1 Bad precedent.

2 Insofar as taxes discourage whatever they tax, taxing income taxes and thus discourages productivity and work.

Taxing sales taxes and discourages consumption. Which is what we need at this point after 2 decades or a consumer economy balloon.

3 Ace isn't wong if-and its a big if-this were a Constitutional Amendment that replaced the income tax and was fixed so any change woukld require an amendment.  Anything less just gives the impure among us the excuse to increase taxes on the whim of the moment.

4 At least get rid of the EITC before we do anything else.

5 I do not believe the crack whores in DC will give up the income tax in exchange for a sales tax and I'm not interested in paying both.

6 replace the federal income tax and I'm cool with it. wow, and then people in blue states like mine wouldn't have all the federal taxes paid to deduct . . . you would see quite the migration!!

7 >>>-this were a Constitutional Amendment that replaced the income tax and was fixed so any change woukld require an amendment. Yeah I was thinking that, or something like any increase requires a clean vote (that is, no linking it/attaching it to any other bill) by 3/5ths of both houses.

8 The problem with a national sales tax is that it's how the Bad Guys get around Hauser's Law. (See Dan Mitchell's discussion of the VAT  and Hauser's Law.)

The other problem is that the government (in total) gets around Hauser's Law -- the Federal government is limited in its taxing power, but the cities and states are already soaking their constituents as much as they can. If you let the Federales tax sales, then sales tax in L.A. goes from 10% to God knows what.

9 3% today, then just a penny more tomorrow, and so on, and so on.

Sorry, no sale.

10 this is what the FairTax is all about, replacing the Income Tax with a National Sales Tax

11 The Bureaucracy for this would be outrageous. Are you gonna tax "Services" also? Medical procedures? Who is gonna collect it? Who is gonna audit it? What happens then to State Sales Taxes? And on and on and on.

12 If you thank that a national sales tax wouldn't be on top of the already existing and soon to be existing taxes, and subject to yearly increases because it's the so-called reasonable and responsible thing to do, then I have some magic beans for you for sale, cheap.

The three ring circus would assume that sales would be the same, and spend accordingly every last penny they assumed would come in but never does

13 But that said, I think the public *IS* pretty sensitive to a deliberately obnoxious (non-invisible) sales tax so there would be a natural political resistance to raising it anyway.

14 Don't we already have a federal sales tax on gasoline and diesel and isn't this, in effect, a national sales tax on every good moved throughout the country?

15

FAIR TAX. Do It! This is basically what it is, with the added bonus that you eliminate income tax. Also, far fewer loopholes those naughty rich people can exploit to hide their money, plus the added bonus that a nice chunk of the 51% you're talking about get to participate and finally have some skin in the game.

But DO NOT set it up to implement a national sales tax but leave the income tax rolling along as it is. I think that would be a disaster.

16 You don't get it.  We need to stop ENABLING THE BEAST YOU FUCKING IDIOT!!!!!  WHAT THE FUCK IS WRONG WITH YOU????  GIVE THEM MORE AND THEY SPEND MORE!!!

17 >>>3% today, then just a penny more tomorrow, and so on, and so on. Same can be said for any tax. They're currently dreaming up ways of extracting more money without touching marginal rates, by eliminating deductions and stuff. There is nothing special here for them to exploit. Actually, there's less, because you can't hide a sales tax increase as they're trying to hide an income tax increase through "closed loopholes."

18 As has been said, if this replaced the income tax, I'd be for it.  Along with it, no way.

19 I want some kind of a .01% annual wealth tax to get the tax  money from the trust fund liberals and others whose money isn't income, per se. 

The real downside is that you would have to identify your own assets to the beast.

20 There would be no dropping of the income or any other tax in trade for the sales tax. There'd be a sales tax on top of those taxes.

And still the clowns would have to borrow even more to cover their insatiable spending habits

21 So now you will tax the tax that's already taxed on my cigarettes?

22 @13 Sure they are, until we offer to include subsidies to "hard-working American families" to offset the increases in the rate.

It just adds another tool to the toolbox for the tax-and-spend cohort.

23 Ken, a warning: You are about to be banned. I am goddamned tired of the all-caps conniption brigades. Take your goddamned emotional problems elsewhere. This is not a goddamned psychiatric site. This is not therapy, asshole.

24 The income tax started at 1%

25 I've been sold on the National Sales Tax (on everything except food) for 20 years now. It needs to be no more than 5%, and would likely double government revenue.

