Posted on 02/08/2003 5:56:38 PM PST by 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...
(Excerpt) Read more at nytimes.com ...
That being said, almost anything is better than the present system.
Look at the current federal budget. Project the cost of fighting terrorism. We're going to pay for it one way or the other. Some people don't mind it if they pay their taxes on consumer goods rather than on a 1040. It's all the same to me. If I'm forced to buy a junker instead of a new car to save on taxes I'm supposed to feel good about it. Like I said, we're going to pay one way or another.
Do you know how much of your $1.78 per gallon unleaded is tax?
Far too much as the greater portion currently is made up as a combination of fuel excise taxes, state and federal, as well as 33% income & payroll taxes all up and down the line of production chain.
Under a pure National Retail Sales Tax like the Linder proposal, those excise, income & payroll taxes would be repealed and replaced by a single rate, single stage tax at the retail pump bringing the total tax plus shelf price much lower that that current $1.78.
So what exactly is your point?
Try 50%....
Mr. FROST. Mr. Speaker, I yield myself 30 seconds.Mr. Speaker, the previous speaker was asking about simplicity and how do we understand all of this. Let me read a memo from the Joint Committee on Taxation . This ought to be simple enough for the gentleman to understand.
The memorandum is in response to their request for an estimate of the budget neutral tax rate for H.R. 2525. That is the bill of the gentleman from Georgia (Mr. LINDER), a bill to replace the current U.S. corporate and individual income, estate and gift and Federal income contributions act, payroll taxes, with a flat tax on retail sales of all goods and services.
Then on the second page it has a little chart here, neutral over 5 years, 59.5 percent. That is what they want to do, neutral over 5 years, national sales tax 59.5 percent. I believe the American people can understand that.
Corporate purchases account for approximately 20-25% of all sales in the US. About 65-70% is you and me... and the government makes up the rest.
I don't know your exact point you are making, but as it stands many businesses write off much of their purchases as cost of doing business.
The CEOs and Sales execs live high on the corporate dollar hog and write it off as expense.
All hail GW, emperor of the US...
I already like him, but this would turn it into an all out love affair :0)
Don't take this wrong but life is a bitch. I own a small business and every month I have to pay about $5000 for social security for my employees. This is money I will never ever see but they will. Yes, I'm getting double taxed because I also have to pay Federal, state and medicare tax as well us unemployment tax for the free loaders.
If you have your retirement money in tax free savings or 401K's then your double tax is maybe 10% of your example.
Also, prices on goods have about 30% padded in to cover the business taxes so having no taxes would lower prices about 30% so the end price to the buyer would be about the same or even lower.
Statement of Laurence J. Kotlikoff,
Professor of Economics, Boston University, and
Research Associate, National Bureau of Economic Research
Testimony Before the House Committee on Ways and Means
Hearing on Fundamental Tax Reform
April 11, 2000
....So what does taxing consumption have to do with achieving a generationally equitable fiscal policy? Again, essentially everything. The reason is that the current elderly as well as the baby boomers, who will shortly retire, have one primary economic activity left to accomplish - consumption. And under a consumption tax, they will pay a lot more in future taxes than they would under the current tax system. Although the elderly as a group would share in the burden of a consumption tax, the poor elderly - those living exclusively on Social Security benefits - would not because their benefits are indexed to the consumer price level and are thus guaranteed in real terms.To recapitulate, given the likely path of government spending and the inevitable aging of our society, our children and our children's children are in for extremely rough sledding. Indeed, the CBO-FED study suggests they will face lifetime net tax rates (1) that are 80 percent higher than those we face if nothing is done. This generational imbalance, rather than the treatment of the rich versus the poor within a generation, is the fundamental issue of economic justice facing us today. Consumption taxation can address that issue by asking the current and near-term elderly to do their fair share in helping to achieve generational balance.
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Were the very staid and well established businessmen and women who advocate the Fair Tax to proclaim that their tax reform 1) levies a tax on the holdings of wealth, 2) provides a highly progressive tax rebate, and 3) implies an increase in Social Security benefits and, most likely, transfers to the poor, they would probably be viewed as members of a vast left-wing conspiracy. But this is precisely what they are recommending.
There is already a black market and those who don't pay or falsify...
Lets just make the thing easy. The idea of being able to staple the tax code to a telephone pole instead of the 6 inch thick volume that is revised every year is appealing.
There are cheaters and always will be...
With this plan I would suggest making the tax remittance monthly. That way when you suspect the local 7-11 of screwing the system via cash only systems, you only have to stake out the joint for a month to find out if they are on the level...
CHIEF was workin' it from above. RIP pal- miss you and think of you often.
Then you get into the question of definitions...what is wholesale and what is retail
How is that? The bill explicitly defines the tax is to be remitted by the seller of untaxed goods and services to the non-business purchasers, that business to business sales are explicitly exempted from the tax.
Read it, decide for yourself, mash here [ H.R.25 ]
SPONSOR: Rep Linder, John (introduced 01/7/2003)
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: http://www.fairtax.org & http://www.salestax.org
Be careful what you wish for. You might just get it, and it may make you wax nostalgic over the "good old days" of the income tax.
Strange, all but a very few states have state sales taxes that are much more complex than the NRST proposed under the Linder bill [ H.R.25 ]. I haven't noted any evidence of such dire consequences at all. In fact the biggest gripe seems to be that of government in finding much more electorate resistence to rate increases than seen in comparison with other forms of tax such as state income taxes.
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