I don't see how a simple (I'm going to call it "simple" to separate it from the contorted one you posted details to earlier) flat tax wouldn't fit into this container. For example, I made from all sources of income say 50K last year. I then have to pay 5K on November 1st (Nov 1st so that we're fresh out of paying before voting), That's it. No deductions, exemptions, write offs or entitlements. Sounds "sound" to me.
II. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person . . . .
See above. Seems to pretty clear cut and simple to me.
III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it . . . .
Is there ever a convenient time to pay taxes? There is no way to make paying taxes convenient or enjoyable. I'm not too sure why this statement is used as pre-qualification.
IV. Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state . . . ."
Makes sense. But this factor currently resided within our EO's power to implement. Somthing like super-super majority should be required to raise taxes. Say 90% of the congress must agree to raise taxes.
An Income tax(i.e. Flat Tax), no matter how carefully constucted, falls short on all counts.
Obviously I disagree. But definately look forward to more information from you as you seem very knowlegable.
Furtheremore , in Wealth of Nations pp. 561-64, he had this to say about bad taxes:
1. A tax was bad that required a large bureaucracy for administration.
Wouldn't a large bureau be required to make sure that manufaturers, service providers and retailers collect taxes from sales? IMO it would have to be larger than that needed for a flat tax scenario.
2. A tax was bad that "may obstruct the industry of the people, and discouraged them form applying to certain branches which might give maintenance and employment to great multitudes. While it obliges the people to pay, it may thus diminish, or perhaps destroy, some of the funds which might enable them more easily to do so."
All taxes, in all formes discourage industry. Sales taxes hamper sales. Property taxes hamper property ownership. Income taxes hamper all of the above. All taxes restrict disposable income.
3. A tax was bad that encouraged evasion. "The law, contrary all the ordinary principals of justice, first creates the temptation, and then punishes those who yield to it. "Evasion is also bad, says Smith, because it tends to "put an end to the benefits which the community might have received from the employment of their capitals."
All taxes encourage evasion. If we, here in Oregon, had a sales tax I would shoot more deer and start a garden in my back yard to avoid taxes. I would think that a simple flat tax would be harder to evade because of the two party conspiratory actions required to accomplish it (employer and employee).
4. A tax is bad that put the people through "odious examinations of the tax-gatherers, and exposes them to much unnecessary trouble, vexation, and oppression...It is in one or other of these four different ways that taxes are frequently so much more burdensome to the people than they are beneficial to the sovereign"
This is a plus for the NRST. Private folks will never have to be interrogated by the tax man. The interrogation burrden will fall squarely upon the shoulders of the producers. I'm not sure that's a better scenario but at least my "ox" would be safe.
I'm not convinced that the NRST is far superior (or superior at all for that matter) to a "simple" flat tax system. The SFT (simple flat tax) would be fair and equitable but would of course not sound the bell for the IRS.
EBUCK
For example, I made from all sources of income say 50K last year. I then have to pay 5K on November 1st (Nov 1st so that we're fresh out of paying before voting), That's it. No deductions, exemptions, write offs or entitlements. Sounds "sound" to me.
How much of your receipts were earnings as opposed to the cost out of your wealth you put into aquiring your earnings.
The complexity and difficulty lay in separating the two into "earnings" to be taxed as income, instead of "Gross receipts" which is a tax on (income + your wealth expended that has been taxed previously). The devil is in the details of what government allows you to deduct as cost.
Why should you be required to report and prove to the government what your earnings and expended wealth are to compute and pay that tax, instead of simply paying a fixed percentage of total payment collected by a business in an anonomous sale not requiring any of the above.
Is there ever a convenient time to pay taxes?
Yep, at the grocery store when you are spending money you have already earned, at the time you elect to spend it.
Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible
Makes sense. But this factor currently resided within our EO's power to implement.
