Wahbooz, I’m aware of no government so foolish as to hinder those choosing to invest within their jurisdiction.... But a sales tax to replace the FICA and Medicare tax will not provide the proper funding for Social Security, because money has to be spent to pay a sales tax. Unless you plan on putting a sales tax on investments, the funding of Social Security and Medicare will be unfairly carried out by working people. And even then, with tax shelters, a certain sector of society will still escape unscathed.
I do agree that income is income regardless of the source; I’m opposed to favorable tax treatment of incomes due to their sources or the methods by which the incomes were attained; (I’m opposed to “special strokes for special folks”).
Sales taxes are a simple method of taxing consumption taxing almost all general sales transactions are usually flat rather than progressive or regressive taxes, They can to a limited extent be drafted to be somewhat more progressive.
Venders in many jurisdictions have learned to their sorrow that conspiring with customers to evade their governments’ sales taxes are likely to be of financial and legal costs to themselves and their enterprises. Federal sales taxes upon products purchased or shipped overseas would legally be evaded (unless or until the products enter or returns to the USA).
This proposed policy change of funding Medicare and half of Social Security retirement and long term disability costs is certainly less regressive than our federal FICA tax based upon payrolls. It will (more than otherwise) to some extent increase tax revenues and will not increase the tax burdens upon wage or salary earners.
Respectfully, Supposn