By the time you add taxes and fees that aren't in the actual revenue code and state sales tax, you're back to the old rate. I envision a lot of stuff "falling off trucks" nationwide.
By the time you add taxes and fees that aren't in the actual revenue code and state sales tax, you're back to the old rate.
That 43% is federal FICA plus highest marginal rate of the individual income tax as far as I can figure.
The figure I generally point to is the average federal total rate based on gross income:
| Effective Total Federal Tax Rate (Percent of gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| All Families | 22.8 | 23.4 | 23.5 | 21.4 | 21.8 | 22.6 | 22.5 | 22.6 | 23.5 | 24.7 | 24.2 |
Data from IRS collections statistics and The Bureau of Economic Analysis as compiled in tabular form by the Congressional Budget Office.
http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0
The NRST replaces 95% of total federal taxes, all income and payroll(FICA etc) taxes, and gift/estate taxes.
A National tax bill can't do anything for state taxes and fees, that is something that is out of federal authority to say anything about. The average figure for total state taxes with respect to gross income is around 10% that's both state income & sales taxes.
I envision a lot of stuff "falling off trucks" nationwide.
No more than today, with cash economy losses under the income tax. IRS estimates 15-20% losses there, with a 24% of gross income taxes and marginal rates as high as 43% and all that is required to evade the income tax as one person deciding not to report/file a return.
The maximum marginal rate for the NRST is 23% of purchases as opposed to gross income, and has the additional risk of requiring two persons in collusion to evade the tax, a buyer plus a seller. At that rate it a higher risk for less potential gain. One could expect better compliance with the NRST and at least no worse.