Posted on 11/06/2002 1:39:57 PM PST by Tree of Liberty
Neil Cavuto just interviewed Mitchell E. Daniels, Jr., the director of the OMB, and Neil let it be known that he's hearing rumblings that Pres. Bush is considering a total re-write of the tax code and that SecTreas O'Neill is strongly pushing a national retail sales tax!
This in the sales business is called, bait and switch.
It says Bush is considering a total re-write of the tax code. What exactly does that mean? It could give the rich, or the poor, more or less tax breaks, plus it doesn't give any indication of a time line.
It goes on to say O'Neil is strongly pushing a NRST. How much would that be. 7%, 10%, 20%, like in some European countries.. People, I wouldn't lose too many nights sleep, thinkg about the tax you are going to save.
I would be wondering what would happen if everything I bought retail would be taxed again, for the 14th time.
I would be wondering what would happen if everything I bought retail would be taxed again, for the 14th time.
Actually it won't be, HR2525 grandfathers all current non-business property. And only retail new goods and services will be taxed in the future, "once but only once" is the strict rule set down in the legislation.
EG I have a wife and a kid, so i'd receive a check at the first of each month (just the SS recips do now) representing the taxes my family will pay on our necessities for the month. The "prebate" amount is figured by multiplying the tax rate (23%) by the HHS defined poverty level for a family of said size.
Under the nrst, the feds don't pretend to know what is necessary for you nor anyone else. Under the nrst, the feds **GASP** leave it up to individuals as to what they decide is "necessary".
No tax system is perfect - the nrst is the best option IMO
Specifically, the nrst when passed will put heavy downward pressure on taxes and hence spending. IMO, that is fundamental to the argument.
I agree Principled, and think equally important to acknowledge is that on honest principle and integrity a consumption tax honors the individual/person as primary ...Not a "pay-your-fair-share" collective wherein the group has precedence over the individual. Sacrificing a portion of the individual/person for the supposed betterment of the group, no matter the size/portion, fails honest principle. Honoring the individual as primary offers the greatest potential for increasing prosperity and well-being for all persons and society.
The smallest minority is the individual -- one person. By respecting and protecting individual life-and-property rights the majority and society is protected. Sacrificing any portion of the individual to the group violates individual rights.
This particular aspect of some of the national retail tax schemes seems very disturbing to me. The idea of the United States government sending a monthly check to every household in the US is a mechanism of socialism at its worst;
The key is whether or not you want an Retail tax or one of the versions of income tax.
Yes, it would be appropriate to remove all exception to the tax, including supposed necessity. There, by rights should be no exception what so ever.
Unfortunately that is not the politically viable choice before us at this to, the future perhaps but not at this time.
The choice is between graduated Income taxes and VATs, the direction the socialist want to take in order to separate the perception of who bears the tax burden from those who partake in government largess.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
And the NRST in which makes the burden equally visible to all citizens.
The NRST recognises on basic principle, and that is the individual must choose and the individual must exercise responsibility commensurate with his liberty.
Life and that which is necessary to life should not be taxed by government, nor should government make the choice of that which is necessary to the individual necessity anymore than is absolutely necessary to fiscal responsibility.
The Family Consumption Allowence(FCA) is a recognition not taxing that which is most precious and the ultimate right of the individual without which all other rights are meaningless. That is life itself.
The FCA is the alternative to government choosing what goods and what service are essential for the individual. A thing that only an individual in the totality of his experience can know.
You may not like the answer I have given or may not feel it pure enough in motive. But the simple fact is this nation will tax, the key is how it should tax and how do we limit its reach in regards to that which should not be taxed.
I see the FCA as the least objectionable in terms of personal freedom to choose for one's self, of other schemes put forth to assure necessity (that minimum necessary to the maintenacne of life) is not taxed and taxation of consumption(an indirect tax) become taxation of property(the most onerous and intrusive of the direct taxes.)
It's your choice my friend.
I agree- this is why socialist leaning folks are so vehemently opposed to this tax reform. THey see their socialist/marxist way of life dissipating!
The idea of the United States government sending a monthly check to every household in the US is a mechanism of socialism at its worst; it is communist-style income redistribution
Redistribution is taking it from one and giving to another. That doesn't happen with the prebate. It is provided to an individual who then spends it back to gov't. No redistribution is taking place.
The reason for the prebate check to all families is to eliminate the need to identify specific items for exclusion and to eliminate the need to track income, as that would open the door to manipulation and politics... exactly what we want to avoid.
