Democratic presidential nominee Sen. John Kerry (news - web sites), D-Mass., speaks to people at California State University-Dominguez Hills in Carson, Calif. on Thursday, Aug. 12, 2004. (AP Photo/Laura Rauch)
Posted on 08/12/2004 3:03:02 PM PDT by NormsRevenge
CARSON, Calif. - John Kerry (news - web sites) said Thursday that President Bush (news - web sites)'s musing about a national sales tax is an insult to financially struggling voters and would amount to "one of the largest tax increases on the middle class in American history."
The Democratic presidential nominee, during a speech at California State University, Dominguez Hills, tried to reverse partisan stereotypes by portraying the Republican president as the tax raiser and himself as a tax cutter.
Kerry said if Bush wants to create a national sales tax without increasing the deficit, people will end up paying at least 26 percent more for purchases on top of state and local sales taxes.
"We know exactly who that's going to hurt," Kerry said . "That's going to hurt small business. It's going to hurt jobs. It's going to hit the pocketbooks of those who need and deserve tax relief most in America."
Bush has suggested that overhauling the tax code would be a second-term priority if he is re-elected. While campaigning in Florida Tuesday, he said replacing the income tax with a federal sales tax is "an interesting idea that we ought to explore seriously."
Kerry seized on Bush's comments even as White House officials downplayed the idea and denied that any such plan is under consideration.
Kerry said Bush has failed to offer a plan for improving the economy in his second term. He said the president's tax cuts have resulted in a tax increase on the middle class because their state and local taxes have been increased to compensate for loss of revenue from the federal government. He said a national sales tax would only further burden the middle class.
"I call it one of the largest tax increases on the middle class in American history," Kerry said. "And this is coming from an administration that has offered almost no new ideas for our economy, and the few ideas that they have offered have only hurt middle class families. This new idea is no different."
Kerry repeatedly invoked the memory of better economic times under another Democratic president, Bill Clinton (news - web sites). He said Clinton's advisers were helping craft his economic plan and that he will be "a champion for the middle class" by cutting their taxes while lowering the deficit.
Kerry said he would offer tax breaks to help pay for health care premiums, child care and college tuition, paid for by repealing Bush's tax cuts for people earning more than $200,000 a year.
"They will go back to paying the same taxes they paid when Bill Clinton was president," Kerry said. "That was a time when every American rich got richer."
Bush campaign spokesman Steve Schmidt said Kerry cannot pay for his tax plan.
"John Kerry's numbers don't add up," Schmidt said. "He has spent his tax hike more times than anyone can keep track of."
He was also fighting Bush campaign's charge that Kerry has a long history of voting for higher taxes during his 19-year career in the Senate.
Didn't Clinton sign the largest tax increase legislation in history?
Now that's sKerry! :-o
Democratic presidential nominee Sen. John Kerry (news - web sites), D-Mass., speaks to people at California State University-Dominguez Hills in Carson, Calif. on Thursday, Aug. 12, 2004. (AP Photo/Laura Rauch)
Kerry sure moans and complains a lot. Maybe Kerry still has some rice stuck in his butt?
The national sales tax IS a bad idea. The most absurd thing about it is that when they calculate the rate, they do so in such a way that it appears to be smaller than it is.
For example, let's say the tax rate is 30%. If you buy something for $1.00, you pay $.30 in taxes, for a total of $1.30. But when proponents of the sales tax calculate the tax rate on that purchase, they divide the amount you pay in tax, $.30, by the TOTAL, $1.30, which makes the tax rate look like 23%. Very dishonest way to advance the agenda.
The Coalition of the Whining.
Obviously Kerry has NOT actualy read the proposal for the National Sales Tax.
John F*ckin' wants to keep the IRS around. You go boy, you go!!!
NRST ping time, AG...
Hillary Rodham Clinton
(July 3, 2004)
We're talking about REPLACING the income tax, NOT adding a new tax on top of the existing one. Kerry's being completely dishonest when he characterizes a national sales tax as a "massive tax increase" upon the American people. Disingeneous rhetoric coming from the man who wants to raise taxes on the rich.
Yeah, being able to keep our own money is a BIG insult...
Scares ya a bit, Kerry? You Dems will never get back in power if we abolish the IRS!!!
If you would like to be added to this ping list let me know.
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:
H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information: http://www.fairtax.org & http://www.salestax.org
Kerry likes to mock GWB and to appropriate his words. Little does he know he will have his a@@ whooped by a more Anerican Aristocratic Family.
Exactly. What Kerry's afraid of is if the IRS is gone, there goes the Democrats' "class warfare" card. They will no longer be able to play off one set of Americans against each other on the basis of how much they make. The end of the IRS means a permanent on going tax cut for the American people. The Democrats cannot accept such a development and still remain a viable party.
One way (there are others) to make a national sales tax work is to give low and middle income Americans a sales tax rebate based on their income. Higher income will not get any rebate. Set it up to be an automatic thing that occurs every month and few will complain.
The funny thing about all of this is that there are so many low and middle income people out there that truly believe that the wealthy never actually spend their money. They think the wealthy are like Scrooge McDuck and just have rooms of money laying around when in fact it is being spent hand over fist just like any other income class, just on much more expensive items such as business investments, travel, real estate, etc.
This plan actually would tax the rich so of course Kerry is against it.
Thanks for the ping, geez. I just saw a replay of Kerry's comment on the national sales tax, making it sound like the sales tax is to be added to all existing taxes. "Greatest tax increase on the middle class in history." That's the kind of deceptive confrontation we have had from the left wing in the past, so we know what our objective in this election must be.
