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National Retail Sales Tax proposal gains momentum for real tax reform
News Target ^ | November 12, 2004

Posted on 11/12/2004 9:45:11 AM PST by Tumbleweed_Connection

If there's one thing to like about the Republicans, it's the fact that they support tax reform. In theory, at least. The party hasn't produced any meaningful tax reform in decades, but now there's talk of a revolutionary overhaul that could end taxes on the poor, eliminate the IRS, and greatly simplify taxes for all Americans. It would free up billions of dollars in productivity that are now wasted on filling out tax paperwork, crunching numbers, and arguing with the IRS over how much you already deposited on what date and for what purpose.

The Democrats, for some reason, don't like the national retail sales tax. I think they honestly just don't get the concept, because the national sales tax would eliminate taxes on the poor by sending every low-income wage earner a bonus check each year that covered the sales taxes for basic cost-of-living items like food, clothing and rent. The real tax payers, under this system, would be the big-time spenders: rich people who want to drive $85,000 Hummers or float around on million-dollar yachts.

Under the National Retail Sales Tax (also called the Fair Tax in a slightly different rendition) allows each individual to control how much tax they want to pay by controlling their spending. If you don't like to pay taxes, then you can choose to buy less stuff. If you choose to consume at a high level, however, you're going to pay your fair share of the federal budget.

As readers of this site know, I think the Bush Administration is a political and humanitarian disaster. But if it manages to pass meaningful tax reform, that would at least be one positive thing the administration will have accomplished. It's foolish to automatically disagree with everything the Republicans propose. Smart Americans evaluate each proposal, regardless of which party sponsored it. Sadly, though, I think many well-meaning Democrats are against this tax reform simply because the Republicans are behind it. And that's a bad reason to oppose a good idea.

It's time to stop taxing poor people and start making the wealthy consumers in society pay for their lavish lifestyles. The Fair Tax or National Retail Sales Tax is the way to make that happen. The political party that thought of it first doesn't really matter.


TOPICS: Business/Economy
KEYWORDS: fairtax; tax8reform; taxes; taxreform
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To: Pearls Before Swine
If you send every low-income wage earner a bonus check,..

That's not how it goes. The "bonus check" as they call it is a demogrant, or "prebate" of taxes to be paid on necessities.

Each and every valid SS card holder may choose to receive it.

The prebate is not in any way tied to income level. It is tied only to the family size of the valid SS card holders. I can get the prebate, you can get it (if you have a valid SSN), and Bill Gates can choose to get it.

Look here for an explanation.

41 posted on 11/12/2004 12:37:46 PM PST by Principled
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To: michaelbfree
and all the rebates will be handled through each individual state agency...

I think SSA handles sending the prebate.

42 posted on 11/12/2004 12:39:56 PM PST by Principled
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To: skip_intro
I do know that anyone who created a Roth IRA would be screwed, since all the money that was supposed come out tax free would now be taxed.

No. Folks who put $ into Roths will spend the same on taxes if we have an nrst or an income tax.

Today's prices contain a tax costs component of about 25%. It just isn't printed on any receipts. The nrst is about the same amount - and replaces the invisible tax.

There will be no change in purchasing power for Roth owners... they'll get exactly what they've always expected - but they'll receive their full paycheck with no federal deductions, they'll pay no payroll tax, they'll pay no tax on SS benefits, all their investments will grow tax free, and they'll be no death tax nor will their be a gift tax anymore.

Take a look at a short FAQ page and you'll smile.

43 posted on 11/12/2004 12:46:26 PM PST by Principled
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To: Tumbleweed_Connection
It's time to stop taxing poor people and start making the wealthy consumers in society pay for their lavish lifestyles.

Who does he think is paying for them and the fed gov now?

44 posted on 11/12/2004 12:50:07 PM PST by Camachee
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To: RobRoy
This whole national sales tax thing is silly.

Doubling the size of our economy is silly?

I'd support it if it TOTALLY REPLACED the income tax,

It does totally replace the income tax. It also eliminates payroll tax, self employment tax, capital gains tax, estate tax, gift tax, and it eliminates taxes on the necessities of life.

Under an nrst, our economy booms.

Go and search "economic impact. You'll see lots of research on the topic.

45 posted on 11/12/2004 12:52:27 PM PST by Principled
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To: Principled

Thanks, that looks like a great site.

As I said in my previous posts, I would LOVE a national sales tax. I just don't think it is gonna happen. Too many sacred cows would have to be slaughtered to make it happen.

Way too many.


46 posted on 11/12/2004 1:05:12 PM PST by RobRoy (Science is about "how." Christianity is about "why.")
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To: Principled
The prebate is not in any way tied to income level.

