Posted on 11/18/2004 10:00:17 AM PST by LouAvul
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," said Minnesota Republican Rep. Gil Gutknecht.
That's the basic premise behind a proposed national sales tax, just one of many ideas for overhauling the nation's tax code. Under a bill co-sponsored by Gutknecht and more than 50 others, all federal taxes on income would disappear, but consumers would pay a 23 percent federal sales tax on their consumption - on top of existing state taxes.
Washington is abuzz with ideas after President Bush won a second term and immediately pledged to make "tax reform" a top domestic priority.
Nevertheless, the Senate's top tax-writer is expressing doubts about prospects for a major overhaul, perhaps dealing a blow to its chances. Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, told USA Today that comprehensive tax reform would be "difficult" to do.
Grassley said Bush would have to aggressively use his "bully pulpit" to win wider popular support.
(Excerpt) Read more at sacbee.com ...
Errrrrrrrr! Incorrect Answer. Thank you for playing.
First, the government does not know how much you've earned to be able to buy that Coke.
Second, you voluntarily purchased the Coke and paid the tax. As you might understand, this is a far cry from forcing the taxes from your earnings at the point of a gun. Get it?
So in other words, you'd prefer to still give the government your personal and financial information and have them get a first crack at your paycheck.
The economists that have studied the nrst actually think that retail prices will decrease. Why? because corporate income tax would also go away. This would (in theory) eliminate the built in taxes on all of the goods that we purchase. The common argument is "why would companies lose revenue by lowering their retail prices?" The answer is competition. There will inevitably be one company out there who will cut it's prices to reflect the savings it is getting in not paying taxes. In order to survive, it's competitors will have to follow suit. According to the FairTax website, the economists think that this phenomenon will eventually cause retail prices to fall about 20%. This will cover the majority of what you would pay in sales tax. The beauty of it is that you take home all of the money that you make.
With the Fair Tax plan they would actually decrease, since there would be no taxes on businesses. The cost of doing business would significantly decrease, thereby lowering prices. Besides, businesses don't really pay taxes anyway. They just pass them along in their end prices.
Yeah...except if you decide you'd rather drink your tapwater at a nickel a gallon than buy that expensive Coke, you only pay a penny to the government.
That power to choose is kind of a big deal.
FYI--
Russia now has a flat income tax of 13%. Russia's strategy is to make tax compliance simple and to offer a rate low enough to spur the economy. And it has been effective.
In fact, so effective has the Russian strategy been that the idea is catching fire in other countries. Slovakia ditched its progressive system - with a top rate of 38% -- and replaced it with a flat 19% income tax for both individuals and companies. Slovakia is even implementing a social security system based on personal savings accounts, another innovation that is barely on the American radar screen.
Poland introduced a 19% flat tax for personal income. Serbia is taxing most of its personal income at 10%. Estonia, which was the first of the lot to implement a flat tax, has dropped its rate to 20%.
These countries are actually following the lead of America, which has proved on more than one occasion that low taxes not only boost the economy but eventually lead to more government revenue.
America implemented its first tax-cut experiment in the 1920's. After WWI, the top rate was 77%. By 1925, the U.S. cut the top rate down to 25% and the economy took off like a rocket.
In the 1980's, the experiment was tried again. The Reagan tax cuts reduced the top rate to 28% and the result was the longest peacetime expansion in American history.
I really think a federal consumption tax on purchases would be ideal, at least that way you have some control over how much you're taxed. What the tax rate would be though would be critical to this.
Like I said though, it'll never happen. Politicans are........politicans.
While I'm all for getting rid of the income tax, this proposal would also eliminate the corporate tax. Here in the USA, Corporations pay tax on profits, individuals pay tax on income. If this is adopted it would shift ALL tax burden from corporations to individuals. Somehow I'm not completely sold on the idea yet.
Let's say Homey sells drugs in the projects...a LOT of drugs in the projects. Let's say Homey wants a ride with some bling-bling, if you know what I mean.
Homey goes down to the Jaguar dealership and pays for his new XK-8 with a sack full of cocaine-tainted Ben Franklins; but wait! He gotta pay tax on it too! That's okay. He got another roll of Franklins in his back pocket.
