VANITYY: Will a Flat Federal Sales Tax Stop the Flood of Illegals?

10/26/05 | Jo Nuvark

[Jo Nuvark]

Could we stop some of the abuse from illegal aliens by converting from an income tax that illegals avoid, to a federal sales tax that illegals cannot avoid?

Many illegals from Mexico pay no taxes and send much of their income home. A federal sales tax could discourage the abuses and possibly stem the human flood.

[lOKKI]

I find this a pretty large leap of logic. Illegal immigration fixed by a federal sales tax?

PLEASE forget this joke before I hurt myself laughing!

"Pedro, you stay home...or the federale sales tax will get you!"

Frankly, I don't like VAT (value-added-taxes) like this very much regardless of any impact it might have on immigration.

It gives politicians a chance to target taxes on products they don't like in a very hidden way.

You see, the politicians like to nibble at every step a product makes along the way, from raw materials to taxes on the materials used to make the packaging.

Who's going to object to a .005¢ on a sheet of cardboard...? But there's another .005¢ on the ink, and another .005¢ on the cellophane, and another .005¢ on the tape, and another .005¢ on the styrofoam..... (If you haven't gotten the idea by this point, you never will.)

Suddenly you're paying a 25% tax on a product, and there's no way to fight it. Where do you start? The tax on the paint? The tax on cardboard? There are soon so many (tax)strings attached to the product there's no way to unravel them.

You lose.

[staytrue]

A fed sales tax would certainly catch up all who operate in the underground economy, but I don't see how this will effect illegals.

Many illegals work in the underground economy.

[Jo Nuvark]

[...A flatter tax system will boost real workers wages and simultaneously reduce costs for businesses...]

You make it sound simple. If so, why aren't we doing this? Wouldn't symbiosis be better than headbutting?

[SolidSupplySide]

Suddenly you're paying a 25% tax on a product

Is that a VAT or the so-called "Fair Tax"? :)

[staytrue]

How about a tax of fifty percent on all money orders and money transfers sent to mexico?

They will just wire it to russia, china, france, fill in the blank with country of choice, where a middle man will wire it to mexico.

[sasquatch]

Will a Flat Federal Sales Tax Stop the Flood of Illegals?
no

[Mamzelle]

What if illegals pay little to no income tax, because their wages are so low?

They don't pay much in the way of taxes, period. If we converted to a flat tax, they'd be paying for the first time.

I still think we oughta tax those electronic transfers of money from the US to Mex big. Very big. Then let them cry about the risk of getting their money stolen if they send cash. Boohoo! Lawbreakers!

[Jo Nuvark]

[...I doubt most of them make/spend enough money so that they would cease to be a burden for taxpayers...]

They spend a LOT... A LOT of cash at Walmart. It's amazing how much money they seem to have in their pockets.

[Mamzelle]

re: They will just wire it to russia, china, france, fill in the blank with country of choice, where a middle man will wire it to mexico.)))

Oh, so easy? Have you tried transferring money around in different countries? You lose big chunks. I think 15% would be about critical mass.

[No Longer Free State]

No

[SolidSupplySide]

How about a tax of fifty percent on all money orders and money transfers sent to mexico?

I never thought I'd see advocacy of taxes on US exports on Free Republic. First, we tax exports of US dollars. Then we can tax exports of US technology and we can tax exports of US agriculture. Any other goods we want to tax?

[staytrue]

"You've got to realize that a sales tax and income tax are extremely similar.

A sales tax is a percentage of GDP paid by the buyer. An income tax is a percentage of GDP paid by the seller. Have you heard of sales tax proponents talk about "embedded income taxes" in the price of goods? That is because it doesn't really matter whether the law says the buyer or seller should pay the tax, in the final analysis both a sales tax and an income tax are based on a percentage of economic activity."

BRAVO, BRAVO.

A sales tax does require fewer tax attorneys, accountants and record keeping. But a sales tax would put legals and illegals on equal footing. But the illegals are displacing a lot of legals not because they are cheaper, but because they have better work habits as they are often competing with the bottom rung of citizens.

[AuH2ORepublican]

The FairTax, the national sales tax introduced in Congress by John Linder that would replace all federal income, payroll and estate taxes, would send a rebate to all persons with Social Security numbers to compensate for the sales tax paid for necessary purchases at the poverty level. Since illegal aliens won't have a Social Security number, they would be paying the national sales tax but would not receive the rebate (same with tourists). That would indeed be a disinsentive for illegal aliens to come to the U.S. to work, but given the low salaries paid in Mexico emigration to the U.S. would still be in high demand, but at least they'd be paying more than their fair share of sales taxes.

[Jo Nuvark]

[Go after the SOB employers who hire them...]

Don't get me started on employers. It IS another subject, but... can finding a way to get their taxes help offset the financial damage they do?

[kingu]

A fed sales tax would certainly catch up all who operate in the underground economy, but I don't see how this will effect illegals.

If they're willing to break one law, why not break more? Once the purchase is made via a resale license, there's no way to track the products. Go by the fields, pick up crates and crates of produce, go into the city, sell at the same price as the market, just don't charge tax (or 'pretend' to charge tax by reducing the prices to match and just don't turn it in.)

I can just imagine all the laws that will come about to prevent fraud that will make it more likely for a business person to just give up and get a job with someone else while the illegals who are a lot of the problem expand their business base.

[sasquatch]

ditto

[Americanwolfsbrother]

Could we stop some of the abuse from illegal aliens by converting from an income tax that illegals avoid, to a federal sales tax that illegals cannot avoid?

A national sales tax would have no effect on illegal immigration. It may cut into the amount they send home but will not stop them from coming here. As long as they can make as much or more in one month in the U.S.A. compared to 3-4 months in Mexico or wherever they came from they will still come here. The only ways to stop illegals who are coming here for work is to go after those that employ them. Illegals here for reasons other than work are a whole different story that can't be addressed without closing the borders.AWB

[Jo Nuvark]

[...Illegals don’t come to the US to avoid taxes. They come to get jobs here because there are none at home in Mexico...]


See my post #7.

[kingu]

You wanna stop the flood of illegals? Go after the SOB employers who hire them. Enforce the law. It is ILLEGAL to hire an illegal alien.

And an illegal who hires an illegal is going to report to whom? There are whole chains of 'business' links that are run by illegals to mostly serve other illegals or others who transact in cash. To go after the employers would require enforcing the borders and the laws that govern the illegal crossing of them.

[Conservative Goddess]

Ping!