Why? Because it means even the criminal element would be paying taxes. EVERYONE would share in the tax burden, including the "poor" who seem to be able to afford flat panel TVs, cell phones, and monthly cable.

26 Don't we already have a federal sales tax on gasoline and diesel and isn't this, in effect, a national sales tax on every good moved throughout the country?
Posted by: huerfano

Whoa, that is a great point.

27 Addendum:

I am in favor of the National sales tax REPLACING income tax...not accompanying it.

28 That is a good point. But it's an indirect tax with regard to all other goods. Indirect taxes are invisible. Direct taxes are visible.

29 But that said, I think the public *IS* pretty sensitive to a deliberately obnoxious (non-invisible) sales tax so there would be a natural political resistance to raising it anyway.

There was also a natural political resistance to Obamacare, but it got shoved through anyway...

30

This is not a goddamned psychiatric site.

Wait - what?

31 wow, and then people in blue states like mine wouldn't have all the federal taxes paid to deduct . . . you would see quite the migration!!

Posted by: BlackOrchid at August 01, 2011 03:03 PM (SB0V2)

Actually, that's a tax simplification I can encourage.  Why should high-tax states benefit in this way?

32 Don't we already have a federal sales tax on gasoline and diesel and isn't this, in effect, a national sales tax on every good moved throughout the country?

More like a "carbon tax" or a "weight tax" or a "shipping tax". But you're right.

(An aside: there was a mobster -- Micheal Franceze, I think -- who made a zillion dollars by selling gas and not turning in the sales tax to the authorities. Managed to stay ahead of the Law by not running the same company for too long; he'd shut one down, then start a new one and repeat the scam.)

33 This is not a goddamned psychiatric site.

We fap here, so as not to rape out there.

34 Because it means even the criminal element would be paying taxes. Oh yeah? Ever hear of the "cash" economy? Sometimes better known as the "Underground" economy?

35 Huerfano does make a good point, but those who are essentially ensconced in the city with PASS cards are really not seeing that particular tax too much. If they had to actually pay a small percentage when they bought new Doc Martins, Mudhoney live show CDs, etc, they might feel a bit more "included" in our federal system. (You know how the yutes love that stuff)

36 A national sales tax only works if it's a straight replacement for a national income tax, not as a gimmick to just lower income taxes a little. Otherwise, you end up getting ass-slammed from both directions when the rates go up (and they will). There's also the question of whether or not you want the federal government having transaction-level visibility of all business.

37 >> this is what the FairTax is all about, replacing the Income Tax with a National Sales Tax

Beat me to it. There's no reason at all to have both an income tax and a sales tax.

The administrative burden and cost to businesses would be lessened, as they're currently complying with both an income tax regime at the federal level (and lots of states) and serve as sales tax collectors and remitters at the state and local level (in most states).

And the administrative burden to the taxpaying citizen vanishes along with a big chunk of the IRS.

38 Kind of reminds me of George Costanza telling Steinbrenner that he had an idea how to get Griffey AND Bonds and not have to give up much

39 32. I agree completely AmishDude! I was saying, that's another benefit. I would mind paying state income taxes a hell of a lot more if I didn't get the (very large, ick) deduction for my large federal tax payments.

40 @17 Same can be said for any tax.

Exactly.  So, what was the point again?

Now they get an additional wedge issue/class warfare issue as, oh by the way, as with most state sales taxes, certain categories of goods will be exempt or taxed at a different rate, and do we really want to hand yet another social engineering tool issue to our tax-and-spend friends in government?

Count me as definitely opposed to this.

41 >>>Actually, that's a tax simplification I can encourage. Why should high-tax states benefit in this way? I completely agree with this. This seems to be a no-brainer. Except for the poor conservatives in blue states, who will ask, "Dudes, why the hell are you punishing me?" But high state tax rates are currently almost a freebie, and low-tax states wind up *subsidizing* high tax states.

42 Sorry, OT but dunno where to put it... You guys seen this from Politico? A day late and a few trillions short, but nevertheless: Romney: “As president, my plan would have produced a budget that was cut, capped and balanced – not one that opens the door to higher taxes and puts defense cuts on the table. President Obama’s leadership failure has pushed the economy to the brink at the eleventh hour and 59th minute. While I appreciate the extraordinarily difficult situation President Obama’s lack of leadership has placed Republican Members of Congress in, I personally cannot support this deal.”