If somebody were to try to increase the tax rate, the rate would go up equally on EVERY SINGLE INDIVIDUAL WHO BUYS ANYTHING- every kid, every adult, and most importantly, every single voter.
In today's system, pols can raise taxes continually by playing cat and mouse with who is paying what- giving favors to contributors, playing class warfare, pretending business pays tax.... that all goes away under the nrst's preabte system, which is NOT, btw, redistribution.
And since many states already exempt food, etc. from sales tax, it isn't as if there is any complication in doing so at a national level as well.
Did you know Doritos is exempt but Fritos aren't? Did you know bologna is exempt but hot dogs aren't?
This type of political control over what food "is" ... is so infantile. Simply exempt all necessities as defined by the purchaser.
When taxes through such a mechanism are raised to confiscatory levels, the result is a reduction in consumption (and a direct reduction in tax receipts) that is rapidly apparent to government. In other words government can be immediately shown the folly (damage to the economy, and loss in revenue that it receives) of excessive tax rates, something that is somewhat missing from our current (hidden) tax system
Indeed. This is the assertion made by Alexander Hamilton in the Federalist Papers.
Remember the prebate is not REdistributing anything. It's a wash by individual. Its function legislatively (politically) is to eliminate the tax on necessity. In reality, it helps remind EVERYONE, even the poor, that government has a price.
Even if you're at the poverty level, you'll have to reach in your pocket and cough up the green for your taxes... every time you buy. Of course, the prebate would prevent you from having any net tax liability on necessities, but having to pull green from the pocket is a nice effect IMO.
The elimination of corporate income taxes could reduce prices in the 2-3% range. Even if the highly improbable 20% or 30% reduction came to pass, that does not negate the fact that the tax burden is shifted from higher to lower income taxpayers. This effect could be partially offset by increasing both the FCA and NRST rates. That, in conjunction with a Tobin tax concept could have more appeal, assuming the NRST could be effectively enforced.
Isn't there a danger of massive tax evasion with NRST---just as there is with state and local sales taxes? Also, won't there be plenty of shenanigans perpetrated through the protection of "corporate" purchases? It seems like there would be.
I guess I'll put this aside, for now. If and when there is a real push to enact this legislation, I imagine there will be many objective studies to evaluate. Most of the currently available research appears to be biased material masquerading as serious research on both sides (e.g., LewisLynn linked to a study from a reputable source that showed the opposite of NRST contentions).
I’m assuming that much of it will not be consumed base on taxable items. It may be spent on fine art, existing mansions, etc. The mere fact that wealth increases over time is testimony to the fact that larger and larger percents of higher and higher incomes are not consumed .
Your bracket calculations are based on a snapshot of time
Correct.
Where in your spreadsheet do your distribution calculations take into account whole life income vs expenditure and how taxes distribute through one's whole productive life. There is the only true measure of distribution of tax burden that means anything. You have yet to provide anything of the sort or even hint that you have done such an analysis. Yet Mastromarco and Jorgensen have looked at the effect of the NRST vs the Income/Payroll tax system in just those terms.
I have repeatedly asked you for material dealing with distributional effect. I do not believe you have produced any. That’s the reason I made my own calculation.
I suggest you have a very long way to go in developement of your methodology and data
This may be true, but to date it bears more on the issues of interest to me than any and all studies you have linked in this or previous threads.
How do you demark the "poor" in your distribution as opposed to those of merely low personal income but large capital resource from prior investment/savings or inheritence to draw from in their expenditures?
I don’t recall ever using the term “poor.” I have compared average effects by income level. If you are wondering whether I recognize that any given group contains a range of separate situations the answer is, of course, “yes”. Analyses of this kind all draw conclusions from aggregated data with that understanding.
that does not negate the fact that the tax burden is shifted from higher to lower income taxpayers.
I'll take the straightening out of the distribution from what it is now, thank you. And I have nowhere near the income that being a "higher income" taxpayer. is an issue. Been in the great center most my life, moved to the low income but large resource bunch awhile back.
This effect could be partially offset by increasing both the FCA and NRST rates.
Sorry! Not interested. 23% is more'n enough to do the job. I figure on doing everything I can to decrease that rate myself.
23%........... HR2525 (NRST) rate
14.91% ..... rate if Social Security and Medicare were privatized
14% .......... rate if Nat'l Endowment for the Arts were eliminated
11.9%........ rate if Dept. of Education were eliminated
10% .......... rate if welfare were eliminated
9.8%.......... rate if foreign aid were eliminated
etc.
