National Sales Tax Promoted as Fairer System

[rhino 0]

http://www.foxnews.com/story/0,2933,131693,00.html

I REALLY hope this happens some day..

That would kick ass...

[Viking 0]

What the hell?!?! a political thread in Bonfire?


*elbows rob*

I swear you must have footprints on the back of your helmet - chicagoskydiver
My God has a bigger dick than your god -George Carlin

[Jib 0]

23% would kick ass? I dunno about that or prebates -- exclude unprepared food and give a twice a year break on clothing. Also, how do you treat a leased car: like NJ, paid up front like you bought it or on each payment?

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the depth of his depravity sickens me.
-- Jerry Falwell, People v. Larry Flynt

[TomAiello 26]

It would be much healthier for the economy, too. I'd imagine savings rates would take a bit of a jump...

-- Tom Aiello

Tom@SnakeRiverBASE.com
SnakeRiverBASE.com

[ahegeman 0]

Not to mention how helpful it would be for everyone to actually see how much of their money is being hoovered up by the government. Income tax withholding makes it too easy to ignore.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[billvon 3,120]

>Income tax withholding makes it too easy to ignore.

Those people stupid enough not to be able to read their paychecks will be no better at reading their receipts from the store.

[billvon 3,120]

I'd be in favor of that, as long as there is a way for the poor to buy basics without paying the tax. (i.e. a 'poverty' card that lets you buy your $10k a year worth of basic food and clothing without being taxed.) You do realize that the tax would have to be 35-40% under the current spending plans to balance the budget, right?

[chutem 0]

What about private sales? If I sell you a $2500 rig do we give uncle sam an extra 23%? If this happens the "black market" will really boom. It also would put a lot of people out of work, IRS and Income tax profesionals. Don't get me wrong I never mind seeing the gov. miss a few $$$ and certainly won't cry if the IRS assholes lose their jobs. A "fair" tax system for everyone is what we need. Problem is it will only seem fair if it benefits me/you.

James

[Gravitymaster 0]

Quote

I'd be in favor of that, as long as there is a way for the poor to buy basics without paying the tax. (i.e. a 'poverty' card that lets you buy your $10k a year worth of basic food and clothing without being taxed.) You do realize that the tax would have to be 35-40% under the current spending plans to balance the budget, right?

Please back up this statement. Apparently you have no clue as to how much the average person pays now. Start adding up what we pay in gasoline, utilities, corporate (you do realize corporate taxes are a back-ally way of charging the consumer, right?) natural gas, heating oil,etc..etc..

[rhino 0]

Quote

IRS and Income tax profesionals.

Good riddens........

[billvon 3,120]

>If I sell you a $2500 rig do we give uncle sam an extra 23%?

Closer to 35%, but absolutely. If you don't pay the tax you go to jail.

>If this happens the "black market" will really boom. It also would
>put a lot of people out of work, IRS and Income tax profesionals.

Don't worry; the cops, judges and prison guards they will need to hire when people start selling rigs on the black market will more than make up for the missing IRS. Or perhaps the IRS will simply take over that job; after all, they will have to have the ability to track every dime you make to ensure nothing changes hands without having a tax attached.

> A "fair" tax system for everyone is what we need. Problem is it will
>only seem fair if it benefits me/you.

Agreed. And even some of the proponents of a sales tax will balk (I suspect) when they realize what it really means - every sale of a good or service, everywhere, will be taxed. Sell something on ebay, or to a friend? Gotta file a tax form. Buy some stock? Pay a tax. It ends up being not too different from an income tax in the long run.

[billvon 3,120]

>Apparently you have no clue as to how much the average person pays now.

The average filing taxpayer paid $13,000 in 2003; he would have had to pay $16,000 to balance the budget. Average income in 2003 was around $43,000.

Now, let's say we do it the easy way - every taxpayer spends what he takes in. In 2003, we needed 2.1 trillion to operate the government. Divide that by the number of taxpayers and we have $16,000 per person; each person would have to pay 37% of their income to support the government if that was the government's only source of income. If they spend what they earn, then they have to pay a 37% sales tax. If they save some, that number edges closer to 40%. If we exempt the very poor from paying tax on food and clothing (which I think you have to do out of compassion) it edges up higher still.

"But wait" - you say. "What about the other people, the kids who don't file any income taxes, or the wives of the people filing separately?" True, kids will spend some money. But it's going to be a _very_ small part of the overall amount, because they make so little now that they're essentially ignored by the IRS. Wives (or husbands if their wives file) will also spend money, but that original average was based on two people filing as one, and thus if you split it in two it has the same effect either way (i.e. their income would fall by 50% but there would be another person filing.)

"But wait again" you say. "What about corporations?" Currently, corporations do not pay sales tax on things intended for resale; thus, they would avoid much of the tax burden they currently carry. There would be some tax penalty accrued for capital equipment purchases, real estate purchase, tools etc but they would carry a _much_ lower tax burden than they do now - and that means we're back to relying on the taxpayers for that nearly-40% sales tax.