Actually the price of everything should decrease if the effect of corporate taxes are no longer calculated into the price of goods, even with the sales tax included. Stuff that costs $1.00 now, includes about $.50 in taxes in the price. The final cost of the product with a 30% sales tax would be $.65.
. The most absurd thing about it is that when they calculate the rate, they do so in such a way that it appears to be smaller than it is.
*** snip ***
Very dishonest way to advance the agenda.
Interesting, that is precisely the way federal income & payroll taxes, the Flat Tax, and other income based taxes are computed. On the basis of the income the tax is paid out of.
But when proponents of the sales tax calculate the tax rate on that purchase, they divide the amount you pay in tax, $.30, by the TOTAL, $1.30, which makes the tax rate look like 23%.
As far as whether or not one should use tax inclusive or tax exclusive measurements for comparison purposes:
| The Wrong Camera: The Denominator of the Tax Incidence Equation. Dan R. Mastromarco; LLM, Argus Group, Washington D.C. Tax Analysts Document Number: Doc 1999-32575 Citations: (October 8, 1999) B. Use a Consistent Size Screen to Portray It. [118] When considering the rate of a national sales tax, or any tax for that matter, one must always decide which of two distinct means of portraying this rate -- the "tax-inclusive rate" or "tax- exclusive rate" -- best expresses the tax burden. Which one we employ changes absolutely nothing in terms of the taxes that are actually raised or paid by the taxpayer under the taxing regime examined, in the same way that measuring a journey in inches or meters does not change the distance. However, how the rate is presented changes how the relative tax burden is perceived by those who wish to compare the merits of competing tax proposals. Confusion results when we compare alternatives under different measuring scales. [119] The sales tax is particularly susceptible to this confusion because state sales taxes are normally expressed on a tax- exclusive basis, while income, estate, and payroll taxes, as well as the Flat Tax and other VATs, are normally expressed on a tax- inclusive basis. If we were to express a sales tax rate as a percent of the product price as is done in the states, we would be unfairly overstating the burden of the tax when we compare it to what it is meant to replace at the national level. Or conversely, we would be greatly understating the relative burden of the federal income and payroll taxes for those who don't have time to learn the different measuring systems. [120] Presentation of a rate of tax on a tax-exclusive basis simply means that the rate of the tax is expressed as the tax paid over a base determined after the tax was already imposed (for example, taxable income under our personal income tax system that is net of the tax). In other words, a tax-exclusive rate would be defined as: $ tax paid [121] The rate therefore reflects the ratio of taxes paid to what is left in the base, such as net of tax income. [122] On the other hand, defining the rate of tax on a tax- inclusive basis simply means that the rate of the tax is expressed as the tax paid over the base before the tax has been imposed. In other words, a tax-inclusive rate would be defined as: $ tax paid [123] Since the base of the tax before the tax is imposed is always more than the base after tax (the denominator is greater), expressing the tax in a tax-exclusive way will always yield a higher rate. In other words, it will express the tax as having a higher burden. /56/ [124] Let us take the following example.
[125] Clearly, one might say that the income or Flat Tax rate is the lower rate, 20 percent, since the taxpayer paid $200 on $1,000 of pretaxed income. That is because the income tax and VATs are normally looked at (unquestionably looked on) on a tax-inclusive basis. However, when we view traditional state sales taxes we might say that the state sales tax rate needed to raise $200 of revenues is 25 percent, even though the sales tax rate raises the same amount of revenue as a 20 percent tax-inclusive income or Flat Tax rate. The taxpayer would be considered to have paid the tax at a 25 percent rate since the taxpayer paid $200 of tax on $800 worth of goods exclusive of tax. That is because the state sales taxes are normally looked on on an after-tax or tax-exclusive basis. To use our formula for tax-exclusive representation: $ tax paid or, $200/$800 or, 25 percent. [126] Which is the correct way of expressing this rate? To the casual observer, it is obvious which tax to prefer. All else being equal, one would prefer a 20 percent rate over a 25 percent rate. But that same person may be surprised to find out that they are saying the same thing, and paying the same tax.
[127] The problem with using a tax-exclusive basis for determining the rate of a national sales tax and a tax-inclusive base to portray the income tax is that it can be very misleading. Let us look at a taxpayer who is at the top marginal rate under each taxing scheme. The tax-inclusive and tax-exclusive rates would be compared as shown in the charts just above and just below.
[128] In the tax-inclusive chart, we see comparisons that we are used to seeing. This chart reflects the maximum marginal rate of the current personal income tax system as 43.3 percent. /57/ Here the sales tax rate is 23 percent and the Flat Tax rate is 32.3 percent, reflecting the combined payroll and Flat Tax burdens. /58/ But the tax-exclusive chart indicates that the income tax with the payroll tax bears a maximum marginal rate that is 75.8 percent of the tax- exclusive base. Even the federal individual income tax alone reflects a maximum marginal tax-exclusive base of 43.3 percent. According to the chart above, the Flat Tax bears a maximum marginal rate of 47.7. The FairTax plan bears a maximum marginal rate of 29.9 percent. In this chart, the taxes paid are calculated as a percentage of what remains after tax. [129] In making comparisons between alternative taxing systems it is important to ensure therefore that these comparisons are consistent, fair in terms of expectations, and are well explained. Fair comparisons eliminate and do not exacerbate confusion over a relatively critical point as the means of expressing the tax rate. The only means to do so is to ensure that a tax-inclusive rate is compared with a tax-inclusive rate. Footnotes:
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Exactly. A consumption tax means the end of tax shelters and other loopholes the rich employ to evade paying their fair share of taxes. Unlike in the current income tax system, EVERY ONE pays. No wonder Kerry's against the abolition of the income tax.
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