Butchie, Chan and Robert) think progressive taxation is Marxism by another name. I think it's inevitable; the US will have a flat tax of some sort eventually.

May I direct your attention to the title of the Slate piece in question: "Huckabee's Tax Plan Is Brilliant."

D'oh.

I guess people should not only read the article, but the title above it in big, bold letters.  Especially the alleged author of the said piece.  Don't blame your editor, that's the cheap way out.

I think you're way off the mark about a sales tax being the equivalent of an income tax, if the amounts being paid are the same.  The fact is, even if the rates are structured so the tax to be paid is the same, inherent disadvantages of a high sales tax will mean that they never actually will be the same.

With a national sales tax, there will be a greater pressure to avoid the tax altogether, and it will be much easier than evading your income taxes.  Why pay the national sales tax if you can order the item from Canada and still come out ahead after shipping?  Why pay the national sales tax if you can just work out a deal with a shady shop owner?  Sure, you could implement massive import tariffs and squads of tax-enforcing goons to run amok in every shop in America.  I just don't see that being easier or more efficient than the system we currently have in place.

Things also get sticky when it comes to Americans living around the poverty line.  Right now, Americans working low-wage jobs only have to pay their share of Social Security and Medicare.  Most can avoid paying State and Federal income taxes because those amounts (and then some, with the EITC) would be refunded at the end of the year anyway.  With a national sales tax, these individuals would suddenly be hit with a much higher effective tax rate.  Items they used to be able to afford will now be out of reach.  Huckabee's plan attempts to remedy this with a monthly tax rebate check, but the sad fact is, people living paycheck to paycheck can not afford to pay more for their everyday items than they do now.  Additionally, I don't see how requiring millions of Americans to prove they're poor and then mailing rebate checks to those who qualify (based on their purchases, I assume) is somehow less cumbersome than our current system.

In a perfect world there wouldn't be poverty or neighboring countries with differing tax structures.  Maybe there a national sales tax would work better than an income tax.  But in the real world, it's a dumb idea.  A really dumb idea.

Assume Huckabee is elected president. Is there any chance his "Fair Tax" gets implemented by Congress? Not in years 1 and 2, when Democrats will control Capitol Hill. Not in years 3 and 4, either, since that kind of massive tax change would require 60 votes in the Senate even if Republicans gain control of both chambers in the 2010 midterms. And even then, it would take a revolution among Republicans to fall in line behind President Huckabee, who will come to office with weaker allegiance from his party establishment in Washington than any Republican in memory.

So isn't the real purpose of Huckabee's "Fair Tax" platform not to get the thing enacted, but rather to send coded signals about himself to various Republican constituencies? Isn't it best seen as a tactical code to the non- or even anti-evangelical economic right that Huckabee "gets it" on economics, too, and wants to abolish the IRS and shift the burden of taxation away from businesses and the wealthy and onto the middle class and the poor?

You know, sort of the opposite of the economic conservatives who dominated previous Republican contests. They eschewed the kinds of unglamorous policies that might actually reduce the number of abortions (and did under Clinton for eight years running, to the tune of 4 million fewer abortions in his terms, versus annually rising abortion rates under his Republican predecessors and successor) in favor of symbolically grand but practically meaningless pledges to criminalize abortion through a constitutional amendment.

"Assume Huckabee is elected president."

No.  I have enough nightmares while I'm asleep, thank you.

Prof. Landsburg goes by "wotw"? = "war on the world"? or just on reason?

Perhaps "wacky off the wall?"

Rhubarbs, I'm assuming the entirety of your post made sense.  Sadly, I am temporarily unable to read it all, after having suffered a massive seizure upon reading the first line.

(Actually, I read the whole thing and enjoyed it.  But please, don't force me to consider the unthinkable.)

A substantive "fair tax" question: if the "fair tax" is a tax on services as well as products, then what does that do to investment commissions and other fees paid mainly by wealthier citizens? A 30 percent tax on top of, say, a 5 percent commission can add up to real money. To say nothing of a 30 percent tax on top of an attorney's contingency fee! Does that put a damper on any kinds of investment activity, or do commission-earning people have to start discounting their fees and therefore their incomes?

Also, if we tack a 30 percent tax onto the price of a home, plus the price premium of 30 percent taxes on all of the materials in a new home, plus 30 percent taxes on agents fees and other associated home-buying costs, will the sale of new and existing homes cease entirely, or merely collapse catastrophically?

