White House Floats Idea of Dropping Income Tax (altogether)

New York Times, Business and Financial Desk, Page 14, Column 5 ^ | 2/8/2003 | EDMUND L. ANDREWS

[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...

[supercat]

Compare that with a eyebrow-studded tattooed dood who after the passage of this bill will earn for instance, the same $50,000. He will pay no income tax on the money. He will spend it and pay the same 25% consumption tax and will have $37,500 in purchasing power. It's a great deal for him.

A decent deal, but not a great one. He'd be much better off to buy something on credit just before this goes through, and pay for it afterward. That way he gets to avoid both taxes.

[Bigun]

Big corporations ARE the retail buyer for many goods and services -- huge orders of PCs, customized software (costing in the millions), accounting and legal services, temp agencies, etc.

So? What's the problem?

If those items are used to produce the good or service they sell at retail there is NO tax on the sale to them.

Only product(s) or service(s) sold to retail customers would be taxed.

Corporations do not pay taxes period! They mearly collect them from their customers and remit them to the government!

[FreedomCalls]

... all taxes should be collected by the states, or even by the counties and cities as they do in Virginia. Then, what the states don't need, they can send to the US government

That I must say, is an awesome idea my FRiend!

We tried that already. It was when the country existed under the Articles of Confederation. It didn't work.

[Hildy]

I started my own business this year. I took a huge chunk of my life savings to fulfill my dream. I truly don't understand why I have to come up with another chunk to pay an accountant to figure out my taxes. I just don't get it.

[Sabertooth]

The present income tax is over %30 for the higher brackets. Most people pay that amount if you count Social Security and Medicare taxes as well as income taxes.

No kidding. If all Bush does is shuffle the deck, this is a waste of time.

Kill excessive taxes, and cap them Constitutionally. Kill excessive government.

[2nd_Amendment_Defender]

This is a really bad idea. Britain did the same thing. They eliminated their income tax and replaced it with a national Value Added Tax (VAT). A few years later when the tax-and-spend folks got back into office, they re-instated the income tax. Now they have BOTH!

I agree. Just replace the Income Tax with a flat 10% income tax. No complex idiotic paperwork or I.R.S. auditing then.

[PatrioticAmerican]

bump!

[Hostage]

I believe the United States under its Constitution was stabilzed financially by trade tariffs both foreign and domestic as set up by Alexander Hamilton.

Please someone correct me if I am wrong. In any event the income tax was never a glue that held the nation together.

[PatrioticAmerican]

In CHIEF Negotiator Memory BUMP!!!

[Red Dog #1]

I agree with you. I believe Rush and others have spoke before about how "easy monthly payments" for income tax were intended to hide it's true cost. Don't think for a minute that The Predient and his team haven't considered how this might be an extemly usefull tool for cutting govement spending. AND THE REAL REASON IT'LL BE FOUGHT TO THE END!

[groanup]

"If W passes this, he is instantly immortal, bulletproof, and beloved by America for decades,..."

Bump this!!!!

[templar]

Big corporations ARE the retail buyer for many goods and services -- huge orders of PCs, customized software (costing in the millions), accounting and legal services, temp agencies, etc.

These are actually a cost of production. Not taxed now and probably not taxed under NRST. Real estate and such would probably be taxed. Too much money changing hands there to let it slip by the political till.

[Bigun]

You're willing to pay 30%? That's confiscatory. Hello black market.

You are paying FAR more than that NOW my friend you just aren't AWARE of it! (see post #72 of this thread)

Pay PARTICULAR attention to this part!:

Our founding fathers saw an income tax as very dangerous to the freedom of citizens and twice forbade it in the U.S. constitution. In 1913 politicians amended the constitution and passed an income tax that started at 1% for the very rich. Today this has evolved to where the minimum federal income related tax that a low-income person can achieve is 47.3% (15.3% social security & Medicare taxes, 22% hidden tax discussed above, and the minimum income tax rate of 10% = 47.3%). This doesn’t include gasoline, state income and property taxes, etc. The current tax code is very regressive because lower income workers pay a much higher percent of their income in these taxes.

[valkyrieanne]

What would be considered "consumption?" Obviously buying items at the shopping mall - but what about paying for college tuition? Buying medical insurance? Paying a doctor bill?

[valkyrieanne]

That's why a consumption tax is NOT unfair to the "poor" (usually spendthrifts). If they don't SPEND, they don't PAY.

Well, people have to eat and they have to have medicine. Some states already exempt those things from sales taxes.

[crz]

What'd they say? The Russians went to a system of flat tax and tripled their revenues to the government?

The present system is unconstitutional and the only way the government may obtain revenue is through excise tax and tarrifs. They may not tax direct income..even the sale of personal property which would be considered personal investment, could not be taxed.

What would this do? You would see a short periode of upset as the socialists would riot, then you would see the greatest economic boom ever recorded in the history of the USA and I mean EVER!

[Bigun]

No matter what the rates would be on a sales tax type return you can bet they will continue to rise.

You REALLY think so? Even if the law required a detailed receipt, showing the disposition of all taxes collected, be rendered with EVERY purchase?

Our bill has just that requirement and I DOUBT that taxes would continue to rise or that government would continue to grow with that in place!

[Maynerd]

"my cpa just had a coronary. "

LOL. Don't forget the estate and tax lawyers.

[templar]

You're willing to pay 30%? That's confiscatory. Hello black market.

Yeah, but a lot less confiscatory than we got now. BTW, know where I can find the black market? Been feeling a big need for it lately, after the tax bills are paid.

[GovernmentShrinker]

The definition of retail will obviously become a huge issue. For profit corporations currently pay state sales tax on most things they buy for use in their business. Some states tax services, others tax only tangible goods. If a NRST is going to exempt any purchase of any goods or services which the buyer uses in producing something else for resale, the rate is going to have to be sky-high.