Wrong. The strength of the economy is not based on people spending money. It's based on productivity. A consumption tax increases productivity. An income tax discourages it. This is according to what I heard Alan Greenspan tell Chris Matthews during an interview on MSNBC. Matthews brought up the topic of the fair tax during the interview and the way he introduced it made me think he was expecting Greenspan to trample all over it. Instead Greenspan said it was an idea that made a lot of sense. When Matthews asked him about spending is when he gave the answer I just did. The other thing you're ignoring is that people will have more money in their pockets, so at best it's a wash. In effect, an income tax is a punishment for being productive. That's why I don't like it. If Chino is right that the end result is the same (and I doubt every economist would agree with that), I'd still rather have a consumption tax.

I discount any source when the source is merely stating an opinion. If they provide fact or solid evidence, I am on board.

You seem incapable of distinguishing between fact and opinion with newspapers.

Sure, I'd have incentives to work more and be more productive b/c I'd keep 100% of what I earn from that productivity, but I'd be much less likely to spend it. I'd see a consumption tax as a remarkable opportunity for a net gain in my income by being much more circumspect in what I buy. Plus, it's the natural inclination to not buy something when it's being taxed to hell, even if we'd have more money in our pockets b/c of no income tax. And if our economy is based on productivity, you need consumers to buy what's being produced.

And if you don't spend that money you're not going to just stick it under your mattress, are you? You'll invest it, start your own business, etc., thus still supporting the economy in a different way. The media doesn't understand economics very well and makes us think consumers spending money at the retail level is all there is. You'd do something with that money. It's silly to think you wouldn't. And if businesses aren't paying income tax, competition will probably force them to pay some of that sales tax by lowering prices. Meaning, you probably wouldn't pay the full brunt of it anyway.

I'll go on record and say that if we switched from the income tax to the fair tax you would see the biggest economic boom in the history of mankind.

But businesses would pay a huge consumption tax too on whatever they bought, right? And I wonder if they have the same incentives to view a consumption tax as an opportunity to increase their income by consuming less . . .

Seems like a consumption tax would be a huge boon to industries with few capital needs . . . like banks.

You're right, I would definitely put the savings to work. And it would again be the banks who would be competing to put my money to work for me. But they wouldn't have to pay a consumption tax when I deposited it with them, unlike auto companies buying steel or the Gap cotton.

Businesses would not pay consumption tax

No, they would not. The fair tax is only for the retail level, not business to business or on investments. You also wouldn't be paying social security tax, capital gains tax, amt, inheritance tax, payroll tax or federal gas tax, among others.

I get it -- then banks would have even more capital to lend to industries with large capital needs, and *expand* goes the economy . . . Hmmm, I see reasons why a consumption tax would result in an economic uptick.

But wait! I just thought of a reason why I HATE the consumption tax -- it would be make cities even more dependant on sales tax revenue, and result in even more commercial sprawl; more emphasis on creating ways to gather in the sales tax revenue. We think the government encourages us to spend money now, boy I'd hate to see government tactics with a consumption tax. Government dependent on my spending for its revenue scares me. Based on government efforts, maybe overall saving would actually go down; and that would be a bad thing.

I'm just working from the first principles of my gut here; I'm confused; help.

You're now talking about local taxes. I'm talking about federal. Nothing would have to change with how states and cities finance themselves.