43 Yep everyone should go read up on the Fair Tax.  http://www.fairtax.org

And I don't believe that this would require a Constitutional Amendment since a sales tax is not considered a direct tax on people like the income tax was back in 1913.  And if done like proposed, it is not a hidden tax since it appears on each and every cash register receipt or invoice as a line item.  The evil hidden tax is the value added tax in Europe.

A tax on consumption rather than income would be a huge boost to economic growth.  The US Congress needs to get about maximizing economic growth and thereby getting larger revenues for essential services rather than this current practice of trying to manage winners and losers and playing groups against one another.

44
I'm not knocking the idea but...

reforming the tax code instead of first cutting spending is like granting blanket Amnesty without first securing the borders.

45 So anyone that has worked and saved and paid tax on their income now gets taxed again when they go to spend that after-tax income?  That's bullshit.  And try getting the AARP on board with that.

46 Ace,

I'm with you on this - not just because it equalizes taxation, and gets every one's skin in the game, but also because it will increase the nations savings rate, which will make us less susceptible to the fickleness of the Chinese.

Even with a VAT, you can mandate that the percentage, and the dollar amount that the percentage equals for that transaction, be on the receipt for that transaction - so that everyone can see it.

The one draw back that I do have is that it does hit low incomes perhaps too hard, but I would be a lot more supportive of an EITC if there was a VAT (with no other income taxes, other than FICA, SS withholdings, etc.).

47 This is not a goddamned psychiatric site.

You mean this isn't the appropriate forum to discuss my predilection for banging the creamy center of a Hostess DingDong?

48 We fap here, so as not to rape fap out there. This works too.

49 I want some kind of a .01% annual wealth tax to get the tax  money from the trust fund liberals and others whose money isn't income, per se.

It's called a property tax. Put simply, a property tax is a tax on wealth.

It's how the government used to generate revenue, way back when.

50 14 Hit it.There already IS an national sales tax,on fuel.It falls on everyone.

51 Hey Ken?

You know, you're right. If you give them more, they do spend more. Problem with your lack of foresight is that you're not thinking of the millions of new taxpayers that would be added to the rolls.

See, right now only half the populace opposes tax hikes because only half the populace pays taxes.

Get ALL of the populace paying taxes (through a national sales tax that REPLACES the income tax), and subsequent tax hikes would be disapproved of by all of the populace, not just half.

This is why the Dems are against a national sales tax. Their constituents would vote them out of office for approving any kind of future tax hikes.

A national sales tax means we would never see another tax hike again.

52 Because it means even the criminal element would be paying taxes.

I disagree.  Perhaps in the urban environment this would be true, out here, not so much.  Sales tax evasion is already a way of life out in rural America and if the rates were higher it would become even more widespread. 

53 Why don't we spend less and make the government smaller so we pay high taxes? Smaller government = good government.

54 How about we let them tax us when they're better at managing the money we give them now?

55 You mean this isn't the appropriate forum to discuss my predilection for banging the creamy center of a Hostess DingDong?


Go on.

56 If it replaced the income tax, sure.  But no way in hell if it's in addition to all our other taxes.

57 But there will be no VAT at Military Exchanges right?

58 If you want a one time revenue-generator: change the color of the money from green to red (or whatever). Criminals sitting on hoards of cash would have to declare.

59 I don't mean too sound too dismissive.  I am just leery of adding another layer of complexity to this Rube Goldberg machine we have now.

60 " Because it means even the criminal element would be paying taxes.

Oh yeah? Ever hear of the "cash" economy? Sometimes better known as the "Underground" economy?"

Yup... and eventually all that cash has to surface at some point in order to change hands legitimately. It's used to buy stuff, which gets taxed. Criminals don't steal EVERYTHING they own.

61 What's 3% of GDP?

62 cut the spendings first

63 A national sales tax to replace the income tax is the clear answer here.  It is the most purely progressive tax that we have as the wealthy buy more stuff than the poor.  Because it applies to all goods, you simply cannot choose to consume elsewhere to avoid the tax.  This means that if you wish to consume you will pay.

It is really just "rent" for using the country and it's goods and services.  The more you use, the more you pay in "rent".

The fact that you are paying no income tax on the front end will make you feel richer and more open to paying the national sales tax.  Also, based upon the laws of supply and demand, much of the additional cost of the tax would be absorbed in lowered prices to the consumer if the higher taxes reduced demand.  Within 10 years, goods would probably cost as much with the tax as they would have without it.

