Kossacks,
I've read about a new tax system recently that has me really intrigued. It's called the Automated Payment Transaction tax, or APT. You can read more about it here:
http://www.apttax.com/
Essentially, it replaces almost every tax you can think of - sales, gas, income, all of it - and replaces it with a small micro-tax imposed on every electronic transaction. Basically, every time the money moves, the government gets a cut.
I find this idea fascinating, truly progressive, and easy to implement. Therefore, I am instantly suspicious. Plus Glenn Beck likes it, so there must be something wrong with it. So I'm posing the question to the community - why is this a bad idea?
I can only find one real downside so far - since there will no longer be deductions of any kind, there is less incentive for charitable giving. Beyond that, I think this plan is genius in its simplicity.
- It is truly progressive. Poor people can exempt themselves from almost all tax by using cash (no serious transaction is ever done with cash anymore).
- It removes all loopholes. Even if you decide to offshore your funds, if you want to use them here, they will be taxed.
- It discourages day trading, bringing more stability to the stock market. It encourages long term investment.
I could go on like this for a while, but you all can read for yourselves.
What I can't find are serious critiques of this plan. Does anyone know why we shouldn't be doing this?