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 ...
Much of the cost of goods come from an income tax. Remove the income tax, remove that markup.
The idea that wages would fall is ridiculous.
Not if you do the FairTax.
First of all 23% is the beginning of the lie.
The 23% rate is actually 30% in sales tax terms.
A 100.00 item before the federal sales tax would cost $130.00 out the door price.
$30.00 (federal sales tax) is 23% of $130.00.
Please also Realize that nothing is stopping Congress from tinkering with the current income tax brackets !
Ok, so say that we all pay around 30% income right now. That would be decreased to 23%, and the government would not collect any corporate taxes. I don't think it adds up.Part of the funny math used to come up with the 23% involves having governments (federal, state, and local) pay the sales tax on their consumption. So when doing the calculations to generate enough revenue to cover federal expenditures, they figured the sales tax the fed would pay as revenue, but didn't increase the required revenue to pay for the sales tax on federal consumption.
"Part of the funny math used to come up with the 23% involves having governments (federal, state, and local) pay the sales tax on their consumption. So when doing the calculations to generate enough revenue to cover federal expenditures, they figured the sales tax the fed would pay as revenue, but didn't increase the required revenue to pay for the sales tax on federal consumption.
On the state and local side, a state or local government can't pay a tax, they just pass it on to their citizens. So they will have to increase their taxes to pay the federal NRST. So, in effect, you would be paying federal taxes through your state and local taxes."
Well that sucks.
Much of the cost of goods come from an income tax. Remove the income tax, remove that markup.You assume that businesses pass there income tax on in higher prices. Consumers are one group than can "pay" for the corporate income tax, but most economist believe capital holders pay it through lower returns on their investments and labor pays it through lower wages.
I guess he said 1/2 a mil, I did my math based on 1 mil, same principle though.
It's hard for me to believe that we had to go 42 posts deep before someone addressed the real results of a national sales tax. I can't believe so many freepers are getting their shorts in a twist without understanding the details behind a potential sales tax (consumption tax). I don't want anyone taking my money based on my income - I'll pay my fair share at a time that I CHOOSE - when I consume products and services. Thanks for adding some sanity to this string!
"What a stupid argument, people that make half a million a year do not limit their spending to $40,000 - jackass should be fired from his job for even suggesting something so outlandishly ignorant."
More importantly, if someone makes millions but only spends $40k, what benefit is he reaping from making millions? NONE. Earned money is basically irrelevant until it is SPENT in some way. A million dollar stockpile only is valuable because it represents SPENDING potential.
So, in short, if the millionaire never decides to reap any benefits from earning all that money, why should he be punished? Tax when you spend. It's a good idea.
Well that sucks.Basically, they have the government giving themselves a loan and counting it as revenue and not a liability. Add the liability of the feds paying the sale tax on everything they buy (eg. roads, jets, aircraft carriers) into the equation and the rate must go up from the proposed rate.
It's hard for me to believe that we had to go 42 posts deep before someone addressed the real results of a national sales tax. I can't believe so many freepers are getting their shorts in a twist without understanding the details behind a potential sales tax (consumption tax). I don't want anyone taking my money based on my income - I'll pay my fair share at a time that I CHOOSE - when I consume products and services. Thanks for adding some sanity to this string!FYI, both the flat tax and VAT are consumption taxes, too.
With people getting all of their wages each check and watching their spending millions of Americans can get themselves out of credit card debt. Once out of debt these people can then save or buy more goods. I think it would really jump start the economy.
That's the point: make the tax so in-your-face that people might actually do something about it (as opposed to the never-even-noticed income tax).
With people getting all of their wages each check and watching their spending millions of Americans can get themselves out of credit card debt. Once out of debt these people can then save or buy more goods. I think it would really jump start the economy.One thing that will be working against them is that they will be paying sales tax on a good portion (not all of it) of their interest. Interest is payment for a taxable service.
Could you please explain how a flat tax, based on my income, is a "consumption" tax???
"Every mall store in America would close its front doors and do all its sales beside the delivery trucks in the parking lots."
Not if we're forced to go cashless ...
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