The best part of all is THAT YOU HAVE A CHOICE.  Right now the government holds a gun to your head and takes your money.  With a national sales tax you can simply choose not to buy an item if you do not wish to pay the tax.

In addition, economic decisions would be made based upon their intrinsic value and not based upon tax avoidance.  In the long run, this reduces opportunities for speculative bubbles which wreck our economy every time they happen.

The idea that this will open us to "tax creep" is bullshit.  Look what state governments have to go through now just to raise their sales taxes 1/4 point.  Believe me, people would notice.

It is THE solution.

64 Don't like the idea. Income tax is personal while sales tax is abstract. No one is going to be pissed off at their congresscritter for voting to raise sales tax in the same way as income tax. Show me a case where a state pol was run out of office because of a vote to raise sales tax? Exactly how many times has a state sakes tax been lowered? Keep taxes on voters, not transactions.

65 It would be easier and more controllable/Auditable/collectable to place the tax at the production level

66 Phase in a flat rate tax for those who pay no tax today. Or a reverse AMT that hits people not paying any taxes under the normal calculations.

Progressive taxation means everyone has skin in the game.

A national sales tax is a horrible idea. The fact it is a visible tax is indeed the reason it would retard growth. 

67 So how do you get more of the public to have "skin in the game" as far as increasing taxation?

I am totally against a national sales tax.

The only real fair tax is a flat tax and it would have to be implemented in a very specific matter via Constitutional Amendment.

I would go for a flat 15% tax on ALL income regardless of source and regardless of amount. I would also tie government spending into that such that they could not spend any more than the amount collected from previous year's revenues.

I would give them one exception. They could spend more during a declared war, however once the war was over spending would have to decrease by 5% until the war deficit was paid off.

And congressman who voted to implement a spending or tax bill that exceeded that amount would be subject to a national recall election subject to a majority vote.

68 This is not a goddamned psychiatric site.

No, this is the Germaphobe Anonymous Meeting, the Rageaholics Meeting is next door

69 1. You would have to get rid of the income tax by constitutional amendment first or you would have both.

2. it gets way to complicated, because there will be calls to rebate for the poor or even pre-bates.

3. Small businesses become the collectors for the IRS.  Huge amount of corruption possibilities.  My guess the black market will increase for everything.

70 What's 3% of GDP?

Posted by: ronno at August 01, 2011 03:16 PM (nQR0p)

Given a GDP of ~$15 trillion, about $450 billion.

71 I like the idea, but as others have said not in the sense that I want to add revenue to uncle sam, only to remove loopholes and broaden the base and get every one into the game.

72 Given the choice between taxing income, which is usually the result of being productive, and taxing spending, I am going to go with taxing spending.

73 "Sales tax evasion is already a way of life out in rural America"

How is this accomplished? The only way to avoid buying anything is to steal it.

74 I'm not assuming Congress can just claim "Commerce Clause" and implement such a tax of their own authority.

Why wouldn't you assume that ...

75 Great idea!

76 Oh also, the so-called 'fair tax" is a POS.

77 There's not a chance in hell this would ever replace the income tax -- that's the problem.  So on top of income taxes we'd also have a Fair Tax whose net effect could only be to stifle consumer spending and depress the economy even more than it is.  And that "Fair Tax" would disproportionately impact lower income groups who would have a harder time buying necessities.

Better to simply (I know, nothing simple about it) reform the tax code so that everybody is paying something.  A flat 10% of all annual income, or something like that.

78 "I'm with you on this - not just because it equalizes taxation, and gets every one's skin in the game, but also because it will increase the nations savings rate, which will make us less susceptible to the fickleness of the Chinese."

Exactly. It's also inherently progressive, but in a way that is natural rather than determined by politicians.

79 You're totally incorrect on it not being invisible. Living in NH where there isn't a tax I get very pissed when I travel to Washington or California where it's 9.5-10%. The local MORONS don't even notice the tax. They just keep paying like lemmings. "Hey buy our Barnes and Noble card so you can save paying the STATE tax and still pay the cover price!! " Woohoo WHAT A DEAL!

80

This is not a goddamned  psychiatric site.

 

Only the editors are authorized strait jackets.