If regressive taxation is such a problem, then why are so many liberals, myself included, in favor of significantly increasing the gasoline tax, possibly the one product the taxation of which is maximally regressive? Can't the Huckster claim that a 30 percent gasoline tax would actually represent a huge tax cut for working families?

Finally, if you're a Huckabee evangelical who wants to create a "culture of life" and a conservative who believes that taxes produce less of the thing you tax, shouldn't you be in favor of raising the "death tax" to 100 percent? (If someone proposed an abortion tax to fund the war in Iraq, would Republicans in Congress spontaneously combust, or merely suffer fatal brain aneurisms, if forced to vote on it?)

"(If someone proposed an abortion tax to fund the war in Iraq, would Republicans in Congress spontaneously combust, or merely suffer fatal brain aneurisms, if forced to vote on it?"

Wrong, wrong. We ought to be offering tax <i>incentives</i> for abortions. <i>Then</i> we'll see how far this whole tax cutting nonsense goes.

Oh, it's not HTML enabled. I see.

I believe there are ways to make a national sales tax less regressive, by, for example, not taxing item that poorer people need (e.g., food), and/or increasing the sales tax on items that the rich are more likely to buy.  I believe Sweden used to implement something like that (if my memory serves me correctly---it was a long time ago), where they had a "luxury" tax on many unnecessary items (not sure if they do now). It seems to me there is room with a sales tax to change it's regressivity.

And with respect to Chait's 2nd point, would it not be easier for the tax man to, every year, monitor/investigate/look-at-the-tax-forms-of businesses, given that there are a significantly fewer number of them than there are individuals who file taxes?

hynna and Rhubarbs, you're right not to dimiss a national "sales tax" out of hand, as does Chicken Little Chait.

A tax on consumption rather than production is morally a no-brainer.  The thing about regressive is, as hynna points out, easily adjustable.  For example, in California groceries are not taxed.  And yes, Sweden, as well as many other European countries, has a luxury surtax on top of the basic value-added tax (VAT).  In Denmark cars cost about three times what they do here because of the surtax.  The poor?  The VAT pays, among other things, for fantastic public transportation as well as subsidies for cultural experiences which, in countries like the U.S., only the rich have access to.

Which brings me to VAT, which is not the same as sales tax.  I wonder if Huckabee is being a bit loose with his terminology.  VAT, because of the way it works, does not encourage cheating.  Anyway, it's far easier to hide income than to hide spending.  It's why we already have Chait's dreaded tax police -- they're called the IRS, as well as state tax authorities who, as normal people (presumably not Chait) know, slap liens first and ask questions later.  Anyway, since businesses, to one degree or another, already are criminal enterprises, stationing a cop at each of them wouldn't be such a bad idea.

Though they have different mechanisms, sales tax and VAT are in principle alike.   And that principle -- that consumption should be taxed -- is unassailable.  VAT -- in some European countries it's 25% -- has a track record.  High consumption taxes may in themselves be regressive theoretically, but in the real world, they work and work splendidly, a plain fact knee-jerks like Chait refuse to acknowledge.  Abolish income tax?  Maybe not.  But a high consumption tax would allow us to raise the threshold drastically -- more help for lower incomes -- Oops, another consequence of that nasty regressive consumption tax.

Speaking of lunacy, how about Chait's scenario of rich people enlisting poor people to buy stuff for them, like teenagers enlisting adults to buy them booze?  Now, what bozo did Chait crib for that zinger?  God, I hope it's not his own!

Some of you don't spend enough time reading FT and other business trade publications.  Europeans call the VAT "the greatest thing ever invented", yet as Chait notes and others want to ignore, the Euro's are having massive trouble with the very fraud Chait describes.  The fight in Europe to curb that fraud has been going on for over a year now.  Not only are the Euro's missing out on a quarter billion euro's a year in tax dollars, but they haven't even begun to discuss the amount they'll have to spend on new enforcement plans.

European ministers, liking their VAT tax plan so much, like to point out that so far, all the suggested changes simply move the location of the fraud around.  What's a continent to do?  (yes, I know, Huck's plan discusses a sales tax, but as another poster notes, they're in principle, alike).

