Posted on 11/12/2002 11:46:28 PM PST by JohnHuang2
Wait, I think you might be on to something. I am going to assume that the "upper classes" were comprable to nobility. They were the wealthy patrons, land owners, etc.
Although we even more wealthy individuals now, they can't be compared in the same way to those of old. But, there are entities that might be similar. They are called corporations.
An economic crisis would not be a point in time to start asking for more money from corporates, but other crises might best be handled in that way. Practical? I don't know, but maybe worth exploring.
I have to make one correction to my agreement with the government using only 6% of GDP. I think it might good to have a slightly higher percentage that would allow the government to run a surplus (maybe accounting for 8-10%). This way if the Fed can no longer cut interest rates to provide fiscal stimulus, a tax cut remains an option.
Additionally, consumers would DEFINITELY know the Federal sales tax rate......and it would be in front of their faces at all times......every time they spend money. This is a great way to drive home the reality of the cost of government, and woe to the legislator that tries to raise that tax rate, for every consumer in the country would immediately see it and HOWL.
Why? The average persons takehome pay would increase 20-30 percent.
Also, they say a national sales tax would have to be astronomical for the government to collect its current level of revenues.
IT'S THE SAME AMOUNT OF MONEY EITHER WAY!!! You simply give a consumer fallen on hard times a chance to save for a short period of time by postponing purchases.
Yes! We are talking about a POINT of SALE National Retail Sales Tax and NOT a European style Value Added Tax. Plenty of educational material can be found at the Americans for Fair Taxation website.
That simply isn't true my friend! PLEASE take the time to read This research paper on this EXACT subject.
Sorry but you are again incorrect! H.R. 2525, the FairTax bill is completely revenue neutral! PLEASE GO Here and read about what we a re talking about here!
We have exactly 0 protection against having both an income tax and a sales tax as things CURRENTLY stand but if we would demand passage of H.R.2525, currently before congress in the ways and means committee, we would have MANY protections against such a senerio since Income taxes would be illegal by statute, the IRS would be defunded, and ALL their exsisting records would be destroyed! READ it for yourself!
I still like Steve Forbes' idea. A flat tax with the first, say, $30,000 of income exempted for everyone...set at around 15 percent with no deductions to tempt Congress to legislate through tax policy.
Here's how tax rates come out for the Armey/Shelby Flat Tax, a flat individual/corporate income tax, which leaves all SS/Medicare, Federal Unemployment, excise taxes and tariffs in place and unchanged. All new revenue bills are required to be revenue neutral under the Budget Enforcement Act, meaning not projected to not increase the current deficit or decrease current surplus when compared with the current tax law.
http://www.library.unt.edu/govinfo/subject/vital.html
- "The chart below shows a hypothetical set of flat tax rates and allowances that would result in revenue neutrality. This model, produced by the Congressional Budget Office shows that all federal income tax revenues could be fully replaced by a system with a flat tax rate of 13.1 percent and no deductions. Allowing total deductions for a family of four to reach $36,800 (more than double the amount allowed in 1995) would require a 19.9 percent rate."
Joint Economic Committee
Revenue Neutral Tax Rates for Alternative Allowances and Exemptions Under a Flat Tax Standard Allowances Option 1 Option 2 Option 3 Option 4 Option 5 Single $13,100 $13,100 $ 6,550 $ 6,550 $0 Joint $26,200 $26,200 $13,100 $13,100 $0 Head of Household $17,200 $17,200 $ 8,600 $ 8,600 $0 Dependent Exemption $ 5,300 $ 2,650 $ 5,300 $ 2,650 $0 Revenue Neutral Tax Rate 19.9% 19.4% 16.8% 16.3% 13.1% Source: Congressional Budget Office, 1995.
Under the Armey "Flat" tax, as it is currently proposed,(HR1040 introduced 3/15/2001) a single person would pay:
7.65% ---- 7.65%(SS/Medicare) tax on wages/salary income below $13,600,
26.65% --- 19% + 7.65%(SS/Medicare) tax on wages/salary and other taxable income from $13,600-$75,000
20.45% --- 19% + 1.45% Medicare tax on wages/salaries and other taxable income from $75,001 up.
0% -------- on savings & bond income and stock dividends.
And that single person's business/employer pays,
19% ------ on earnings (Gross Receipts less allowed business deductions, exemptions and credits)
13.65% ---- 7.65% on SS/Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's on wages up to $75,000.
7.45% ----- 1.45% on Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's wages greater than $75,000.
Plus additional selective excises and tariffs dependant upon the nature of business engaged in.
Note: The base "Flat Tax Rate" is subject to meet revenue neutrality requirements under the Budget Enforcement act. The 19% rate stated in the Armey/Shelby Flat Tax proposal does not meet these requirements and would of necessity be adjusted upwards, and/or personal exemptions and business deductions be reduced to meet revenue neutrality criteria for enactment.
Further the Flat Tax is a VAT in the manner in which it transfers tax onto the consumer from business which is taxed at all stages of production and passed on to the consumer hidden in price of retail goods an services.
http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm
"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"
"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."
The Flat Income Tax (FIT) proposal, H.R. 1040, has two elements: a Flat Income Tax on an individual's earned income, and a VAT on businesses. The Flat Income Tax on businesses, is, by admission of Professors Robert E. Hall and Alvin Rabushka, who "wrote the book" on the FIT, a subtraction method Value Added Tax.
Quoting Hall and Rabushka ("The Flat Tax," Hoover Institution Press, 1995, pp55,56):
"To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following:
Total revenue from sales of goods and services
less
purchases of inputs from other firms
less
wages, salaries, and pensions paid to workers
less
purchases of plant and equipment."
FReepers, the Flat Income Tax is a Value Added Tax in respect of business taxation. Professor Hall testified to that effect in a Ways and Means Committee Hearing in 1995 as well as in his book on the subject "The Flat Tax" in that same year; And it is an income tax in respect of individual taxation.
So, let us quit wasting bandwidth arguing about the Flat Income Tax. It combines a VAT with an income tax. Those of you who do not like VATs should not like the FIT. And those of you who do not like income taxes should not like the FIT, either.
Maybe Bush is seeing only one or the other tax, either a sales tax or an income tax but not both, but it is a certainty that the liberals in Congress (including some Republicans) don't want to give up wealth re-distribution through income taxation.
The income tax is punishment for the wealthy. As long as people in this country believe that they should pay less taxes than someone else, simply because someone else has a bigger income, then having an NST-only system is a pipe dream. Even my father-in-law, who considers himself very conservative, believes that "rich" people should pay higher percentages in income tax simply because they have more money. This mentality is rampant in the country. We can't have a change in the tax code without a change in the general mindset of the population.
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