81
Here I am to save the dayyyyyy!

82 Tax simplification would be better. Don't get me wrong, I'd love to get rid of the income tax, but I don't think the left will go for it because a sales tax is, supposedly, a regressive tax. Better to institute a low flat tax with no deductions than to have a tax that could be imposed on top of income taxes unless we go through the relatively herculean task of repealing the (16th? too lazy to look) amendment.

83 Ace is right about this. It isn't a contradiction to say that government spending is too high but that some taxes are too low. We need to lower taxes overall but raise the taxes that make sense to be raised. Another good aspect of taxing consumption versus income is that it shifts the tax burden toward the old, who made out like bandits by paying into social security and medicare when taxes were low and collecting when benefits are high. We also need to raise the gas tax (while reducing other taxes more). If we raise the gas tax, the amount of oil Americans will demand at any given pre-tax world price will go down. This causes a decrease in the pre-tax world price of a barrel of oil, in effect, causing a good portion of the tax to paid by owners of the oil, who are generally people who don't have our best interests at heart. It's the corporate tax and the income tax which needs to be lowered to make up for a sales tax and an increase in gasoline taxes. (The corporate tax just causes all our stuff to be made in China).

84 Exactly how many times has a state sakes tax been lowered?

Keep taxes on voters, not transactions. Posted by: Serious Cat at August 01, 2011 03:17 PM

I don't really know about state sales taxes, but local and county gross receipts taxes raise and lower all the time because they are often raised for specific projects and when the project is complete, the tax is done.

85 Nope, no thanks.  Hits the elderly/fixed income crowd.  The hell with paying the government to eat, to stay warm/cool, or to have shelter.

86 As a aside, the equivalent sales tax percent vs. income tax percent is higher.  A 50% income tax is equivalent to a 100% sales tax, for example. You'd need to earn $2 to buy something priced at $1 in either example. The higher the percent, the greater the difference (a 10% income tax is equivalent to an 11.111...% sales tax. )

100% income tax would be the same an infinite sales tax.

87 72 What's 3% of GDP?

Posted by: ronno at August 01, 2011 03:16 PM (nQR0p)

Given a GDP of ~$15 trillion, about $450 billion.

Posted by: blue star at August 01, 2011 03:19 PM (SJQxZ)

And the budget is $4T or so, where's the other $3.5T coming from?

And yes, I know it's not dollar for dollar.

Unworkable

88 It would require a Constitutional Amendment, because a national sales tax is currently unconstitutional. To wit:

Article I, Section 9: No tax or duty shall be laid on Articles exported from any State.

Doubtful that even our most creative judicial activists can parse that.  

89 How is this accomplished? The only way to avoid buying anything is to steal it. Posted by: Sgt. York at August 01, 2011 03:20 PM (QHzLG) Barter: I mow your lawn for a month in return for some work on my house. I fix your car in return for a ride to (wherever).

90 I'l have to start charging sales tax on dese TV's that I found in the back of my truck. Oh, and dose smokes, too.

91

"Yup... and eventually all that cash has to surface at some point in order to change hands legitimately. It's used to buy stuff, which gets taxed."

But you use it for services, not goods, which are real hard to pin down.   Or you misreport the price to get around the tax.  You know, officially I buy the car for $2K and I slip another $5k into your pocket at the time - you only pay taxes on what you report.

Not that I've ever done that to lower the auto sales tax - oh, no, perish the thought.

92
A national sales tax means we would never see another tax hike again.
Posted by: Sgt. York


The California sales tax started at 2.5% in 1933.  By this year, the rate for someone in LA, with combined state, country city and special assessment sales taxes, hit about 10%

People vote in California, the sales tax still went way up. Why would that be any different at the national level?

93 In 2008 the dems raised the sales tax by 20-fucking-percent with barely a peep from voters. You think they would have been so passive if it was income tax that went up 20%?

94 The one draw back that I do have is that it does hit low incomes perhaps too hard, but I would be a lot more supportive of an EITC if there was a VAT (with no other income taxes, other than FICA, SS withholdings, etc.).

Why not make sure the prime consumers of government services get to pay for them a bit? You'd find a large number of new limited government voters almost overnight.

95 Kill the income tax, and put a hard cap on SS & medicare taxes in exchange for a sales tax... I could be interested.

Also need guarantees that those who choose to minimize their taxes by growing & raising their own foodstuffs are not penalized.

96 "Exactly. It's also inherently progressive, but in a way that is natural rather than determined by politicians."

Uh OK, I think the word your looking for is "regressive."  And that is not necessarily a terrible thing, but good luck selling it without carve outs for "hard-working American families AKA welfare moochs" and different rates on different classes of goods, said rates set based on who has the better lobbyists.