A couple quick thoughts about the GOP debate: 1.) There was a lot of talk going into last night about

Landsburg has Huckabee's FairTax EXACTLY RIGHT for the reasons I outlined under his Discussion: snipurl.com/fairtaxslate

As long as Steven Lansford is reading these comments (perhaps still) let me ask him about another aspect of his article.  He says:

SNIP

In the long run, most people, or at least most families, do spend what they earn. (Why earn it if you're not going to spend it?) True, some of us die with money in the bank, but usually our children or grandchildren step in to spend the remainder for us. So, as far as your dynasty is concerned, a 20 percent income tax and a 20 percent sales tax are equally painful.  Except for one thing: With an income tax, you pay up front. Earn a dollar in 2008, and you'll pay 20 cents tax in 2008.... With a sales tax, that 20 cents sits in your bank account earning interest until the day you spend your earnings. Let me say that again: Your pretax earnings sit around collecting interest until the day you withdraw and spend them.

SNIP

But in fact, most people end up going into debt early in life as they pay for education, housing, furniture, raise a family, etc.  So most people would accelerate their payments of consumption taxes, as they spend more than they earn in their early years.

What am I missing?  

Response to ih2005:

Housing and education are forms of saving and so should certainly be exempt from consumption taxes.  The idea is to tax only those things that are consumed in the current year.  If you pay $100,000 for a house that you could have rented for $1000 a month, your consumption this year was $12,000, not $100,000.  That's what you'd be taxed on.

Note that under the *current* system, young workers are taxed more heavily than middle-aged workers.  Here's why:  If you are 30 years old, earn a dollar, and spend it when you're 70, you're taxed on 40 years of interest.  If your are 50 years old, earn a dollar, and spend it when you're 70, you're taxed on 20 years of interest.  One of the big problems with the current system is that penalizes work done by the young more heavily than work done by the old---and hence creates an incentive to delay your productive years. A consumption tax would solve that problem.

A full accounting of the costs and benefits of consumption versus income taxes requires a highly technical analysis that I wish I could summarize here, but I can't.  The bottom line is that consumption and income taxes both discourage work, but income taxes have the *additional* problem of encouraging you to delay your productive years.

The best way to implement a consumption tax is probably not with a point-of-sale tax a la Huckabee but with something like what I outlined in my Slate column:  A tax form that says "How much did you earn?  How much did you save?  Now subtract."  The difference is what you spent, and that's what you'd pay tax on.

Therefore the Huckabee tax plan, despite what Slate's headline writer seems to think, is not brilliant.  It does, however, have big advantages that can also be built into more workable systems.  

---Steve Landsburg

Mr. Landsburg is of course correct that it would be far more effective and efficient to implement a consumption tax by taking income and adjusting for net investment (all investment becomes like one big IRA).  This would also permit an explicitly progressive consumption tax which is why the rocikhead/plutocrats prefer a sales tax or a value added tax.  They like regressive taxation,  They're not interested in flat, they what high earners to pay less than everyone else.

But there are problems:  The rich can consume by buying capital goods -- big house, big boat.  If we are not going to tax the entire purchase as consumption up front, then it has to be amortized into consumption (reverse depreciation), a complexity that ordinary taxpayers don't currently have to deal with.  Also, a consumption tax is inherently regressive because the rich consume a much smaller proportion of their income that the not rich.  Thus, a consumption tax would have to be pretty steeply progressive to offset the inherent regressivity.

Why not start reforming the tax system with a much simpler approach?  A very high zero bracket amount, say $40,000 for a single adult, $70,000 for a couple (including of course same-sex couples), and $15,000 per child.  That's $100,000 for a family of four.  Above that, a single tax rate, same rate for corporations, same rate for inheritance taxes (with a high deductible - $10 million so everyone can get rich).  Eliminate corporate deduction of interest expense and allow dividend distributions free of tax -- gets corporate finance to prefer equity to debt.  Eliminate all personal deductions other than state and local income taxes (another discussion).  Replace payroll taxes with carbon taxes.

While we're at it, if the country needs higher savings, mandate a current trade account balance and run budget surpluses.  The surpluses will have to be saved.

Do this for about 12 years and we will have by far the fairest and most productive economy in the world.  For that very reason, it will never happen.  The monied classes don't want productivity, nor do they want equity.  What they want is money, power, and privileges for themselves.  End of story.

"Note that under the *current* system, young workers are taxed more heavily than middle-aged workers.  Here's why:  If you are 30 years old, earn a dollar, and spend it when you're 70, you're taxed on 40 years of interest.  If your are 50 years old, earn a dollar, and spend it when you're 70, you're taxed on 20 years of interest."

