Newsgroups: can.general Path: utzoo!henry From: henry@utzoo.uucp (Henry Spencer) Subject: Re: Flat-Rate Tax Message-ID: <1989Sep26.155329.15498@utzoo.uucp> Organization: U of Toronto Zoology References: <1989Aug26.214344.24140@utzoo.uucp> <1989Sep25.123029.20626@lsuc.on.ca> Date: Tue, 26 Sep 89 15:53:29 GMT In article <1989Sep25.123029.20626@lsuc.on.ca> dave@lsuc.UUCP (David Sherman) writes: >What you're overlooking is that if there's no taxation at the corporate >level, there is a very strong incentive to leave funds in the >corporation, whether they are invested in bank deposits, the >stock market or anything else. This would create a bias to >investment over consumption... Comparing rates of investment, as opposed to consumption, here to those in, say, Japan, this clearly is an area that could use some biases in its favor. >... It would also be inequitable unless >you allow those earning income directly (not through a corporation) >to defer taxation on all invested income as well... Sounds plausible to me, although it might be necessary to exempt things like small savings accounts simply to keep paperwork under control. >... when you examine it carefully you realize it's much >like the GST -- a pure tax on consumption (i.e., everything you >don't save). While I would be somewhat unhappy with this in a personal sense, given that my current cash flow tends to go to consumption rather more than investment, I would have to concede that a greater bias toward investment is almost certainly in the long-term best interests of the economy. -- "Where is D.D. Harriman now, | Henry Spencer at U of Toronto Zoology when we really *need* him?" | uunet!attcan!utzoo!henry henry@zoo.toronto.edu