97 Might I suggest the Fair Tax?  Before anyone jumps on me with their criticism of the Fair Tax (as explained in the book The Fair Tax, by John Linder and Neal Boortz), my question to you is "have you read the book?"  If you haven't, and your only source for what you know about it is what someone told you or you heard, or read it on the internet, then your criticism will be dismissed out of hat.  You can't discuss it legitimately unless you read the book.

98 "How is this accomplished? The only way to avoid buying anything is to steal it.

2 methods. First, barter/exchange. Second, the "all cash" sale where small sellers sell to buyers for all cash."

All of which is beneficial to the economy, and which allows micro-businesses to avoid being taxed. Only the tiniest of businesses would every get away with not paying the sales taxes. This is not a detriment. I'm only talking about large sellers like E-Bay and Amazon (and yes, I would include internet sales, since replacing the income tax would free up a lot more income).

99

Ace - a National Sales Tax?

This is the most bat-shit crazy idea to ever leave your cranium.

First - they have this kind of tax in Europe - and it hasn't produced better governments. The idiots don't "see" the tax - they just think a fucking bottle of coke just naturally cost $12.00 or ... whatever the euro equivalent of that is. "God Damn Coca Cola" - that's what they say. They don't blame their governments for inflating the price of goods.

Second - why not just pass a flat tax or something if you really want people to have skin in the game?

Third - "Skin in the Game" is highly overrated - and sometimes causes painful issues, sores, and oozing. Like the time me and my submarine buddies ran roughshod through an Olongapo brothel in 1984 ... "bareback" ... yeah - we had lots of "skin in the game" ... and actually - it was a lot of "games" ... but ... we all ended up on anti-biotics within a few weeks. Sad.

100 Flat tax with no deductions at all. Everyone pays the same rate of 10%. If it's good enough for the church, it's good enough for the government

101 I would love to have more company in here.

102 >>>I like the idea, but as others have said not in the sense that I want to add revenue to uncle sam, only to remove loopholes and broaden the base and get every one into the game. The "loopholes" being eyed for elimination are the home mortgage interest deduction and charitable deductions (and state tax deduction). Those closed "loopholes" will hit some of the 49% not paying income taxes now, but not a majority of them. I'm not sure why we'd want to end the charitable deduction, either.

103 *** in Maryland ***

104
Barter: I mow your lawn for a month in return for some work on my house. I fix your car in return for a ride to (wherever).

Posted by: joncelli at August 01, 2011 03:24 PM (RD7QR)

Doesn't that equally apply to income taxes?

105 I am just leery of adding another layer of complexity to this Rube Goldberg machine we have now.
Posted by: A Balrog of Morgoth

Huh? How is a POS tax complex? A % on all goods and services seems to be a pretty simple calculation. The only loophole or layer of complexity would be the inevitable tax 'pre-bate' or an amount of money refunded at the beginning of the year to cover the tax on a small amount basic goods and services.

The idea is to institute a tax in place of the current one, so you're not adding anything.

106 Skin in the game?  fuggedaboutit.. ain't gonna happen.  The libtards will scream bloody murder about how regressive it is.. and all the people who now pay no income taxes will get an rebate/deduction or something to offset it.

And no one has mentioned black market goods to escape taxes.  Tens of billions of dollar worth of goods are bought in states where the sales taxes are lower than in the state people reside in currently.  What makes you think the creative American mind won't do the same for a national sales tax?

We need tax reform.. income taxes of 3 or 4 rates.. no deductions.. everyone pays something except for those in the official poverty category.

Eliminate EITC.  That is the biggest scam ever foisted on the American taxpayer and is rife with fraud.  It is welfare by mail through the IRS.. with no one ever evaluating the household for eligibility.  That's how you get more people with skin in the game.

107 104 Flat tax with no deductions at all. Everyone pays the same rate of 10%. If it's good enough for the church, it's good enough for the government

Posted by: wing at August 01, 2011 03:26 PM (p55Wp)

Again, 10% of everything doesn't cover our bills.

108 Is energy (electricity, oil, coal) going to be counted as a sale? 

Seems even worse than a "simple" carbon tax.

109 Article I, Section 9: No tax or duty shall be laid on Articles exported from any State.

Doubtful that even our most creative judicial activists can parse that.  