Good god, man!  Haven't you heard of IRAs or 401k plans?  When people save for their golden years, they're not opening up a savings account at the local bank.  Sheesh.

And your use of "interest" is a bit disingenuous.  Certainly dividends and capital gains are what you really mean, since I doubt the low percentage yields of savings accounts and CDs hold much appeal these days.

"The bottom line is that consumption and income taxes both discourage work, but income taxes have the *additional* problem of encouraging you to delay your productive years."

Are you high?  Seriously, do you light one up before coming up with such rock-solid assertions?  I mean, I don't see any 19 year olds delaying work due to the income tax.  "Man, I would work, but did you know I'm going to have to pay taxes on, like, 40 years of gains?  I'm just going to stick it to the man by being broke until I'm 50."  How does strongly do income taxes discourage work as compared to, I dunno, getting high on your parents couch and playing xbox?

Delete the extraneous "does" in the last sentence.  Also, if anyone wants to do a study on the economic effects of getting high and playing xbox, I'm certainly willing to participate.

OK, this is the second post in a row illustrating what has become an unfortunate habit of The Plank so I feel I've got to pipe up here. Why do you guys have to call every idea you disagree with "crazy" or "loony"? I don't want to sound over-sensitive but you guys to this ALL THE TIME and it's REALLY LAZY writing. There are people who really struggle with mental illness, some of whom read  your website, and I really can't stress how offensive this habit is. So why not just call ideas you disagree with "wrong" "ignorant" or "dumb" instead of using "kooky" or "crazy" every single time?

It drives me nuts how we always have this hoopla over poorly-designed consumption taxes.  The Fair Tax, the Flat Tax, eliminating Capital Gains Taxes, and the like, are all horrible ideas.  But neither side really gets it.

Liberals (rightly) lament that these taxes are (1) regressive and (2) will result in perverse incentives that subvert the tax's purported purpose of boosting savings rates.  But liberals never seem to notice that the DESIGN of these taxes matters as much as anything.  Sure, liberals talk about these taxes would fail in practice, but never go once step further and think about either the obvious merits of a consumption tax, or how how a progressive consumption tax might be designed.  I mean, if you want, I can easily design a horribly regressive Income Tax, too.

For their part, conservatives (rightly) argue that we need to start incentivizing savings -- or at the very least, stop punishing saving.  But they always seem to get behind these crazy ideas like the Fair Tax.  The Fair Tax is stupid on its face:

What are we trying to get at here?  Taxing consumption, right?  Well, let's look at a simple formula: INCOME MINUS CONSUMPTION EQUALS SAVINGS.  So, it exempt savings, sales tax advocates want to keep track of consumption and minus it out of income.  The problem is that there are TRILLIONS of consumption transactions every year in the economy.  You couldn't create something more byzantine that a national sales tax.  Why are we trying to measure and the one component of this formula (consumption) that is the hardest to keep track of and the most likely to be falsified?

What few ever seems to notice, or point out, is that we could easily design a consumption tax that is equally progressive as the Federal Income Tax.  Re-jigger the formula above such that INCOME MINUS SAVING EQUALS CONSUMPTION.  Saving is much easier to keep track of than consumption.  Your bank(s) or broker(s) simply need to send you a statement at the end of the year giving the taxpayer what their net savings/investments were: deposits minus withdrawals equals net savings.

Then, as you're doing your tax forms, simply total all your income from all sources (wages, realized stock appreciation, dividends, interest, etc.), then simply subtract (exempt) all all new net saving, and you're left with your net consumption for the year.  This Net Consumption functions just like AGI does under the current tax system: Net Consumption is your taxable income.

From a policy perspective, Congress then simply needs to apply progressive, graduated rates to this Net Consumption.  Viola: a consumption tax with progressivity.  It's essentially a cash-flow tax.  Any money that comes in, that doesn't go to savings, is consumption.  When savings is withdrawn (net "dissaving" for the year) it is taxed just like anything else.  Thus, people have an incentive to save, and to keep their money in savings.

That way, we can stop pretending that we're "incentivizing saving" when we allow a Wall Street executive to sells some of his stocks at a lower capital gains tax rate, and then turns around an buys a foreign sports car.  That seems like incentivizing consumption, to me.

Yeah, yeah, there are details to be worked out (how do we treat debt? Are there other tax deductions (or better yet, refundable credits) that we want in addition to the savings exemption?).  But the point is, some type of personal consumption tax can easily simplify your tax return, while incentivizing savings in a progressive fashion.