See how that works?
If you can point out to me a corporation that is neither owned nor staffed by individuals, it'll help me to understand the objection.
1. 23% tax on high cost items, lets say an automobile, could have a gross effect on lower wage earners. Imagine a person that must replace an old auto, makes just above the "poverty point", having to pay an extra 23%.
2. Bottom line is for those in higher middle and high tax brackets, who can could afford the extra %23 percent on every item they purchase, this scheme might not sounds so harsh, but for the rest, it could be a real nightmare. To just say, well do without, seems a little cruel. How about the millions of elderly that really only get a fixed retirement, and are already stretched to the limits with paying mortgages, health costs, etc.. How will they fair in such a scheme. How about the many people who have lost professional jobs, and now slave at super low salaries, just to make ends meet, how will they fair in such a scheme.
What on the surface might appear attractive could become a super burden on more people then we realize. And the idea that "well those at or below the poverty line" will get some type of "voucher", means all in that catagory must somehow come under a federally controlled system....THINK.
It will the final legitimalization of what has been in manys eyes an attempt to control vast numbers of people in this country. Food stamps, special programs in some states where low income individuals have state controlled accounts that govern how much money they may spend a month etc.
On the surface, this scheme may sound fine to those who earn a decent salary, or perhaps are simply blessed through family with a lot of money, but for many, and I am talking about vast amounts of very low income honest hard working Americans this could the a super nightmare.
I don't think the proponents of such a scheme are representing our citizen's best interests in this case.
Why can't we just push for a much more streamlined fair tax code for all? Must we disfranchise a part of our citizentry for the sake of only a part that would perhaps benifit in the long run from such a scheme.
Hey $50K earner, what are you going to do when your job goes bye bye, and you simply cannot find a job that will provide lets say $25K of income. You will be shit out of luck!
Consider this: If you make your money selling drugs on the black market right now, you don't report the income and you therefore don't pay any federal income tax on it... but when you spend that money, for example, on a car, or on pair of jeans, or dinner out, chances are you are paying state income tax on those purchases, even though you never reported the income.
If you would like to be added to this ping list let me know.
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:
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.Refer for additional information: http://www.fairtax.org, http://www.salestax.org & http://www.geocities.com/cmcofer/ftax.html
Absolutely not. The APT combines the worst aspects of income taxes and VATs, and completely hides the end cost of government from the people paying the taxes.
Ummm. I think you quoted the wrong guy. But I would have to see some evidence of that. I agree, everything the gubmint does has unintended consequences. My post relates to promises--or inferred promises by people on here (maybe wrongly)--that get broken.
All taxes are borne by individuals. Corporate taxes are eventually borne by individuals via higher prices, lower return on investment, and/or lower wages.
This is a common fallacy -- the "extra 23%" concept. This misses the fact that current prices are artifically inflated by 20-25% on average due to the effects of an income tax. Remember, the NRST is a replacement for existing taxes, not an additional tax.
Corporations can't pay taxes, only humans can. Every tax on a corporation is paid by some combination of its employees, customers, and shareholders.
? I mean...I wouldn't have to fill out any forms, and the IRS wouldn't have to cut checks, audit forms, etc. Wouldn't this eliminate a lot of paper work?
You have hit the crux of the issue. Retail Sales taxes have less associated overhead than any other tax proposal out their.
It eliminates the taxation on businesses throughout the chain of production, reducing costs across the board.
It encourages savings and investment over consumption, a very necessary factor if we are ever to privatize or get rid of the Social Security .
It assures every voter participates in the tax system, assuring everyone sees that cost that everygrowing government has upon us all.
It empowers the citizen and reduces the tools govenment has to use in manipulating the electorate with the social and economic engineering inherent in the income tax system.
| "As a matter of fact, what the income tax does — and this is the debate that I think we always try to get into in order to let you and him fight, see — and the people of this country are led down a path where the actual control of their resources, which in the end is the control over their will, is handed off to the government." . . . "The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system." "In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation." |
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