Posted by: stc at August 01, 2011 03:23 PM (7AUIk)

But the Commerce Clause penumbra clearly supercedes this!

110 Laffer's plan of a ~13% flat tax with a $5000 annual rebate is the best. Add that the rebate decreases in percentage by whatever percent the deficit is or increases by whatever any surplus is (LOL), and you turn everybody in the country into deficit hawks.

111 The fact that voters hate paying income tax is a feature, not a bug.

112 LOL, Rep Maxine Waters is talking...and reality has been temporarily suspended for two minutes!

113 Flat tax with no deductions at all. Everyone pays the same rate of 10%. If it's good enough for the church, it's good enough for the government

Posted by: wing at August 01, 2011 03:26 PM (p55Wp)

It would certainly be a fairer system.

I still don't get the morality of the idea that if you work overtime, not only do you pay more in absolute taxes, but probably a higher rate also.

114 A fair point above from the people who say "just a penny more".  Every damn election, I have to vote on some give away in which the commercial says "we can have this and it is only .o2 cents for each dollar spent".  Pretty quick and enough of these and a not insignificant part of that dollar is taken in every transaction.  Why do you think states hate people buying over the internet?

115 100% income tax would be the same an infinite sales tax.

The three liberals that read this site all just climaxed.

116 106 Statists hate private charity.

117 And I don't think seniors buy as much stuff, right? I mean they don't need to. Jesus *I* don't really need to. I would imagine food, health-related items and clothing would be exempt. That could be just in my mind (that's how PA does it with our sales tax)

118 Lets start with Withholding, then after the smoke from the tax revolt clears we can fix the tax system.

119 We need more taxpayers, not less or more taxes.

120 "A national sales tax means we would never see another tax hike again.
Posted by: Sgt. York


The California sales tax started at 2.5% in 1933.  By this year, the rate for someone in LA, with combined state, country city and special assessment sales taxes, hit about 10%

People vote in California, the sales tax still went way up. Why would that be any different at the national level?"




You're talking about a 7 percent increase over an 80 year period. That's not too shabby.

So let me revise my statement. You would never see a significant tax increase ever again. Your example is proof that the politicians were too afraid to exact any significant tax hikes for 80 plus years!

121

Even if you don't "pay" taxes, things are lost to you via lowered standard of living: lost jobs, higher costs, lower returns on investment, higher rent, etc.  Big goverenment is the cause of this and the only way people can be made to care is to get the cost of big government right out where they can see it.  The Fairtax is a means of doing that.  I don't expect to ever see it as it requires Washington give up too much power.

Alternatively, one might end witholding.  If you had to pay taxes the way one has to pay the cable bill - the Washington bill, I wonder how long it would be before people were calling to cancel the Washington subscripton.

122 "Nope, no thanks.  Hits the elderly/fixed income crowd.  The hell with paying the government to eat, to stay warm/cool, or to have shelter."

Easy to correct. People on fixed incomes spend most of their money on food and rent. In most states these are already exempt from sales tax.

123 @101 Well, if you are dismissing criticism out of hand from those who have not read the book, may I point out that this is not a book club.

Since you have read the book, maybe you could argue your case, and we can agree or disagree.  Or I could just dismiss you out of hand, as you deserve to be for trying to use that cheap debating trick here.

124 "We need more taxpayers, not less or more taxes."

National sales tax replacing the income tax would provide precisely that.

125

But you use it for services, not goods, which are real hard to pin down.  

Posted by: Tom Servo at August 01, 2011 03:24 PM

Actually, services are subject to gross receipts taxes in some places, such as New Mexico, where I used to live.  I'm sure they are in other places, as well.  It was a major pain in the ass when we did trucking services in Colorado, which taxes only goods, and water disposal in NM, requiring two separate bills for each job.

126 Don't forget four things with respect to a 3% sales tax ...

a) Just like the income tax that would never go above a few percent and would only apply to the top 1% of incomes, as soon as the spenders in Washington get this money it will be gone and the rate will rapidly increase.

b) it will already be on top of the already confiscatory rates that productive people are charged.  If you are already paying 30% of your income to the taxman, your rate just went up 10%

c) This sales tax will end up being applied at every step, every sale.  Want to buy a new car -- 3% on the cost of the car, which includes 3% sales tax on the windows, electronics, steel, etc; each of which includes 3% on the raw materials used to make the windows, electronics, steel etc; and 3% on their raw materials ad infinitum

d) The Dems and their Rino allies will put increases in EITC and other welfare payments to cover any cost that their parasite constituents may pay.


