Abolish the IRS with National Sales Tax?

Fox News ^ | 11/3/04 | tgusa

[tgusa]

"I'm not exactly sure how big the national sales tax is going to have to be, but it's kind of an interesting idea that we ought to explore seriously," the president said. The next day administration officials said Bush was not considering such a reform.

John Kerry's campaign quickly condemned a national sales tax, and Bush for potentially supporting it.

“If [Bush] has his way, every trip to the supermarket will feel like a visit to H&R Block and every day will be April 15. And now that this plan has been exposed, George W. Bush is trying to mislead the public into thinking it was just an off-the-cuff comment," Kerry spokesman Phil Singer said in an Aug. 12 statement.

[littlelilac]

actually here is how they do it in Canada for example we build houses

we pay GST on all the materials we buy to build the house and we pay GST to most of our trades ( if you don't make over $30,000 from your business, as a subtrade, you don't have to collect the Goods and Services)

then we collect the tax when we sell the house to a purchaser, now with houses we get a special deal, we offset the tax with a rebate, but that is just new housing

so you take the amount of tax you collected then offset it by the GST you paid your suppliers and subtrades and if then you either have to pay the difference or get a refund

(some fool in my hometown just ripped the GST people off for $700,000 - he kept claiming bogus refunds with no revenue coming in - he was renovating a building supposedly)

sound complicated yeah it's a bitch and the rules for grocery stores and retail stores is even more confusing - a Conservative government brought in the GST and Jean Chretien said he would scrap the tax if elected and so I actually broke party ranks and voted for Chretien believing him, I realize what a fool I was like, the one and only time I vote for a lying Liberal,

the Liberals realized what a cash cow it was, and kept the tax, it used to cost 50 cents to collect every dollar, the most expensive tax to collect ever but I don't know if that has improved.......

[Principled]

You aren't getting it. The nrst isn't another tax - it's a replacement of existing tax.

Your chicken little is based on ignorance of the bill.

You're all over the place with wild, random assertions. Pick one and let's get to the bottom of it, eh?

[Principled]

Show me an example that it does raise prices -

[littlelilac]

trust me the world will not collapse with a National Sales Tax - Canada introduced it in 1990.......we're doing fine.....but I believe you must cut income taxes at the same time you introduce the tax.......

in Ontario we pay 8 per cent provincial sales tax on all goods, then the 7 per cent GST on most goods and services for a total of 15 per cent

many European VAT taxes are much higher than 15 per cent and they have high income tax rates.......which I wouldn't recommend.......

[Zon]

$130,000 income. Paid $30,000 income tax. I saved it all. It is in the bank. I go to spend it after you implement your NST and I end up paying $22,500 for the NST. That already is $52,500 in federal taxes before factoring in any "hidded taxes.". Way more than what you calculated.

You earned $130,000 income. You paid $30,000 in taxes. You buy five cars at $20,000 each. Within each of those $20,000 car receipts is $4,500 in hidden. You paid $52,000 in taxes under the income tax. You'd pay the same amount under the NRST.

Your "argument" of using revenue neutral was you obfuscating. Perhaps if you dumped your bias you wouldn't have made the simple error of not understanding that you're already paying $52,000 in tax under the income tax. Plus, your financial privacy is invaded under the income tax. But maybe that's what you want everyone else to succumb to as well.

[tgusa]

All good ideas - the principal problem here in America is that we have uncontrolled spending at the federal level. Neither the administration nor the Congress have any interest in restraining spending. We also have a very regressive income tax structure in which the most productive are the most taxed, and the least taxed are approaching 50% of the voting population. When we reach the tipping point (over 50% of voters being net recipients of income from the federal government) all hell will break loose. Thus the idea that all voters (minus those below some predetermined poverty level - and that in itself causes problems) should feel the pain of unrestrained federal spending.

Thanks for weighing in from Canada, I love it up there.

[ancient_geezer]

Why would they do that? They keep what they collect now.

The keep their own state tax under the NRST as well. The NRST runs parallel with current state retail sales taxes.

Why would they turn it over to the Feds?

Because the feds will take over collection of the NRST if the chose to not do so, just as the old direct & excise tax adminstration requirements worked in the early part of the country's history.

 

United States Statutes at Large
Thirteenth Congress Session. I. Ch. 16. 1813
Chapter XVI. An Act for the assesment and collection of direct taxes and internal duties.(a)

 

Who will audit their collection? Are you going to create a new agency to do this?

Department of Treasury will oversee the tax payment by the 50 States.