Actually the choice of an income tax imposes complexity in separating earnings from expended wealth aquiring those earnings. That imposes direct costs on business & individuals that places an unecessary burden on the economy and what we as individual have to apply to other ends.
A retail sales tax removes over 95% of all those costs:
Where Have All the Dollars Gone?
How the government robs Peter to pay him back.
By James L. Payne, Reason Magazine February '94When the overhead costs are added together, (24 percent compliance costs, 33 percent disincentive costs, and 8 percent other costs), they total 65 percent of tax revenue.
Wouldn't a large bureau be required to make sure that manufaturers, service providers and retailers collect taxes from sales?
Substantially less than under an income tax that has to be administered and enforced on every individual in the United States.
Only retailers would be subject to collect and remit those taxes, and then only to the existing tax authorities in the States. 45 of which already administer sales taxes much more complex than the NRST decribed in HR2525. When one relises that only 10% of the largest businesses move 90% of all retail sales receipts.
It becomes very clear where the diffence lays and how much smaller a bureaucracy it takes. The federal bureaucracy essentially goes from the 120,000 employees of the IRS plus additional DOJ agents, plus US Court resources ... to an office in the US Treasury receiving revenues forwarded from the States,(who by the way are paid to adminster and remit those taxes to the Treasury) No unfunded mandate.
All taxes, in all formes discourage industry.
Not to the same degree, when payroll and income taxes disappear, the overhead costs associated with those taxes dissappear also. Those resources are then released to more productive purpose or in price reduction to retain market share in a competitive market looking to maintain its profitability.
Under an NRST entry level barriers that the payroll taxes impose are no longer there fostering the growth of new business and small enterprises of individuals.
Sales taxes hamper sales.
How do they anymore than (Income taxes + the overhead costs of Income) taxes do. Income taxes decrease the amount a person has to spend and increases the amount he has to pay for all products when he spends what's left after individual income and payroll taxes are extracted.
Remember, only retail businesses deal with the sales tax. which is easily computed from the regular accounts maintained for business purposes (it does not impose requirements beyond adding up gross sales). Others not engaged in "retail" sales are not burdened by retail sales nor the income or payroll taxes of today. Even resale of used/antique products is available as a business that does not entail the sales tax since those products have previously been tax, or grandfathered in the legislation.
The costs embedded in price of goods is much lower than in the income payroll tax system.
I refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.
"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."
Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.
As a consequence the 22% price drops from overhead cost reductions tend to offset the 23% leaving about the same total expended with tax included as you are paying now with after tax income.
The net effect, more money to spend or save, and no impact otherthan positively on the sales.
All taxes encourage evasion.
It comes down to is the liability worth it.
90% of retail dollars flow through 10% of retail businesses.
No substantive business is going to risk there reputations and right to do business for the sake of not collecting a tax paid by its customer.
I would think that a simple flat tax would be harder to evade because of the two party conspiratory actions required to accomplish it (employer and employee).
Since when does it take two parties to conspire as regards an income tax. Just takes one deciding to not report receipts from cash when dealing with individuals only there is no reporting by your "employers"(i.e. customers) of how much they paid your or even that business occurred. Better talk to our infamous tax protesters on the FR threads for the bottomline on that.
Our do you intend to double the size cost of the Income Tax bureaucracy to track down cash payers as well as income receivers.
In the case of retail taxes there are two clear parties, one knowing he paid a tax, or at least got out of it but not at any liability for not remitting such to the government. The other, the business gets all the risk of not remitting taxes sufficient to cover his gross receipts. That business had better keep its customer very happy, else guess who turns states evidence. Then of course there the unhappy ex-spouse, the guy at the bar the business person boasts to, the envious neighbor, the tax authority sting, the ....
The interrogation burrden will fall squarely upon the shoulders of the producers.
Not quite true, as only those persons who chose to engage in retail business are subject tocollecting and remitting the tax, and they are paid to do that job by the feds. All others don't have anything to do with it.