The truth that a lot of people don't want to admit is that we will pay, one way or another, for every cent the government spends. If you want to reduce taxes, then reduce goverment spending. Anything else is just cooking the books; you may delay the payment or make the rich (or the poor) pay more of it, but it's all coming out of your (collective) pockets. If a sales tax is easier to administer, great - it would reduce the amount of money we need to give the IRS. But to dream that a sales tax would mean that we can pay less isn't reality. It's just a new way to pay the same old taxes.

[nanook 1]

I always wondered what would happen during periods where people are not spending for whatever reason, depressions and such, if we had a National Sales Tax. What about the stock market? No IRS, no collections on sellings. That probably means taxing when you are buying. What about IRA contributions?and also since state and local taxes aren't part of the 16th amendment, will these taxes rise/start to compensate? Or are these guys going to write up an amendment that will abolish them.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[mnealtx 0]

I've long been in favor of a SMALL flat income tax (10%, say) combined with a reasonable national sales tax.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[Gravitymaster 0]

1.Compliance with tax filings is currentlt over $150 billion per year. A NST would reduce this figure by approximately 90%.

2.Businesses would be less likely to relocate overseas as the corporate income tax would be eliminated, thus creating more jobs (a favorite election year whine from the left).

3.NST would encourage more foreign investment.

4.Would eliminate an intrusive government agency. (You guys whine about the Patriot Act, but seem to have no problem with the IRS.

5.Would recover billions of $$ currently hidden from taxes in the underground economy ie. cash transactions.

These are just a few of the advantages you failed to consider in you calculations. I will post more later to refute most of your claims.

[PhillyKev 0]

National sales tax, especially one that high, is completely assinine. There would be a black market and boot legging of every consumer product known to man. You think drug dealers are violent when they protect their territory? Wait until this is going on.

[kallend 2,151]

Quote

1.Compliance with tax filings is currentlt over $150 billion per year. A NST would reduce this figure by approximately 90%.

2.Businesses would be less likely to relocate overseas as the corporate income tax would be eliminated, thus creating more jobs (a favorite election year whine from the left).

3.NST would encourage more foreign investment.

4.Would eliminate an intrusive government agency. (You guys whine about the Patriot Act, but seem to have no problem with the IRS.

5.Would recover billions of $$ currently hidden from taxes in the underground economy ie. cash transactions.

These are just a few of the advantages you failed to consider in you calculations. I will post more later to refute most of your claims.

You might wish to explore the European experience and find out how (un)popular their national sales tax (VAT) is. Why do you think the US government can do it better?

...

The only sure way to survive a canopy collision is not to have one.

[Gravitymaster 0]

Quote

Quote

1.Compliance with tax filings is currentlt over $150 billion per year. A NST would reduce this figure by approximately 90%.

2.Businesses would be less likely to relocate overseas as the corporate income tax would be eliminated, thus creating more jobs (a favorite election year whine from the left).

3.NST would encourage more foreign investment.

4.Would eliminate an intrusive government agency. (You guys whine about the Patriot Act, but seem to have no problem with the IRS.

5.Would recover billions of $$ currently hidden from taxes in the underground economy ie. cash transactions.

These are just a few of the advantages you failed to consider in you calculations. I will post more later to refute most of your claims.

You might wish to explore the European experience and find out how (un)popular their national sales tax (VAT) is. Why do you think the US government can do it better?

You might want to check out Russia's 13% flat tax. You might also consider the hysteria raised when Reagan reduced the top tax rate from 70% to 28%.

Don't get me wrong, I realize the gov't is going to spend every nickel they can get their hands on and then some. I am not an advocate of a simple NST. I do however, think it is possible to combine a NST with a flat tax. I also think getting rid of a huge Govt. agency can do nothing but benefit all taxpayers in the long term.

I would think Liberals would be against a Govt. agency empowered to enter your home, take everything you own, close down your business, seize property and bank accounts and essentially leave someone and their family homeless, simply because they fell on hard economic times and got behind in their taxes.

[kallend 2,151]

I ask again:

WHy do you think the US Government bureaucracy can do it any better than the Dutch, British or Germans? VAT is hugely unpopular.

...

The only sure way to survive a canopy collision is not to have one.

[billvon 3,120]

>2.Businesses would be less likely to relocate overseas as the corporate
> income tax would be eliminated, thus creating more jobs (a favorite
> election year whine from the left).

Agreed; it would be great for businesses, because consumers rather than businesses would take on more of the tax burden.

>3.NST would encourage more foreign investment.

Agreed; see above.

>4.Would eliminate an intrusive government agency.

Are you kidding? You'd need a whole new government agency (or have to re-task the IRS) to investigate people selling each other cars, rigs, food, etc. Your bank accounts would have to be a lot more visible to the government; where your money goes now equals what you are taxed on, whereas right now once you earn money (and pay income tax on it) it's yours.