I get it, and understand how it operates: everyone receives it. I was focusing on its effect on the low-wealth group as effectively substituting for current low-bracket and EITC policies. The prebate makes the biggest difference for the smallest spenders, effectively making them tax free.

47 posted on 11/12/2004 1:39:24 PM PST by Pearls Before Swine
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To: kevkrom
The same could be said for the standard deduction and personal exemptions in the current tax code, which the FCA is analagous to.

Silly me. I thought the whole idea of a nst was to NOT be analagous analogous to the current tax code.

48 posted on 11/12/2004 1:41:55 PM PST by lewislynn (The meaning of life can be described in one word...Grandchildren)
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To: Pearls Before Swine
The prebate makes the biggest difference for the smallest spenders, effectively making them tax free.

Bingo. And an added benefit -- illegals (who don't have valid SSNs) will wind up paying a much higher effective tax rate than people who are supposed to be here.

49 posted on 11/12/2004 1:43:40 PM PST by kevkrom (Power corrupts. Absolute power corrupts absolutely. But it rocks absolutely, too.)
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To: Pearls Before Swine
The prebate makes the biggest difference for the smallest spenders, effectively making them tax free.

Yeah. Some will have a negative tax rate - just like now.

50 posted on 11/12/2004 2:39:31 PM PST by Principled
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To: skip_intro

The aggregate American Tax burden would not change from what it is now. However, you metion state income taxes. As you may know, all state income taxes piggyback off the federal form. Without a federal form to piggyback off of, states would have to either spend billions to erect their own tax collection structure or piggyback on the Federal Sales Tax. State and local spending combined (minus federal grants, which goes on the federal books) is about 9% of GDP, or about 1/2 of Federal spending. So if the Federal rate is 23%, the State/local rate would be 11 - 12%. Combined, that's a tax-inclusive TOTAL RST of about 33.33% (1/3), or dead-on 50% tax-exclusive. So if we wanted to pay for American Government spending AT ALL LEVELS, you would have to pay $150 for a $100 item at the store. But that would remove every single type of tax in the United States.

But this 33%/50% number is an amazing indicator of how much Americans truly pay in taxes. Good guess on your part.


51 posted on 11/12/2004 7:33:16 PM PST by Remember_Salamis (Freedom is Not Free)
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To: RobRoy
The consumer base is twice the size of the income earning base. this is how we can lower what individuals pay in tax and still collect enough taxes. Production cost will also come down and therefore prices. Companies won't need armies of accountants and lawyers to keep track of paying taxes and deal with the IRS. They no longer have to withold nor declare their incomes (you either) hence the economy takes off.

People will be keeping 100% of their paychecks plus getting a rebate for food and medical expenses therefore have more to spend.

Your fears are unfounded business unfettered thrives, market forces have a proven track record!
52 posted on 11/13/2004 10:37:04 PM PST by hawkiye
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To: hawkiye
The consumer base is twice the size of the income earning base.
No it's not.
53 posted on 11/14/2004 9:46:53 AM PST by Your Nightmare
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To: Your Nightmare

Strong, data based response.


54 posted on 11/14/2004 9:49:32 AM PST by Principled
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To: Principled
Strong, data based response.
I have the data, but why don't you use common sense? What are people buying things with...their income. So how can they buy twice as much at they make? Why should I even have to get the data for such a stupid claim?


For the Kool-Aid Drinkers, the data:

In 2003 personal income was $9.2 trillion, personal consumption expenditures was $7.8 trillion.

If you want to be picky and add government expenditures, the total would be $11 trillion, which, according to my math, is not nearly twice as much as $9.2 trillion.

Stop being a lemming and use your head.

55 posted on 11/14/2004 2:26:28 PM PST by Your Nightmare
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To: Your Nightmare

Source?


56 posted on 11/14/2004 2:42:23 PM PST by Principled
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To: Principled; lewislynn
Strong, data based response.
It's interesting that you ask for data from me but not the original poster. Just another example of how the supporters of this plan are will to believe (or purport to believe) anything as long as it advancing their proposal.
57 posted on 11/14/2004 2:43:34 PM PST by Your Nightmare
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To: Your Nightmare
It's interesting that you ask for data from me but not the original poster.

Tin foil time. You're waaaay to paranoid.

58 posted on 11/14/2004 2:45:19 PM PST by Principled
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To: Principled
Source?
http://www.bea.doc.gov/bea/dn/nipaweb/SelectTable.asp?Selected=N

Not going to ask the original poster for a source?
59 posted on 11/14/2004 3:15:50 PM PST by Your Nightmare
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To: Principled
Tin foil time. You're waaaay to paranoid.
Paranoid? Disgusted is more like it.
60 posted on 11/14/2004 3:16:35 PM PST by Your Nightmare
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