Posted on 10/26/2005 3:54:15 PM PDT by 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.
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.
Any legal transaction (e.g. the purchase of a fancy Cadillac) will be captured by either an income tax and a sales tax.
What you say is trivially true, but it omits the discussion about the portion of tax collected.
IN an income tax, the portion collected represent the taxes that everyone pays on purchases - and this represents only a portion of tax burden. If a drug dealer pays no income or payroll tax on his illegal income, he does still pay embedded taxes in prices as you noted. But he pays nothing more. Today, embedded taxes represent one of three components of ones tax burden... there are embedded taxes, income taxes, and payroll (self-emp) taxes. A drug dealer only pays a portion of his tax burden (the embedded portion). He does not pay income or payroll tax on his illegal money.
Contrast this to a sales tax situation; ie ones entire tax burden is comprised of a single component - taxes on purchases. Hence under a sales tax (like hr 25), the drug dealer begins paying his FULL share of taxes.
Under the income tax, the drug dealer pays only a portion of his taxes (embedded tax in prices). He does not pay the remainder of his taxes in income and payroll tax.
Under the nrst, the drug dealer pays his full share of taxes.
It should be obvious that the drug dealer pays more tax under an nrst - meaning the rest of us don't have to carry him any longer.
I'm not saying more money is collected from underground with an nrst, I'm saying that it comes from who it should come from - which is obviously better.
This being said, I don't know if an nrst would reduce illegal immigration - but it WOULD begin collecting the maximum rate from them.
[...The difference to be recognized is the difference in how an income tax treats an illegal versus the way a sales tax would...]
You lost me.
i disagree. I think the point is that under an income tax, underground income earners pay only a portion of their tax burden - the portion embedded in prices (the do NOT pay income or payroll taxes).
But under an nrst, illegal income earnes pay 100% of their tax burden.
[...I don't know if an nrst would reduce illegal immigration - but it WOULD begin collecting the maximum rate from them...]
But... But... But... it would reduce our problem with the illegals and that being the drain on social services.
Take away our liberal social net, and watch them flock back home.
Specifically, an income tax allows an illegal immigrant to earn money and pay no income tax and pay no payroll tax. Hence an illegal immigrant only pays a portion of his tax burden (the portion we all pay in the prices of the goods we buy).
It is in this respect that a sales tax treats illegal immigrants differently. A sales tax does not allow an illegal immigrant to avoid any portion of his tax burden. This is because an illegal immigrant's FULL tax burden is paid via purchases (as would be everyone's).
So the sales tax collects all requisite taxes from an illegal immigrant, while the income tax collects only a portion of the requisite taxes. THat's a difference that is important.
A federal sales tax could discourage the abuses and possibly stem the human flood
[...Take away our liberal social net, and watch them flock back home...]
At last... someone who gets it!
Then some enterprising little mexican will setup shop in Canada to do two stage wire transfers for 5% and make a killing.
It would bring in more tax money from them to help offset their drain on social services. But I dunno if it would reduce their numbers. I think they'll come for work and $ and to escape the hell-hole that is Mexico.
Copy of Post #7: Well... I was thinking that the impetus for illegals from Mexico is work. And from experience I have found they do not want to pay taxes. They want to KEEP all of their money to send home or to buy stuff. I have noticed the local Walmart has lines of illegals in the checkout, spending cash for everything. That's good for Walmart, but not for the Internal Revenue.
If taxes were FORCED through the sales tax, they might not be so excited about coming here.
This sir, bears repeating:
[...Take away our liberal social net, and watch them flock back home...]
Then some enterprising little mexican will setup shop in Canada to do two stage wire transfers for 5% and make a killing.
______________________________
Sounds like a great business for an anglo too?
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.
One obvious way, a retail sales tax would give the federal government a monetary stake in contolling the boarders to stem the flow of contraband and smuggling. Today there is little real incentive for the feds to actually do anything at all.
Put revenues at risk and watch border control become a primary focus in tax enforcement.
Not at all. The huge cost of illegal immigration is the cost of the social safety net the US provides to the progeny of illegal immigrants over successive generations , chiefly education and health care. Children don't pay taxes.
Each child of an illegal immigrant costs the state of California, conservatively, between $200K to $300K from birth until age 18. These same children contribute little to the state tax revenues during that same period.
I think they'll come for work and $ and to escape the hell-hole that is Mexico.
Indeed. You takee services you payee the taxes.(ancient chinese proverb).
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.