That, in conjunction with a Tobin tax concept could have more appeal,
You may be interested in hiding tax burden from the electorate as a whole, I'm not.
To remove the perception of the tax burden of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high because a majority of the electorate do not share proportionately in the burden their demand for largesse imposes on the minority of citizens.
The siren call for representation without taxation is the formula that got us where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.
Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
assuming the NRST could be effectively enforced.
Oh it will be, I assure you. By cutting excess largess from the federal budget.
"Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. "
"It is a signal advantage of taxes on articles of consumption
that they contain in their own nature a security against excess.They prescribe their own limit, which cannot be exceeded without
defeating the end proposed - that is, an extension of the revenue.When applied to this object, the saying is as just as it is witty
that, "in political arithmetic, two and two do not always make four."If duties are too high, they lessen the consumption; the collection
is eluded; and the product to the treasury is not so great as when
they are confined within proper and moderate bounds.This forms a complete barrier against any material oppression of the
citizens by taxes of this class, and is itself a natural limitation of
the power of imposing them.Impositions of this kind usually fall under the denomination of indirect
taxes, and must for a long time constitute the chief part of the revenue
raised in this country." (Emphasis added).
The difference between you and I, I am not in the least interested in maintaining the state of government in it current bloated form. I fully hope and expect the NRST to open the electorate's eyes and demand a long over due change.
The Honorable James DeMint (R-SC)
United States House of RepresentativesTHURSDAY, APRIL 5, 2001
12:00 noon"In 1996, Congress passed a historic welfare reform law that has dramatically reduced the number of Americans who depend on welfare. In spite of this positive development, Representative DeMint is concerned about the steady growth of a welfare/entitlement state that extends well beyond the poor and is forcing millions of middle income Americans into dependency.
There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy.
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:
- "If we're to have an income tax, it's a good thing for everyone to pay at least a nominal amount," he said. "If non-taxpayers become a majority in society, what would restrain them from voting for ever higher taxes on others?"
Walter Williams, World Net Daily, 10-25-2000
If you're among those who pay little or no federal income taxes, what do you care about tax cuts? Moreover, if you think tax cuts pose a threat to government handout programs, you might be openly hostile and support Al Gore's silly "risky scheme" talk. So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
Ancient_Geezer: The key is whether or not you want an Retail tax or one of the versions of income tax.
I’m curious. When Technogeeb worries that one of the two establishment parties may actually have a communist intent with regard to FCA, you consider him, perhaps, overly hyperbolic but otherwise aligned with your support of NRST. When I suggest adjustments to merely make the NRST more comparable to the current distribution of tax burden, you consider it a full blown attack on the essence of NRST. How come?
Isn't there a danger of massive tax evasion with NRST---just as there is with state and local sales taxes?
There is a danger of evasion under any system, all it takes under the current system is an individual hide income through cash transactions and avoid filing a return.
Under the NRST, it takes two to tango, and the seller is on the hook for remitting the tax whether or not any purchase has paid. The business is held liable for not remitting a tax he is paid to collect from the customer. It's the business that takes all the risks not his customer.
You expect the NTST will be worse than the income tax? I've got a some sea front property down in southern Colorado to sell yah.
Also, won't there be plenty of shenanigans perpetrated through the protection of "corporate" purchases? It seems like there would be.
The state tax authorities, who charter and licenses retail businesses and keep track of em for tax purposes, don't seem to have much trouble with such. 80 percent of retail sales go through 10% of the businesses. Kmart is not likely to pull many such shennanigans. If people want to call themselves businesses and get the license that would make purchases tax free even possible(for non-consuption purposes), they expose themselves to the State Tax Authority evil eye.
You may be inclined to go that way, but I see no reason to when there are plenty of opportunities to earn a living with out being bothered with collecting NRST, and there is more than sufficient means to live and keep a retail sales tax I might pay as a consumer well below the threshold where it would make a difference legally or even mean much in my budget if I were to be inclined to not pay such a tax.
You really should watch your "it seems", "I say", "I think", and keep the discussion to something less than total speculation.
Ancient_Geezer: I'll take the straightening out of the distribution from what it is now, thank you.
This appears to be the guts of our differences. I oppose a tax that shifts a still greater burden to the middle class and you favor it---perhaps, from your sense of fairness. I feel the middle class already carries a disproportionate share of the burden.
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