Posted on 02/08/2003 5:56:38 PM PST by Bigun
White House Floats Idea of Dropping Income Tax Overhaul By EDMUND L. ANDREWS
WASHINGTON, Feb. 7 — President Bush, having already set off a firestorm over his proposals to cut taxes and revamp retirement accounts, suggested today that the time might be near to drop the income tax as a whole and replace it with some form of consumption tax...
(Excerpt) Read more at nytimes.com ...
If you want to make a radical change to the way things are done you need to persuade people that the change will be for the better. Conservatives are conservative because they don't like change for change's sake. That's what "conservative" means -- to conserve what we have. Radicals are the ones who want immediate wholesale change. That's why they are called that -- "radical". Radicals want radical change.
Now if you want to persuade conservatives that what you want to do is good, then you need to look at the above post as a textbook example of what NOT to do. Calling fellow FReeper conservatives "ignorant, old, stupid, and communist" is not the way forward. You either have a coherent argument for your position that will stand up under questioning or you don't. If you don't, you will quickly start calling people who are asking questions names like you were in elementary school. From the above evidence it appears the NRST mafia have no coherent argument else why would they resort to name calling?
Well, the truth is that the boogeyman communist IRS Gestapo will simply recycle into the kinder, gentler Social Security Administration Gestapo who will be handing out cradle-to-grave montlhy rebate checks to everybody in the nation. So gooberment employees don't have to worry about actually losing their jobs.
But if you keep asking questions like this, I'm sure the NRST shills will even promise that it'll cure bad breath and athlete's foot. After all, a national sales tax is the cure for everything else that torments our nation!
You want to eliminate the 22.4% Federal tax
A 22.4% tax with respect to gross income. 0.224 * (gross_expenditure + investments)
and replace it with a 30% (at least) National Retail Sales Tax.
A 23% tax with respect to gross consumption expenditure 0.23 * (consuption expenditure - used_goods purchases.) With the price of consumer goods falling by the lower costs of tax compliance associated with sales taxes as opposed to income/payroll taxes.
The other taxes will continue.
All Federal taxes make up 22.4% of gross personal income. Those taxes are removed to be replaced by a 23% tax on your consumption_expenditure less used goods purchases. More than 90% of the costs associated with income/payroll tax compliance with the current system disappear (.224 * .65)%.
So under your scheme we will have to pay a total of 77.7% total taxes. Hey, let's
You don't save or invest? You buy nothing used. You don't like consumer price reductions, no federal taxes nor taxes imposed on non retail business?
Somehow I don't see the tax burden increase that your sloppy arithmetic and analysis imply. I do however see a substantive decrease from removing costs of tax compliance.
Will the Clean Air Act be repealed? Will the ADA be repealed?
With the NRST all federal taxes become visible to the electorate. How long do you figure that big government can resist an electorate that is confronted with 23% of their grocery bill going out to largess each time they go to the super market.
23%........... HR2525 (NRST) rate on consumption expenditure
14.91% ..... rate if Social Security and Medicare were eliminated
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.
Hmmmmmm....... It's do able, with time and effort, once the blinders are removed from the electorate.
Will there be no one to enforce the collection of the NRST at the point of purchase?
Try the state tax authority that enforces the remittence of retail sales taxes in most states now. That is who is charges with administration and enforcement of the NRST under Linder's bill:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org
What makes you think state and local taxes, compliance costs, and regulatory costs will go away after the NRST is implemented?
As far as State local governments go, hey you have to fight those battles for yourself. The Constitution does not allow the Federal government to dictate what your state hits you with. I would note however that most state income tax systems ride piggyback on the federal income and payroll tax laws. Do away with the Federal income and payroll taxes and implement the NRST, that gives a platform and encouragement to change state and local tax laws.
Its up to you.
The competitive market will ensure that price is as low as possible. It does so today, it will do so under an nrst. If you fail to see this, ask yourself why all milk is about the same price, or why all comparable goods are priced comparably.
And it is completely true that consumption is more stable than income. I have plenty of research behind it. Do you have more than a hunch?
