Posted on 09/17/2004 9:16:15 AM PDT by LincolnLover
WASHINGTON (Reuters) - President Bush (news - web sites)'s call for a simpler tax code could mark the next step in a gradual move toward a system that places more of a tax burden on consumption and less on savings, analysts say, a direction critics think would put a bigger burden on working Americans.
In his speech to the Republican convention two weeks ago, Bush said he would launch a bipartisan tax reform effort if he wins a second term but offered little direction to those who may wonder what types of changes he envisions.
"The American people deserve -- and our economic future demands -- a simpler, fairer, pro-growth system," Bush declared as he accepted his party's presidential nomination.
Bush has consistently sought to reduce the tax burden on capital, winning cuts in levies on investment gains and dividends and pushing for tax-free savings accounts, in addition to reducing marginal income-tax rates.
"You could characterize many of the steps that have been taken as moving us toward a progressive consumption tax," a tax on money spent rather then earned, said budget expert Rudolph Penner of the Urban Institute. "In other words, basically easing the burden on capital."
"I think they're rapidly reaching the end of where they can go in their current incremental approach," he added.
Pamela Olson, a former Treasury Department (news - web sites) official who had examined reform options for the Bush administration, agreed the president would look favorably on changes to spur savings, but said he was unlikely to fully scrap the current code.
"The president likes an income tax because he thinks an income tax is fair," she said. Olson suggested eliminating capital gains and dividend taxes would be a high priority, saying Bush disliked "double taxation" of corporate earnings.
BEARING THE BRUNT
Republicans argue that more incentives for savings would provide a greater pool of capital that could be tapped to expand the economy's productive potential.
Democrats counter that only wealthy Americans have the wherewithal to boost their savings (emphasis added) and worry a Bush reform effort would weigh heavily on middle-income workers.
"I guess you could call it, if you wanted to look at people rather than things, more tax cuts for the rich. But this time it's going to be revenue neutral, so we're going to raise taxes on the middle class," said Bob McIntyre, director of Citizens for Tax Justice.
Olson cautioned against drawing conclusions about where a Bush-led effort might lead and said easy labels stood in the way of fixing a muddled tax code.
"We keep using this as a political football," she said. "When you strip away the rhetoric you find there is a tremendous amount of agreement among people of all stripes."
Indeed, some past efforts to overhaul the tax code have drawn a measure of bipartisan support.
While Bush has shed little light on his reform views, he has offered kind words on the campaign trail for two broad reform ideas -- a flat tax and a national sales tax.
But former Treasury Secretary Paul O'Neill says Bush showed little appetite for fundamental reform while he was in the administration.
"I don't think he really understands what fundamental tax reform is about -- to him, it's just a line from a speech," O'Neill told author Ron Suskind after the president's latest call for reform. Suskind posted the comment and a November 2002 memo from Olson to O'Neill examining reform options on the Web site for his book, "The Price of Loyalty."
In any event, analysts said, political hurdles would likely prove too high for wholesale changes, particularly at a time the government is trying to rein in record budget gaps.
"I think the odds are strongly against it," Penner said.
Yep, and the Honerable John Linder has it all well under control representing the desires of his constituents of his home district in that great state of Georgia.
Course if you are really that impatient, you can always get together with your partners in crime and commission your own study, release it early and we can have fun playing with that until the CRS study is presented to the House Ways & Means Committee.
Statement of John G. Wilkins, Managing Director,
Barcroft Consulting Group, on behalf of National Retail Federation
Testimony Before the House Committee on Ways and Means
Hearing on Fundamental Tax ReformMr. Chairman and Members of the Committee:
I am managing director of the Barcroft Consulting Group and I am here on behalf of the National Retail Federation. My statement reports on the findings of a study undertaken by PricewaterhouseCoopers ("PWC") for the National Retail Federation Foundation. I was principal author of that study, which examines the economic impact of substituting a national retail sales tax ("NRST") for the federal income tax.
~~~SNIP~~~
Conclusion
If a NRST is enacted, the U.S. economy would lag behind for at least three years and employment would dip by more than one million jobs. Beneficial effects would not be felt for at least five years after adoption. While it is admirable to seek a fairer and simpler tax structure to replace the incredibly complex income tax code, trading an income tax in for a national sales tax is an experiment that could bring serious harm to a flourishing national economy. Uncertain long-run benefits are far insufficient to risk the short-run setbacks in virtually all sectors of the economy.
Course if you are really that impatient, you can always get together with your partners in crime and commission your own study, release it early and we can have fun playing with that until the CRS study is presented to the House Ways & Means Committee.Only if Linder likes the results (which isn't very likely).
Dubya's just looking for a way to throw the nation into a 3~5 year recession.
Right cut taxes, stimulate spending, make a recession. LOL.
Buchanan lost Willie, and the Clinton leftover recession is on its way into the mists of history. Get over it.
Better look to start cutting government programs don't you think?
