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GOP Discusses National Sales Tax
FOX ^ | Dec 1, 2004

Posted on 12/01/2004 8:25:22 AM PST by Tumbleweed_Connection

...President Bush and House Speaker Dennis Hastert (search) have both said the idea of a national sales tax deserves a serious look. For many, the idea of a world without the Internal Revenue Service is very seductive.

"We spend about $400 billion a year complying with the tax code. We spend $200 billion a year just filling out IRS paperwork," said Rep. John Linder (search) , R-Ga., who has proposed a bill that would create a national sales tax.

Proponents have spent millions on research and have concluded that a national sales tax can replace the income tax, payroll tax, estate tax and corporate tax. Advocates say the new tax would lower the cost of manufacturing and job creation and attract foreign investments, among other things.

"If we were to get rid of the sales or the income tax and the payroll tax and all compliance costs, we would be so ferociously competitive in a world economy that corporate America would not be competed with unless foreign corporations started building their plants in America," Linder said.

Proponents seek a 23-cent national sales tax on all retail goods, everything from groceries to clothes, cars to electronics. Everyone would pay the same rate, which critics argue is part of the problem.

"If you consume $40,000 a year and you make $50,000 a year, would you feel it is fair if a guy who made a half a million dollars a year but spent $40,000 a year paid the same tax you do? I think you wouldn't feel it's fair," said Buck Chapoton, former assistant treasury secretary.

(Excerpt) Read more at foxnews.com ...


TOPICS: Business/Economy
KEYWORDS: fairtax; irs; taax; tax; taxes; taxreform
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To: Jay777
1. Isn't 23% pretty high to be flat on all products?

A: Yes I believe its high, and recent studies has displayed that it may be less than 19%. This is according to John Linder the congressman behind the idea. Nevertheless, 23% is the number that should keep the tax revenues at the same current level. Who knows how much of that percent is pork?

2. How will I not be taxed again on the money I have saved?

A: You are only taxed when you consume. Therefore, money that you saved will not be taxed. Like it currently is today.


3. Will the poor get a rebate or credit?

A: Yes they will. It will come in the form of a monthly check in the mail by the government. For instance, a family of four that makes $20,000 a year that is considered poor. The government would then return 23% of the $20,000 to that family in monthly installments. 23% of $20,000 is $4,600 annually. Therefore, the $4600 would be divided by 12 months to the sum of $383.33 a month. That should cover the tax.

4. Will there be a guarantee that prices on products won't increase?

A: No the free Market will dictate prices by Supply and Demand. Furthermore, since there will not be a tax on corporations expect more business to relocate their headquarters here. Money from Swiss Bank accounts, Camden Islands, etc... would be transfered here. The stock market would have a huge increase in capital too. Companies will be more competitive on prices and employees. Wages should go up, and instead of people looking for jobs, jobs would look for people.

5. Will the 16th amendment be abolished to ensure we won't be taxed with both in the future?

A: This is a replacement of the current tax code. You do not have to worry about it being on top of the current tax code.
161 posted on 12/01/2004 11:01:25 AM PST by Sprite518
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To: Steve_Seattle
You will not be paying Social Security or Income taxes anymore. So you would have a lot more money in your back pocket then you do today.
162 posted on 12/01/2004 11:03:39 AM PST by Sprite518
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To: Your Nightmare
LOL! What a ridiculous answer! You invest your money Chief. You do not let it sit in a bank account, and do nothing. Moreover, as an investor you do not have to worry about being punished for investing your money (Capital Gains).

BTW, yes you will spend money, but you control it. The less you consume, the less you pay taxes. So who consumes the most in this country. Certainly not the poor.
163 posted on 12/01/2004 11:07:07 AM PST by Sprite518
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To: HostileTerritory
When people have more money they spend more. People would have a lot more money, and prices would come down for companies to compete since they would not have a corporate tax. Therefore, the consumer will have more buying power.
164 posted on 12/01/2004 11:11:49 AM PST by Sprite518
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To: Mr. K

I am sorry but you are wrong Sir. I am not going to waste further time on this.


165 posted on 12/01/2004 11:12:40 AM PST by Sprite518
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To: Sprite518
LOL! What a ridiculous answer! You invest your money Chief. You do not let it sit in a bank account, and do nothing. Moreover, as an investor you do not have to worry about being punished for investing your money (Capital Gains).
Invest it all you want, if you don't spend it, it has no value. The only value in money is that you can buy things with it.
166 posted on 12/01/2004 11:14:10 AM PST by Your Nightmare
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To: Tumbleweed_Connection
Sorry to be such a pessimist, but I don't think ANY of these people have the balls to eliminate the income tax or IRS. It will take civil disobedience and a revolt to get rid of it.

It's their way of having control over us !!