I suggest you read the provisions of the actual bill and quit speculating.

H.R.25, S.1493
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.

[Zon]

Worth repeating:

folks this has been on the planning books since BEFORE Bush was elected in 2000. It is the priority after [fighting] terrorism.

[OKSooner]

Yes indeed, and now is the time.

[OKSooner]

Thanks for the ping. I hope we start hearing something about this on oh, I don't know, January 21st or so...

[Zon]

.....but I believe you must cut income taxes at the same time you introduce the tax......

.The Bill being proposed eliminates the federal income tax and the IRS. That's way more than cutting.

[littlelilac]

thanks and Zon is very wise, he knows his stuff, he is right,

for the most part the Goods and Services Tax replaces the Federal Excise Tax which was hidden, and 13.5%

but what our federal government did is also in effect introduce a new tax which is on "services" that is why the tax is a cash cow for the goverment

for example you pay GST when you go to the barber, you hire a painter, etc....

of course there was/is? a booming underground economy esp in the renovation business for people trying to avoid the GST but most bona fide construction companies want the GST credit so they prefer to do it on the up and up and now we have to report all our purchases from subtrades to the government so if someone is collecting GST and not remitting it (as many subtrades did and do, nice cash flow) they will are more likely to get caught......

[Raffus]

Sorry - away from the keyboard. I respectfully disagree. If you had a consumption tax on everything (*hit, we pay on everything now), across the board (for everyone) it is fair.

For example, I make "x" and I spend "x" therefore I pay "x". It's the only fair way.

I have spent a lot of down time thinking of this issue. I do have an accounting degree too. :)

[RKV]

Actually, no, I saved after-tax income. A consumption tax on that money is double taxation. I already paid taxes on it.

[ancient_geezer]

1) I already paid taxes on what I have saved. 2) Now you propose a sales tax to tax AGAIN what I have worked so hard to put away? 3) I am not a fan of the IRS/income taxes, but is it fair to tax people like me AGAIN?

You are paying again now on any savings you may have, government is never "fair".

Government may however lay and collect taxes, including duties and excises per article I section 8 clause 1 of the Constitution , get over it. It is up to you to hold your representatives in government in check and accountable for what it extracts from you.

The best you can hope for was laid out by the founders and proponents of the Constitution in regards to taxation under the Constitution.

 

[Montesquieu wrote in Spirit of the Laws, XIII,c.14:]

• "A capitation is more natural to slavery; a duty on merchandise is more natural to liberty, by reason it has not so direct a relation to the person."
  --Thomas Jefferson: copied into his Commonplace Book.

Patrick Henry, Virginia Ratifying Convention June 12, 1788:

• "the oppression arising from taxation, is not from the amount but, from the mode -- a thorough acquaintance with the condition of the people, is necessary to a just distribution of taxes. The whole wisdom of the science of Government, with respect to taxation, consists in selecting the mode of collection which will best accommodate to the convenience of the people."

Federalist #21:

"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. . Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment." (Emphasis added).

[tpaine]

FreedomCalls wrote:

Who will audit my sales?

Your friendly folks at the Fair Tax Enforcement Division, who formally worked enforcing the IRS code, -- who else?

So then what have we gained? You are replacing one hated bureaucracy for another.

A much smaller bureacracy, for only one 'gain'. Others have been mentioned here.
-- Obviously you haven't understood the rationality behind the Fair Tax, even if you read it.

Do you have a vested interest in the income tax system?

[RKV]

Actually, it just makes it higher. I already paid taxes on that money when I earned it. I can see sales taxes when I pay them now.

[RKV]

Agreed it would be great to get the gov out of my business. No one seems to be able to explain to me why it is fair to give the gov another shot at my money.

[littlelilac]

no income taxes - that would be beautiful - (esp for a Canadian paying about 40 per cent overall income tax rate)

- the only thing I have heard, (and I am clearly not as knowledgable on this topic as you) is the argument that a sales tax would be a more volatile revenue base and that a combination of a low flat income tax and a sale tax would hedge that bet......or perhaps to start off with......

[numberonepal]

Will I be taxed when I mow Mrs. Spinster's yard for $10 or fix her chimney for $100?

Do you claim the money you make when you fix Mrs. Spinster's stuff now?? Most likely not. A true business that has to pay taxes now is licensed by some government agency. Millions live under the radar now and that's not going to change no matter what. There is a limit to what can be policed and still uphold our liberties. I think you are just playing Devil's advocate. Otherwise, go and read the darn code, and then come back with some questions.