Hmm! wonder if there is abit of agenda in that so-called testimony of you came up with
"on behalf of National Retail Federation"
PriceWaterhouseCoopers (PWC) study found
Retailers get together with an accounting firm highly dependent upon the current tax system for its profits, to do a study on retail sales taxes based on a Clinton administration budget projection for perpetual 11% increases. Wonder what conclusions besides a 65% tax rate, they are going to come to, LOL.
Fortunately "budget neutrality" against a Clinton administration wish list is not the criteria a replacement tax has been required to meet. Only the "revenue neutral" criteria of replacing revenue of the tax law replaced has been the rule to follow.
Furthermore not even the ridiculous requirement of "revenue" neutrality is required now. With the expiration of the Budget Enforcement and PayGo rules without renewal in order to open the way to make the Bush tax cuts permanent, actual tax cuts in a replacement revenue bill are possible without having to overcome the procedural interference of a democrat minority in opposition to building a strong economy.
Judging from the more uptodate Taxfoundation's figures above, It is clear to see why Linder has submitted HR25 for an uptodate analysis by the Congressional Research Service. With a lower NRST rate targeting the 18-20% area reflecting the Bush tax cuts, the Fair Tax will be an excellent mechanism to make those tax cuts permanent helping Bush achieve one of his goals in the next four years.
new chart bump
your nightmare has told me that he isn't against a consumption tax but he opposes hr25.
he hasn't told me yet what part(s) of consumption tax he is ok with...
it's probably b/c i asked him weeks ago and haven't been around much
above post was supposed to go to you too
don't you know that the income tax and payroll tax are hidden in the prices of everything? Estimates vary around 20% for goods and 25% for services. Saved money is already going to get taxed under your fraudulent income tax status quo.
Only if Linder likes the results (which isn't very likely).
LOL.
|
Total Effective Tax Rates by Level of Government |
|||
| Year | Federal | State | Total |
| 2000 | 23.1% | 10.4% | 33.5% |
| 2001 | 22.2% | 10.5% | 33.7% |
| 2002 1 | 19.7% | 10.2% | 29.2% |
| 2003 2 | 18.5% | 10.1% | 28.6% |
| 2004 3 | 17.9% | 10.0% | 27.9% |
| 1 Economic Growth and Tax Reform Reconciliation Act of 2001 2 The Job Creation and Worker Assistance Act of 2002 3 Job Growth and Tax Relief Reconciliation Act of 2003 Sources: Office of Management and Budget; Internal Revenue Service; Congressional Research Service; National Bureau of Economic Research; Treasury Department; and Tax Foundation calculations. |
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An tax increase I think not it still leaves him with $24,026 in untaxed income.
Your ambitious "reform" scheme is too extreme.
It'd be like throwing a car's transmission into reverse when you're still travelling forward at 55 mph.
More like shifting from low to high gears it looks to me:
Economic studies indicate repealing income taxes and going to a national sales tax would generate a substantial export boom; the level can rise as much as 30% percent above trade under the current tax system in the NRST's first year declining slowly towards a lower trade surplus in succeeding years as the dollar appreciates against foreign currencies encouraging increased investment in the business infrastucture of US.
As a consequence we would see the investment/savings rate almost double in the first year of an NRST over todays levels, both from foreign sources and domestic with spending on investment and industry given taxfree status.
As investment rises so does productivity, GDP and wages and consumption, with increases in GDP of approximately 15% over levels seen under an income/payroll tax system and consequent increase of standard of living.
Anybody who has managed to save money under the current set of rules would have that money taxed again when they try to spend it
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
under your fraudulent proposal.
Nothing fraudulent about it at all, I assure you it is quite real and out in the open:
The original article written by Pat Buchanan back in 1991 that convinced many of us that the NRST was the wave of the future...
