the enforcement requirements in a nation that can't seem to stem the flow of illegal drugs scare me.
And the enforcement requirements of the current income/payroll tax system that can't seem to extract a penny of income or payroll tax from that illegal drug traffic doesn't?
At the least, under a ubiquitous retail sales tax, income from illegal trade or the underground economy expended on consumer products from legitimate retailers get fully taxed.
. California already exempts many goods from its sales tax and the machinations around what is "food," for example, and what isn't are amazing.
Realize the National Retail Sales Tax implemented under the FairTax legislation does not exempt products or services. Instead it provides a sales tax rebate mechanism paid to all legal residents equally to provide for payment of the sales tax on expenditures at the HHS poverty level defined for size of household. This avoids the necessity and problems of making such definitions and specific exceptions as you mention which obviously are the source of much manipulation and political wrangling in the state sales taxes.
What makes anybody here think that a sales tax will be any less subject to patronage, complex tweaks, byzantine accounting, and outright corruption when the difference is an automatic 25-35% advantage for your product (when state sales taxes are factored in) I don't know.
When you clean the slate it becomes more difficult to favor a specific group without raising the hackles of everyone else. Especially where everyone is treated precisely the same to begin with and there are no exceptions to the tax. Touching one point visibly affects everyone, making machinations much more dangerous for politicians to engage in.
Of course we have a perfect example in what doesn't work to control such machinations that you speak of in the current income/payroll tax system repealed under the implementation of the FairTax (H.R.25):
| "As a matter of fact, what the income tax does — and this is the debate that I think we always try to get into in order to let you and him fight, see — and the people of this country are led down a path where the actual control of their resources, which in the end is the control over their will, is handed off to the government." . . . "The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system." "In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation." |
This is oxymoronic. There's already a tax on marijuana, how well do they do at collecting that? There are already any number of taxes due from the underground economy that don't go collected. What makes you think that the same people won't buy off the black market?
Fully taxed? This country already has markets in illegal drugs, illegal labor, illegal cars and parts, illegal booze, illegal cigarettes... With an NRST and open borders for goods due to CAFTA, that market will explode.
The only reason those goods are sold illegally is that the amount of the tax makes it worth the risk of getting caught.
Realize the National Retail Sales Tax implemented under the FairTax legislation does not exempt products or services. Instead it provides a sales tax rebate mechanism paid to all legal residents equally to provide for payment of the sales tax on expenditures at the HHS poverty level defined for size of household. This avoids the necessity and problems of making such definitions and specific exceptions as you mention which obviously are the source of much manipulation and political wrangling in the state sales taxes.
Given the byzantine tax code we have, you are asserting that Congress won't insert line items into budget bills altering sales taxes for specific goods before the ink on the NRST is dry? What planet are you living on?
When you clean the slate it becomes more difficult to favor a specific group without raising the hackles of everyone else.
"More difficult" will likely last about 45 minutes. Until you've seen the machinations of the California State Board of Equalization over sales tax minutae (an Orwellian name if there ever was one), you can't tell me that Congress will leave this alone. No way.
Look, I have been an advocate of sales taxes for twenty-five years. I applaud the intent to have the public recognize the cost of government in every purchase. I wait for the day that every spending bill will be discussed in terms of its impact on a visible tax that every citizen confronts every day. But until we can get spending down to about 10% of sales, I promise you, the size of black market you'll see will be mind boggling, the number of exemptions for specific uses and products will be daunting, and the mechanics of enforcement will make the WOD look like a garden party. The burden of calculating tax collections on thousands of goods at a myriad of rates under various conditions will fall heavily upon all but the largest of retailers, who, I am certain, love this proposal.
When the advocates of NRST start to deal honestly with the public, I'll pay more attention to what they have to say.
You are here.