Gutknecht pushing national sales tax

Pioneer Press ^ | 11-15-04 | ap

[Rakkasan1]

MINNEAPOLIS - Rep. Gil Gutknecht is pushing legislation that would replace the federal income tax with a national sales tax.

"Think of a world where there is no income tax, where you get to keep everything you earn and you pay the tax man when you buy stuff," Gutknecht, R-Minn., told the Star Tribune of Minneapolis.

[GopherGOPer]

I think you got the other message wrong.

Our current system brings the most burden on the most ambitious. Thus if the poster worked 80 hours per week, his or her tax burden would be much more than someone working 40 hours per week.

Under the new system, which doesn't tax ambition, people would be free to work as much as they want, and not be burdened for their ambition. If you work for 80 hours a week, you only have to pay as much tax as you would normally working 40.

I too would work 80 hours per week. You can build up a retirement account much easier under those conditions.

[agitator]

Um.... don't hold your breath. You think all of those IRS agents are just going to clean out their desks and go get an honest job without a fight? If you were a retailer, think about what the ratio of IRS maggots to retailers will be. And when that "retail" sales tax gets extended to services, every small business in america will have their own personal IRS agent.

[HawaiianGecko]

 

	Here's a reason to NOT support a National Sales Tax. Let's say you are someone who made your money already and retired early.  Example: you made $5 million, paid your 39.6% and are living off of your remaining $3 million.  Every dollar you spend will be taxed AGAIN, and at 23% for a total of your money being taxed at a rate of 63% and that's only federal dollars.  Add to it the 12.4% FICA & 2.9% Medicare and the 7% or whatever your state requires you to tithe  A national sales tax will NOT benefit wealthy people in any way shape or form.

 

[jeremiah]

In Washington state, everybody that makes a sale collects the money and sends it in every quarter. It is quite simple, and takes very little time for small businessmen to to this too. I know, because as a contractor it takes about an hour every three months.

[Rakkasan1]

this assumes I buy everything new(especially big ticket items-cars,boats,bikes) from a store rather than private owner.That's not what I do.
What about taxes on dividends and such?

[AreaMan]

...but I would need to see the 16th Amendment repealed before I would be comfortable with an NRST in fact.

Amen to that. The income tax was advertised to be: ...1 percent on taxable net income above $3,000 ($4,000 for married couples), less deductions and exemptions. It rose gently to a top rate of 7 percent on incomes above $500,000.

Oh how far we've come.

[Rakkasan1]

I'd just like to have the option. I could opt to spend more time with family by working 40-50 hrs a week and still
keep the same amount of money as I do working 80 hrs a week under the current piece of turd system.

[HawaiianGecko]

>>> this assumes I buy everything new(especially big ticket items-cars,boats,bikes) from a store rather than private owner. <<<

It will take the government about 2 minutes to figure this out if a lot of people do it and then the IRS won't be going away, which is one of the main savings inherent in a National Sales Tax.

[rightwingreligiousfanatic]

I think this idea has a lot of merit. There would have to be some sort of phase-in so as not to overly penalize older people on fixed incomes who've already paid more than their fair share, but generally I think this is an idea whose time has come.

Go Gil! (I'm proud that it is a Minnesotan who is leading the charge!)

[Eric in the Ozarks]

Uff da. That's funny.
I used to travel up the North Shore quite a bit. One of my employees lived in Silver Bay, eh ?

[HawaiianGecko]

Here's the problem to be solved: There has to be a way to exempt money that is spent that has been previously taxed. Such as the money your grandmother earned, paid taxes on and stashed in the bank or under her mattress. Why should she be taxed again just for spending money that she saved?

As soon as we start adding IRS staff to handle that problem, we have lost the original intent of a national sales tax.

[kevkrom]

just curious, would repealing the 16th amendment (I agree w/you, it has to happen before NRST/"fairtax") affect state income taxation at all? or is it only needed for the federal income tax?

A couple of points... first of all, the 16th Amendment is neither necessary for federal income taxes (the only practical upshot of the 16th was to extend the definition of income to include items like rent, etc.) nor does it require a federal income tax. Currently pending legislation (HR 25) would eliminate the income, payroll, gift, and estate taxes upon the enactment of the federal sales tax. There are a couple of proposed Amendments pending action that would not only repeal the 16th Amendment, but also explicitly prohibit any form of an income tax. However, there is roughly a 0% chance that Congress will do away with the 16th Amendment until they already have a replacement tax system in place.

As for state income taxes, the states would be free to use whatever system they want. However, since state income taxes generally piggy-back off of the federal filing and enforcement, it may prove difficult for states to maintain income taxes, at least in their current fashion. There are some incentives built into the NRST proposal that would encourage states to adopt the NRST definitions for their own purposes.

[kevkrom]

Here's a reason to NOT support a National Sales Tax. Let's say you are someone who made your money already and retired early. Example: you made $5 million, paid your 39.6% and are living off of your remaining $3 million. Every dollar you spend will be taxed AGAIN, and at 23% for a total of your money being taxed at a rate of 63% and that's only federal dollars. Add to it the 12.4% FICA & 2.9% Medicare and the 7% or whatever your state requires you to tithe A national sales tax will NOT benefit wealthy people in any way shape or form.

All that money is being indirectly taxed under the current system through artifically inflated prices for goods and services.

[stremba]

Repeal of the 16th ammendment is not needed for either the federal or the state government to establish a sales tax. The 16th ammendment allows the federal government to collect income tax. Repeal of that ammendment would ensure that the government would never impose BOTH the sales and income taxes.

[IllumiNaughtyByNature]

This is great because it will make all of the "under the counter" employees (read illegal imigrants) start paying taxes too. The increase in tax revenue would be a windfall.

[rightwingreligiousfanatic]

Here's the problem to be solved: There has to be a way to exempt money that is spent that has been previously taxed. Such as the money your grandmother earned, paid taxes on and stashed in the bank or under her mattress. Why should she be taxed again just for spending money that she saved?

I agree. Maybe there could be some sort of credits given based on age or something? Or, some sort of reduction for certain people, so, if the National Sales Tax was 10%, some people (older) would not pay anything or only 1% and have some sort of ascending scale that would eventually phase out so everybody would eventually pay the same single rate.

It would be complicated and confusing for a while, but think how simple it would be thereafter. Well worth it in my estimation.

[HawaiianGecko]

All that money is being indirectly taxed under the current system through artifically inflated prices for goods and services.

Explain that to my accountants, maybe I can get a deduction for "triple" taxing of my money.

[Little Ray]

Unfortunately, the Imperial Federal Government doesn't need the 16th Amendment to impose an Income Tax. They had an income tax during the War of Northern Agression (aka "The Civil War"), imposed by that paragon of virtue, Abraham Lincoln, without the 16th Amendment.

[TChris]

A national sales tax will NOT benefit wealthy people in any way shape or form.

Who said the goal was to benefit "wealthy people?" I agree that there are some implementation details that will need to be addressed, such as those who have already paid taxes on their money, but the principle of a NRST is sound, IMO.

[HawaiianGecko]

How about two different colors of money. All new payroll monies to be paid out in "blue" currency. All "old" money stays green and only "blue" currency can be taxed.