>5.Would recover billions of $$ currently hidden from taxes in the
>underground economy ie. cash transactions.

Agreed - by creating a massive new government organization to track them down.

>These are just a few of the advantages you failed to consider in you
> calculations. I will post more later to refute most of your claims.

You agreed with most of my claims!

[mnealtx 0]

Quote

I ask again:

WHy do you think the US Government bureaucracy can do it any better than the Dutch, British or Germans? VAT is hugely unpopular.

Maybe because we don't have Hillarycare adding umpteen % to the flat income tax? [;P]

Actually, I think we'd have a BIT better chance of it being not as unpopular just because we don't have all the extra stuff coming out that most all of the Euro countries do.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[billvon 3,120]

>I would think Liberals would be against a Govt. agency empowered to
> enter your home, take everything you own, close down your business,
> seize property and bank accounts and essentially leave someone and
> their family homeless, simply because they fell on hard economic times
> and got behind in their taxes.

OK, and then you say:

> I do however, think it is possible to combine a NST with a flat tax.

So you'd be in favor of creating a NEW government organization (the Sales Tax Revenue Service) who can go into your bank records, search your house and confiscate your property? I think you might have an overly rosy picture of how many people would voluntarily comply with a tax law that required you to pay taxes on the used car you sold your friend.

[Gravitymaster 0]

Quote

>I would think Liberals would be against a Govt. agency empowered to
> enter your home, take everything you own, close down your business,
> seize property and bank accounts and essentially leave someone and
> their family homeless, simply because they fell on hard economic times
> and got behind in their taxes.

OK, and then you say:

> I do however, think it is possible to combine a NST with a flat tax.

So you'd be in favor of creating a NEW government organization (the Sales Tax Revenue Service) who can go into your bank records, search your house and confiscate your property? I think you might have an overly rosy picture of how many people would voluntarily comply with a tax law that required you to pay taxes on the used car you sold your friend.

Why do you assume a huge govt. agency would have to be created to moniter bank accounts, if I'm paying a sales tax on purchases?
There isn't a Federal tax on automobile purchases. That tax is collected by the DMV at a state level when an automobile is registered.

While it's true that some govt agency would have to be created to administer a flat tax, it wouldn't have to be anywhere near the size of the current IRS because the complexity of it's function and enforcement would be on a much smaller scale.

[billvon 3,120]

>Why do you assume a huge govt. agency would have to be created to
> moniter bank accounts, if I'm paying a sales tax on purchases?

Because instead of just monitoring employers, the IRS now has to monitor anyone who sells anything to anyone else. That's a lot more people to keep track of.

>There isn't a Federal tax on automobile purchases. That tax is collected
>by the DMV at a state level when an automobile is registered.

Right, but in the national sales tax proposal, you'd have that state tax _plus_ a national sales tax, administered by a separate organization.

>While it's true that some govt agency would have to be created to
> administer a flat tax, it wouldn't have to be anywhere near the size of
>the current IRS because the complexity of it's function and enforcement
> would be on a much smaller scale.

If there are no loopholes, and you're talking about _just_ the income tax side of things - I'd agree, we can reduce the size of the IRS. We'd still need the new governmental organization to administer the sales tax though (or we'd have to grow the IRS if it took care of that as well.)

[Gravitymaster 0]

Quote

Since instituting a flat 13 percent personal income tax, the old Soviet bear has been transformed into a raging bull. In 2001, income taxes rose 47 percent, 28 percent if adjusted for inflation, and in 2002 real tax revenues rose another 20 percent. During this period economic growth averaged about 4.6 percent while many other countries' economies around the world continued to stagnate or contract. Even The New York Times begrudgingly conceded, "Russia imposes flat tax on income, and its coffers swell." Before Russia adopted its flat tax, countries that had adopted a pro-growth tax system were small city-states like Hong Kong and small countries including Latvia and Estonia, all of which benefited from the flat tax.

Following the success of the Russia model, the Ukraine has recently passed legislation that would scrap a five-tier progressive tax scheme with a 13 percent flat tax.

Regional tax competition spurred by the success of the Russian flat tax has compelled Communist China to consider adopting a flat tax by reducing their 45 percent top personal income tax rate to a more reasonable 20 percent. In the 1980s, Prime Minister Margaret Thatcher and President Reagan enacted tax rate reductions that forced countries around the world to cut tax rates in order to remain competitive. It would certainly be ironic if former Soviet Russia and Communist China were the catalysts of pro-growth economic policy at the beginning of the 21st century.

With a new 15 percent maximum tax rate taking effect in January 2004, Iraq will have a competitive advantage over regional competition. In Saudi Arabia, the top income tax rate is 30 percent and the top corporate income tax rate is 45 percent. In Iran, the top income tax rate is 54 percent, as is the top corporate tax rate. And Syria has a top income tax rate of 64 percent.

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