MN Rep. Pushing National Sales Tax

WCCO ^ | Novermber 15th, 2004

[Remember_Salamis]

MN Rep. Pushing National Sales Tax

Nov 15, 2004 10:27 am US/Central Minneapolis (AP)

Rep. Gil Gutknecht is pushing legislation that would replace the federal income tax with a national sales tax.

"Think of a world where there is no income tax, where you get to keep everything you earn and you pay the tax man when you buy stuff," Gutknecht, R-Minn., told the Star Tribune of Minneapolis.

Legislation co-sponsored by Gutknecht would scrap federal income taxes and replace them with a 23 percent federal sales tax (in addition to existing state taxes.)

Gutknecht, a member of the House Budget Committee, said he's "moved from a lukewarm fan to a fanatic" supporter of a national sales tax.

"First of all, it eliminates the IRS as we know it," he said. "That is a huge advantage. It simplifies things just enormously."

Gutknecht is one of more than 50 co-sponsors of the Fair Tax Act of 2003, which is sponsored by Rep. John Linder, R-Ga.

Under the plan, all goods and services would be taxed at 23 percent. There would be no exemptions, including for food and medical expenses, but some low-income people would be eligible for monthly tax rebate checks. An identical bill has been introduced in the Senate by Saxby Chambliss, R-Ga.

President Bush, who argues that the tax code is too complicated, says he will appoint a commission to study how it should be changed.

It's uncertain what will emerge, but tax experts say there are many options for simplification, including the creation of a flat income tax or a value-added tax on production or simply tweaking the existing code.

With Republicans increasing their majorities in the House and Senate, some changes are all but certain, said Bill Raabe, tax professor at Ohio State University's Fisher College of Business.

"If it's ever going to happen, now's the time," he said.

Some Democrats argue that a national sales tax would be regressive.

Sen. Mark Dayton, D-Minn., said such a tax would benefit wealthy Americans.

"Taxing consumption in an economy that is driven by personal consumption is a bad policy idea," said Dayton.

"It's clearly a regressive tax," said Rep. Martin Sabo, D-Minn. "You can put some credits in and probably alleviate some of the problems at the very bottom, but it ends up being a significant shift in taxes, if not to the very bottom (then) to the middle."

Minnesota Sen. Norm Coleman, a Republican, said he likes the simplicity of a flat tax. But he said he wanted to see what the presidential commission comes up with before endorsing a national sales tax.

[N3WBI3]

And if you make as a household 100K a year you are paying 28K in taxes, over 3.5 years that adds up to 98 thousand dollars..

[BlackbirdSST]

That's good, because I'm not too concerned about your tax scheme.

It's not MY Tax scheme, but I can mark you down for the current system. Sounds like you have vested interest, or at least have never dealt with the irs up close and personal.

When people start talking about "the health and welfare of this Nation", is a good time to start watching your wallet. I've heard Hillary talk, and I know that patriotism is the last refuge of scoundrels.

So you have no concern for the Health and Welfare of the Country? You do seem to tack left in your responses, no surprise you would bring Hillary into the conversation.

Seeing that you are so languid about it, perhaps you'd like to favor us all by limning, in a few languid strokes, just what it was he said that supposedly put me away?

Go back and read for yourself, you may not agree, but you've had your hat handed to you by other's as well, and you've even taken the "bite me" response, typical!

The fact that it's specifically designed to zero out the corporate income tax. If you don't pay those, it might not. If you do, it would. Some portion of your contribution would come to me in the form of a higher marginal rate.

It's a consumption Tax, not an Income Tax. I'm glad you can see the difference. We've made a little progress.

I don't see how you would accomplish your goal of preventing high net worth individuals from avoiding taxation short of taking out the Lobby and shooting them.The Roman Empire never solved this problem. Senators in the fourth and fifth centuries C.E. enjoyed net incomes, expressed in equivalent gold-backed values, three times what their late republican and early-imperial predecessors had, and they managed to shelter it from an increasingly desperately needy state. Perhaps we could succeed where the Roman Empire, even with its very existence on the line, failed and succumbed. It would be worth a try. We would wind up, however, persecuting wealth in order to get those people to pay up, I think.

Just when I thought you were able to grasp the concept, you flip to the other side. Again, it's a Consumption Tax, not an Income Tax. Uncle Bill spends, Uncle Bill Pays. No different if Blackbird spends.

I don't have a number, but I assume it would be very large. The problem is, it would stay off the books whatever system you chose. These people won't just step forward to pay up. The 23% rate, or 29% as someone has pointed out upthread, when current prices are used as the base, might very well be enough to sharpen smuggling and other off-the-books trade. It would certainly put enough money on the table, in the case of major purchases, to encourage people to try to go off the grid.

Same argument, different paragraph. It's a Consumption Tax not an Income Tax. ALL underground money goes un-Taxed with the current system. There will be no way to go "off grid", at the point of spending the money.

Likewise, I don't think changing the tax system to eliminate income taxes will do much to eliminate the auction of legislation that we call "political contributions", or to abate the influence of the Lobby. You would have to simply legislate against them, in the teeth of the First Amendment again, and physically separate lobbyists from legislators by requiring e.g. legislators to stay in the District of Columbia, and lobbyists to stay out of it. Then you'd have to restrict mail, e-mail, and every other known form of communication, to get the lobbyists and PAC's out of legislators' faces. It sounds awfully heavy and constitutionally dubious in the extreme, to attempt so draconian a reform of political communication. That leaves heavy laws against bribery, and the death penalty for trying to curry favor. Would that stand up? It's very iffy.

I'm not sure how you got here. This is about the FairTax vs. the Income Tax, not lobbying or Political contributions.

So you still have a problem with the Lobby, even if you succeed in moving this tax change. Of course, you know I think that this national sales tax proposal IS the Lobby working.

As a private Citizen I do have the right for redress with my Government, lobbying by any other name. This change may or may not happen, it's anybody's guess. If you truely don't like the proposal, seek to lobby your Government to keep the current system and all it's totalitarian power's, it's your right! Blackbird.