I retire and only consume. Why is this good for me? I've been frugal to get to this point. Now the rules change? Am I missing something? I have to collect tax from my renters? Property purchases have a 30% tax? My savings just took a huge hit. Vacations cost 30% more. Am I missing something?
No, that's the way it will work. Fortunately, when you retire you probably already have your home, and a couple good cars, and all the clothes you will ever need. But, that tax on the food system from the farmer to the table is going to really suck. Tax each step @30% , I bet a lot of items get steps of a process taken over by one entity. That would be the competitive advantage, our company does steps 1-17 all as one transaction saving the 30% hit on taxes at every stop.
You would see general contractors spring up who did 100% of the work in house so that the final bill only had 1 30% tax. That would certainly kill the competition who taxed the framing, concrete, plumbing, electric, HVAC, drywall, flooring, cabinets, siding , roofing all seperate. On a $500,000 home all those subs being taxed at $30% on $425,000 (general gets $75,000 for their work) would be $127,500 in tax (not including the taxes those subs would pay for their materials meaning they would have to charge more) added before the general finally sells you the house . So at the minimum that $500,000 house becomes $500,000 +127,500= $627,500 @30% = $188,250 tax. $627,000 plus $188,250 = $815,750.
Of course you really won't get it that cheap as every step prior to your subs purchasing their materials will also contain the 30% increases. So I would be willing to bet homes would be about double what they are now.
Remember Hillary's VAT (value added tax) of the 1990's? Same problem would have occurred with that, inflation of 20-30% would be common.
Imagine how broke Medicare /Medicaid would be getting hit with all those 30% tax rate on healthcare?