|
A tax whose time has gone? As the tax revolt was "the" Idea of 1978 and l980 and term limitations "the" idea of 1990, a popular movement to abolish the federal income tax could be "the" idea of the decade. Mid-April is not a bad time to get a receptive hearing. First, some history. Until 1913 the federal government ran entirely on tariffs and fees. In those 13 decades from 1789 on, we went from being a small farming country to become the greatest industrial power on Earth - with growth rates unequaled since. In 1913, after passage of the 16th Amendment, a federal income tax was imposed. It amounted to just 1 percent for incomes in excess of $3,000 ($4,000 for married couples), with small surtaxes up to 6 percent on incomes from $20,000 to $500,000, the filthy rich. By 1950,an average US. family of four still sent only 2 percent of its income to the Treasury last year, however, the feds were taking 24 per-cent, which helps explain the Reagan Revolution. Comes now an idea for total abolition of the federal income tax, not only on individuals but on corporations, and of estate and gift taxes as well. Cost to the treasury as of 1990: $558 billion. How could the feds recoup that immense sum? Simple. Impose, at the retail level, a 16 per-cent Federal sales tax. Since goods and services exceeded $3.5 trillion last year, that 16 percent sales tax would fully compensate the US. Treasury for what was lost. While the idea is at first a shocker, consider the benefits. As consumption, not savings, would be taxed, the U.S. savings rate, an anemic 3 percent in 1988, would explode. Individuals who salted money away in banks, bonds and stocks would see at pile up, untaxed until they took it out and spent it. Corporations' would not only have $100 billion more in saved income taxes for research, production and marketing, they would have access to hundreds of billions more in a vastly enlarged U.S. savings pool. Since the corporate income tax, 34 percent, would no longer have to be factored into prices, U.S. goods would compete more favorably with imports. Subsidiaries of foreign firms, which now pay an average of 1 percent in corporate income taxes, would be required to compete on a level playing field. Foreigners buying our products and tourists visiting the United States would begin contributing to the U.S. defense budget. Illegal aliens would also begin contributing - on a par with U.S. citizens. The Internal Revenue Service, 94 percent of whose work involves income taxes, could be virtually shut down. Some 5.3 billion man-hours spent filling out income tax forms (at $10 per hour, that's $55.3 billion) would be saved. The underground economy that evades taxes on unreported transactions could not escape the 16 percent sales tax at the grocery store, restaurant, department store or auto showroom. A hundred billion in lost federal revenue would be captured. The feds would not have to bother harassing waitresses for what they think was their tip income; the ladies would simply pay their federal taxes at the department store counter, with no hassle. We would not have to gab about tax simplification, we would have it. Small business, already set up for imposing sales taxes at the stale level, would see accounting expenses disappear. Tax collection would be a piece of cake. Hundreds of thousands of IRS agents, tax lawyers, accountants could be released for more useful work. D.C. lobbyists who spend their days devising loopholes, congressmen whose PAC money depends on giving and withholding favors in the federal tax code, would become sit-perflucus [?] turn. Workers would take home all the money they earned, and hard workers all their overtime. Both would feel it each time they paid federal taxes; both would know whom to blame. The tax on work in the United States would be reduced to zero, on savings to zero, on investment to zero, making Amenca the mast attractive nation on Earth to work in, save in, invest so. Foreign capital would flood into the United States, creating millions of new jobs. Among the losers: Second, organized crime and professional cheats who now evade taxes by not reporting income. The mobster who pays no tax on his sale of 10 kilos cocaine could not avoid that 16 percent federal sales tax when he bought his Porsch, his powerboat, his pool and house. Third, bureaucrats would lose power over the lives of citizens that is theirs by virtue of their intimate knowledge of the wealth and income - and sources of same - for every one of us. Who would resist? Well, since a steep progressive income tax was one of the ideas advanced by Karl Marx in his "Communist Manifesto" - for destroying the bourgeois - his closet followers would fight to the bitter end. For the social levelers, a proposal to replace the federal income tax with a federal sales tax is The Little Big Horn. One political problem comes to mind: As the poor, thanks to the Regan tax cuts, do not pay federal income taxes, and the working class do not pay at 16 percent, they would at first appear to be net losers. This would have to be dealt with. But consider the upside. An economic boom - with no more audits, no more having to store vast records, no more having to answer indecipherable computer-written IRS letters, no more April 15 - Free at last! This article appeared in the Washington Times on April 17, 1991. |
And of Alan Keyes underscoring the time for the change is now:
Keyes on Taxes & Government Spending:
Alan Keyes Interview with Des Moines Register:
|
The intent of the structure of the individual income tax is for political and social mainpulation not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country in perpetual legal jeopardy and to create artificial divisions among the electorate (rich vs. poor; big business vs. the little guy; etc).
Considering those factors, it is always good to remember the philosophical roots of the left which can be found here: Manifesto of the Communist Party, by Karl Marx and Frederick Engels, published in 1848.
Do you really think people pay their marginal tax rate?
Yeah, you BIG GOVERNMENT types are just licking your chops at the prospect of slapping a whopping 30% sales tax on the Internet, electric bills, phone bills, gas bills, cable TV...
Sucking the lifeblood out of consumers and funneling it into the Social Security Administration.
don't you know that the income tax and payroll tax are hidden in the prices of everything? Estimates vary around 20% for goods and 25% for services. Saved money is already going to get taxed under your fraudulent income tax status quo.Really?
LOL. Do you really think the CRS is going to fall for the "giving ourselves money equals revenue" trick?
Scrap the IRS or see millions and millions more discontinue their participation in the fraud and enslavement...
LOL. Do you really think the CRS is going to fall for the "giving ourselves money equals revenue" trick?
The basic reason for the tax on government consumption is that the government does not relieve its contractors and their employees from the reqirement to pay income and payroll taxes today nor provide credits to business for the taxes embedded into consumption price. Thus the government is required to pay the NRST which replaces those taxes paid via government consumption purchases and hiring practices.
Now if you can figure out how to credit back the embedded taxes of all government consumption purchases to government contractors and service providers for income/payroll taxes before the NRST is implemented, we can discuss providing equivalent exemption to the government on its consumption under the NRST as a viable option.
Come to think of it, since we are no longer tied to revenue neutrality criteria. We could just go ahead and exempt government from paying the NRST if you like, and reduce the target revenues by that amount. That way we can assure government wouldn't get a windfall in spendable funds with which to grow on and unecessarily raise tax rates.
In anycase The CRS analyzes bills as is, they don't re-write or add on or remove provisions of the bill under analysis.
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