I hope we get there some day, not least so we can stop all this blathering about inane ideas like the Fair Tax.

It is indeed insulting to the mentally ill when you group them with supply-side economists, Scientologists, crackpot conservatives and Ron Paul.  

But I think your alternative would be offensive to the ignorant, those who cannot communicate verbally and those who always seem to make poor decisions.  Really, when it comes down to it, the mental illness references are just funnier.  But you're right, it is lazy writing and I wish they would use a little more imagination.  Why call someone's foreign policy proposal merely "insane" when you can call it "totally batshit insane" and still be accurate?

jm_rice - bcbaird beat me to commenting on "Steve Landsburg" assertion about delaying ones production years (guess you get real hungry in the interim) but you've got me with this one: &nbsp;

"Anyway, since businesses, to one degree or another, already are criminal enterprises, stationing a cop at each of them wouldn't be such a bad idea." &nbsp;

Say what?  Care to elaborate much on that one?  Or were you ghost writing for Goldberg in his latest book and equate "businesses" = "facist liberal plots"?

One hopes that, absent a Huckabee campaign effort to defend itself, the media will counter Romney attacks by pointing out how, at Bain Capital, Mr. Romney used offshore corporations to avoid U.S. taxation, and he fee-milked acquired businesses before firing workers and taking them into bankruptcy ( snipr.com/romneyoffshore ), to amass his great $250,000,000 wealth.

So, when you compare how Mr. Huckabee's visionary FairTax advocacy ( http://snipr.com/nextrung ) compares to Romney's interest in the current tax system, it's pretty easy to see who will lead us out of tax slavery ( http://snipr.com/taxburden ) - $265 billion annual tax code compliance costs representing 5 billion wasted hours, annually.

Prendergast - sounds good, except you're ignoring the influence of the lifecycle upon patterns of consumption. Take one example: as soon as one has kids, consumption goes through the roof: diapers doctors hampers bumpers jumpers rompers clothes clothes CLOTHES and toys and outings and meals and parties....

Which leaves you with the choice of either going back to byzantine tax-code complexity and requiring itemization per a thousand kid-related SKUs, or else guessing as to what a reasonable exemption would be for new parents (not easy; varies wildly from locale to locale), or else just skipping the whole issue and screwing over people who choose to have children, which would be about as far away from a forward-looking, enlightened social policy as you can get.

Consumption patterns aside - what are people supposed to do at the end of the year if they've overspent their money on family emergencies, medical bills or, in my case, caseloads of hard liquor?

One of the advantages of our current system is that it makes budgeting fairly easy.  Each paycheck, your approximate tax is withheld.  If you've overpaid (as most do), you get a refund.  In any case, it's fairly easy to adjust the withholding to match what you will actually owe.

For years, I was self-employed.  It was rather nice getting to play with all the money I had earned, until, of course, April rolled around and I suddenly had to scrape up enough cash to pay my taxes.  Luckily, I was good at budgeting and always had enough around, but I hate to think what would happen if I had car trouble or housing issues around that time.

So yeah, taxing strictly consumption SOUNDS like a great idea to some, but frankly an income tax is simpler and we can still add consumption taxes on things we wish to curtail the use of, like gasoline, electricity and Hannah Montana albums.  IRAs and 401k plans encourage saving fairly well, although it would be nice if some of the restrictions of those plans were loosened to encourage more saving.

Could we make the income tax's cost of compliance less?  Of course.  Right now the tax code is rife with rather obscure and confusing perks, exceptions and penalties.  But it's not THAT bad, most Americans can get by with a $30 copy of TurboTax and a couple hours of their time.  So instead of focusing on some wacky consumption-based tax structure, it would be much more productive trying to make the existing system more efficient.

Exactly right Teplukhin.

What's so wrong with taxing income?

actually, teplukhin,

You've created a straw man.

Congress could easily carve out an average per-child consumption exemption.  You could have a per-person consumption exemption.  We do it under current law (the standard deduction and personal deduction).  It's not that hard, nor is it complicated.

Ignorant Populist,

There's a wealth of information on what's wrong with taxing all income, and I suggest you do some research.  But at base, the problem is not so much "taxing income" as it "taxing SAVED income," which is what we do under current law.  Given the horrible U.S. saving rates and the fact that the U.S. has become a debtor nation, that's just plain stupid.