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.
>>>...there's talk of a revolutionary overhaul that could end taxes on the poor...<<<
Huh? How much do the poor pay in taxes now? Maybe he meant the middle-class....?
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The best thing about a national retail sales tax is that you can retire overseas tax free.
Who was the original poster?
They had better have exemptions (medicine and services) AND think this out very very very well. Remember the luxury tax just about KILLED the private boat business.
hawkiye
The best thing about a national retail sales tax is that you can retire overseas tax free.Except most other countries have a VAT.
Most of the countries I've looked at are mostly financed by income taxes. Which countries are financed mostly by VATs?
national sales tax = bigger federal government = bad idea.
Will getting "100% of their paychecks" be a new law?...I want free rent too.
They no longer have to withold nor declare their incomes (you either) hence the economy takes off.
Does that mean stockholders won't know what a company's earnings are?
I guess if no one has to declare their earnings, the Social Security checks will be like the one size fits all poverty rate rebate checks, everyone gets the same "benefit". Will the SS checks and the one size fits all poverty rate rebate checks arrive on the same day of the month?
The EU requires it's members to have a VAT of at least 15%. The UK has a 17.5% VAT. Of course they all use the correct way of expressing a VAT/RST, the tax exclusive rate.
I'm on that page also. Exempt basics from tax and get rid of the infrastructure needed to redistribute.
"....we also need to hear from the President's proposed commission on tax reform, etc before substantive moves can expected to occur."
AG, I heard from a very reliable source that there is no support on either side (D vs R) for setting up a commission. The track record for commissions in DC over the last 10 years has not been stellar, to say the least. The sentiment in congress seems to be that the idea of a commission was that congress had been sitting on this issue for years and that a commission would be a way of getting something going. It appears that congress is ready to say "OK, Mr. President, here's your 435 member commission; just give us our marching orders". One senator allegedly said that it would take two years for a commission to come up with findings and they want to move faster than that. That is very good news if congress is really serious about that.
"Such a radical shift can't possibly avoid being severely disruptive to those plans."
I would suggest that when the DJI doubles the first two years after the FairTax is implemented (as forecast by a couple of nationally known money managers), that will make it relatively easy to shift financial plans for those astute enough to adjust to the new economic environment.
Speaking of disruptive, what would happen of we allowed the current system to continue to grow like a cancer until it collapsed of its own weight? It is now more tha 60,000 pps. and at its current rate of growth will exceed 100,000 pps. by 2010 (assuming the entire system doesn't collapse before then). Signs are everywhere that the system is buckling under its own weight and complexity. Might not that be disruptive?
"Since I will still have to prepare state income tax forms, I'll still have a compliance cost."
Incorrect. Few, if any states will continue to tax income once the federal government abandons the system that state income taxes piggy-back on to.
"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."
Anyone with their Roth money invested in stocks will see the value of their investment increase dramatically. That will more than offset any differentials in their taxes on consumption. Also, to the extent that they buy US produced goods, they will pay about what they would have under the current system. Retirement savings will fare very well under the FairTax plan.
"People would be somewhat more motivated to save their money rather than spend it, especially with a combined sales tax (in states with sales tax) that could easily approach 50%."
The definitive economic study on the FairTax, which was done by Dr. Dale Jorgenson, does show a small initial net decline in consumption. That net decline is comprised of a significant decrease in the consumption of imports partially offset by an increase in the consumption of domestically produced goods. I seem to recall that the first year net decline is about 9%. The second year the net decline is less and by about the 4th year, consumption is back up to where it would have been under the current system. Meanwhile, the economy is exploding, with GDP growth of 10.5% the first year, slightly less each subsequent year and by the time the growth levels off, the economy is between 1/4 and 1/3 larger than it would have been under a continuation of the currecnt system. Meanwhile, the dramatically increased demand for US produced goods combined with the massive migration of capital back into this country that had been stranded by the old tax system produce a period of unprecedented economic growth. We are talking about rates of GDP growth that are substantially in excess of those experienced in the 90s.
Please explain what you mean by "pps".
"If I had my way, businesses would pay no tax."
Then you should love the FairTax. The only federal taxes that businesses will pay are excises - which only account for about 4 - 5% of federal revenues.
"Please explain what you mean by 'pps'."
Pps. = Pages
Oh (yawn), that...
The NRST isn't gonna stop THAT...
You have to kill all the lawyers in DC first...
That's not going to happen.
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