Yes, the tax is charged at the register on all goods. This is to prevent the game of exempt this or that. Like in Indiana, Doritos are a food and not taxed, but Fritos are a snack and are taxed. What the hell is up with that?
Anyway, the idea is to eliminate the lobbying of the code.
The "prebate" is sent to all who wish to receive it. It is in the amount of 23% of the poverty level for a household of a particular size. It is, of course, sent in advance. The SSA, which already sends $ out would do this prebate.
And if you choose to spend more on something, it's your choice. You don't have to do so. Rememeber our fundamental disagreement, that I believe prices won't change. So if prices won't change, there will be no difference in your buying decisions based on price. The nrst will have no effect on pricing decisions cuz prices will be about the same. If you choose to buy more expensive food or medicine now, you'll do so under the nrst too - cuz prices don't change.
And spend another few minutes on qualified family. Your 18-21 thing is silly.
That's a might tall task, considering the many, many different facets and influences of the current tax code. But I'll give it a try.
The absolute worst thing about the NRST is that it is a gigantic, oversimplified, one-size-fits-all panacea. All forms of taxation, be it sales tax, income tax, inheritance tax, payroll tax, tariffs, property tax, excise taxes, etc. etc. have their own characteristic influences on our economy. Given the size and complexity of the federal government, providing its massive funding requirements through a single, oversimplified revenue source (a national sales tax) would amplify those economic influences that are inherent to a sales tax severely out of proportion.
The primary criticism of a sales tax is that sales taxes are inherently regressive. That's to say, people on the lower rungs of the socio-economic ladder bear the brunt of the tax burden because they must pay a larger percentage of their scant resources to pay taxes on the necessities of life: food, clothing, shelter and medicines. NRST proposes to lessen this effect through Social Security "rebates", but that's just another variation on the same old socialist income redistribution scheme of one group of taxpayers subsidizing another. (Even worse since it abolishes the pretense that Social Security distribution is based at least in part on previous contributions.) For the most part, the rebate subsidy will be paid by the Middle Class to those lower down the ladder, undermining the Middle Class. More affluent people will be far less affected as a percentage of their resources. And payment of "universal rebates" to everybody only raises the question of why the sales tax rate was set so high that rebates to everyone is even necessary.
Another inherent effect of a sales tax is that it discourages consumption of the item being taxed. So a 23~30% federal sales tax (depending on how you calculate it) would inherently stifle consumption in our "consumer oriented economy". At such high tax levels, one could also expect that the predominant form of tax evasion that would emerge would be the classic "Black Market".
Another inherent effect of an "all-the-eggs-in-one-basket" nature of the NRST proposal is the way federal revenues would fluctuate with economic business cycles. In times of economic prosperity, federal sales tax revenues would balloon, tempting the bureacracy to squander the surplus just like we've seen many states do during the boom of the '90s. But when economic downturns inevitably occur, sales taxes fall off precipitously, just like we're witnessing in California. All in all, a pretty unstable situatation that wouldn't be tolerated by Congress. So in the end, no matter the ideal vision of "reform" espoused by NRST advocates, you know as well as I do that the Congresscritters will set about to distort the NRST just as bad as the Income Tax before the ink is even dry.
Is this my "best arguement" against the NRST? No, IMHO it's more effective to address specific parts of the proposal as I frequently do. But this does provide somewhat of a summary. I'm not entirely opposed to the concept of a national sales tax. Perhaps a lower sales tax of 5% on non-necessities could be implemented to lower other forms of taxation. But this all-in-one panacea to scrap all other taxes is simply too extreme and outlandish. The government (and we the taxpayers) are better off spreading the tax burden and effects of taxation over the economic stability of multiple types of taxes.
“I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.” [Thomas Jefferson, letter to Benjamin Rush, 1800.]
We will never be a truly FRee people so long as we have the income tax and the IRS.
Click here to help us scrap the Code, scrap the IRS and abolish the VLWC!
We will never be a truly FRee people so long as we have the income tax and the IRS.
You can also click here to sign a petition in support of Fundamental Tax Replacement.
We will never be a truly FRee people so long as we have the income tax and the IRS.
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