167 posted on 12/01/2004 11:18:31 AM PST by unixfox (Close the borders, problems solved!)
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To: DTaggart
When people keep more of their money, then they spend more. Which increases the tax revenue. Look at the Kennedy of Regan tax cuts. Look at the tax revenues before the tax cut and after. Both cases tax revenue went up. The Leftist always tries to convince the public that if you cut taxes, then that cuts tax revenue. Nothing could be more false. The leftist use the Regan tax cuts as an example of what happens. However, they fail to point out all the new spending that was done by the government. For every new dollar that came into government, a dollar sixty-one was spent. Tax revenues went up and so did spending by over a 1000%. Deficits are created by spending, and not by lack of tax revenue.
168 posted on 12/01/2004 11:20:22 AM PST by Sprite518
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To: Steve_Seattle

There is a Black Market now. That is a moot point. There will always be one.


169 posted on 12/01/2004 11:21:58 AM PST by Sprite518
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To: Sprite518
People would have a lot more money, and prices would come down for companies to compete since they would not have a corporate tax.
What makes you think corporatation pass their taxes on to consumers through higher prices? Most economists don't believe this. They believe that the corporate tax is paid by labor through lower wages and investors through a lower return. What insight do you have that they don't?
170 posted on 12/01/2004 11:22:38 AM PST by Your Nightmare
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To: Sprite518; Steve_Seattle
There is a Black Market now. That is a moot point. There will always be one.
No chance it might grow?
171 posted on 12/01/2004 11:24:13 AM PST by Your Nightmare
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To: bobjam

It is a replacement to the status quo. Its not a tax on top of taxes. You really think Bush is just going to raise the taxes for everyone by 23% on top of all the other taxes we already pay. It would be political suicide not only for him but the party. You can rest assure that will not happen. Goodness people lets use our brains here!


172 posted on 12/01/2004 11:26:52 AM PST by Sprite518
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To: concretebob; PhilDragoo; Liz; onyx; Happy2BMe; potlatch; devolve; MEG33; Grampa Dave; Lady Jag; ...
Critics contend that the sales tax would have to be higher than advocates advertise.

"It would require at least a 30 percent rate, that's a very high rate and may create tax evasion on its own," said Chris Edwards, a tax analyst with the Cato Institute. "The highest state sales tax we've got right now is only 11 percent. So there's a great unknown here, would the government be able to actually collect a 30-percent sales tax?"

Sales tax backers say their tax is relatively easy to collect — forty-five states already do it — and the tax would collect revenue from the vast, underground economy.

"About a trillion dollars now is in the underground economy, untaxed. That's just three items — pornography, illicit drugs and illegal labor. We wouldn't make them more legal if we had a sales tax, but what we would do is tax them when they spent it for personal consumption," Linder said.

Critics say two categories of Americans won't like the sales tax: millions who don't pay federal income taxes and workers about to retire who could see their nest eggs devoured by a large and unexpected sales tax.


Pinging to a few others .....


173 posted on 12/01/2004 11:27:52 AM PST by MeekOneGOP (There is only one GOOD 'RAT: one that has been voted OUT of POWER !! Straight ticket GOP! ©)
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To: afnamvet

It has been introduced. Don't know the number. But a new Congress is sworn in next January. So the bill would have to be reintroduced, and it would get a new number.


174 posted on 12/01/2004 11:29:54 AM PST by Wolfstar (Counting down the days to when the new White House puppy arrives.)
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To: bobjam
BTW, your comment of

"Besides, I would rather the government's income be based on production, not consumption. I want our nation to be a nation of producers, not consumers."

Displays your economic ignorance. If you tax something then you punish. So you rather punish the producers. Yeah that will inspire people to produce. LOL!
175 posted on 12/01/2004 11:30:30 AM PST by Sprite518
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To: ApesForEvolution
Bump for eliminating the IRS/IRC, the Constitutionally-repugnant, tyrannical, Federal Mafia enslavement system...

I second your bump. The primary reason I have been a life-long Republican is the issue of taxes. Republicans at least make an attempt to hold the line on taxes. And now, at long last, we might finally see a genuine overhaul of our horrible federal tax system.

176 posted on 12/01/2004 11:31:48 AM PST by Wolfstar (Counting down the days to when the new White House puppy arrives.)
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To: Sprite518

Thank you for your answers. The only answer I'm not understanding is for #2. Perhaps I should be more specific in my question. Under the current system my income is taxed. I take part of this taxed income and save it. Now lets say we go to the NRST system. After this I decide to spend some of the saved money. Would I not be paying taxes on this money again?


177 posted on 12/01/2004 11:32:39 AM PST by Jay777
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To: Sprite518

I don't think they are taking 23% of my income under the current system. I don't think I would be willing to pay more than a few percentage points more than I am now just for the ease and simplicity it would bring. 23% just sounds high. Maybe I'm wrong.


178 posted on 12/01/2004 11:35:30 AM PST by Jay777
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To: DTaggart
Sounds like the average person would have to consume 23 percent less. How will that help our economy?

No federal tax witholding from your paycheck. You've got more money in your pocket and your gardener is paying federal taxes that he wasn't paying before. All of those people who work for cash will have to ante up when they go to Walmart. Probably a better deal for all of us in the long run.

179 posted on 12/01/2004 11:36:27 AM PST by InterceptPoint
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To: Jay777
Would I not be paying taxes on this money again?
Yes, you would.
180 posted on 12/01/2004 11:37:56 AM PST by Your Nightmare
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