A national sales tax has all of the disadvantages of the Fair Tax with non of the benefits

127

Ace,

The plan as you describe it - having both a federal income tax AND a federal sales tax, does not solve the problem of those with no skin in the game.  The people not paying federal income tax would still not be paying federal income taxes.  Thus, the calls to "tax the rich" (i.e., the 50% paying federal income taxes) would continue unabated.

The only way a sales tax would end 50% voting to raise taxes on the other 50% would be to get rid of the income tax and replace with a national sales tax.

128

I would imagine food, health-related items and clothing would be exempt. That could be just in my mind (that's how PA does it with our sales tax)

Under the Fair Tax plan banied about the last few years, I think these items would be exempt from the National Sales Tax.

129 "Uh OK, I think the word your looking for is "regressive.""

No, insofar is rich people spend more money than the poor, it would be progressive, not regressive.

130 A national sales tax means we would never see another tax hike again.

The hell we wouldn't.  They'd just make the tax so that we never actually saw it.  We already don't see federal gasoline taxes anywhere on our receipts; they've already been factored into the advertised price, which is part of the reason the libs have been so successful at demonizing the oil companies.  They'd probably lick their lips at the prospect of being able to demagogue all industry and manufacturing this way.

131

The Fair Tax Plan is the only way to institute a national sales tax the right way.

 

It eliminates income tax, social security tax and all other federal taxes.  That means the only logical place on earth to base a company is the U.S.  It also means that the only place on earth to keep money, regardless of where youÂ’re from is the U.S.

 

Want full employment?  The Fair Tax is the way to do it.

132
No real concern troll could be that half-assed.

Everyone's a critic.

133

It would be a better, more transparent system. Oh, and by the way, both political parties have done everything in their power to be less transparent in the past, oh let's say 40 years.

So no go.

134 In principle I would favor a sales tax over the income tax, or over part of it.

The "they'll increase the rate" argument is stronger than you seem to be acknowledging Ace.  If I remember right, 3% was the rate when the income tax was passed, the rate that was sold to a skeptical public to get them to go along, and it just shot up thereafter.  If 3% max was hard-coded into the amendment, and if a significant portion of the income tax was offset, I would certainly take that deal.  But it's not practically on the table by the time you get this past the Democrats and moderate Republicans.  They'll see your offer and raise you current income tax plus new sales tax plus sales tax rate increase as soon as the ink is dry.  And they'll be able to say in their friendly media that even fiscal conservatives have already conceded the point that we need a sales tax to balance the budget.  You'll lose tea partiers and some independents over that unless you secure certain and draconian spending cuts first - a pretty big hypothetical at this point.

This parallels my objection to the Fair Tax also - advocates boast about the fair tax being revenue neutral, as indeed it would have to be to get enacted.  From a negotiating standpoint though, you're spending your anti-tax capital on a new tax that you're allowing upfront to be as large, intrusive and have as many exemptions as the income tax you're fed up with.  I'd rather spend that political capital on a straight reduction in taxation and spending.

As far as "they're already raising taxes, they're eliminating reductions" goes, fine.  I'm okay with eliminating deductions, even big popular middle-class ones like mortgages, if we get enough of a rate reduction in return.  Granted the people now pushing deductions eliminated don't want a rate reduction, that's all the more reason for our side to push a rate reduction now to establish a baseline for an actually useful compromise.

135

Posted by: Vic at August 01, 2011 03:18 PM (M9Ie6)

 

I'm with you, Vic.  A flat tax is the only so-called "fair" tax.  Everyone plays, everyone pays.  With limits on the percentage, included in a new fed tax amendment, it's the only winner I've seen to get control of our fed government. 

 But that in itself is the biggest problem.  The pols know that it would end their stranglehold on us.  The IRS is the base of their power.  It'll never happen.  This country is going to burn.

136

There are two basic problems with the idea of a national sales tax:

1) It will end up being an adjunct to an income tax and will cost us all much, much more - together.  This is the most obvious and worst part about the idea. There is no way to guard against this problem, so, instead, the idea of a federal sales tax is better dead.

2) It will put the federal government into direct competition with the states over one of the States' main sources of revenue.  Because of this competition, States will branch out further in their own taxation to make up for the loss and to tax things previously untaxed (or "under-taxed" as per the State's thinking).

137 At current spending levels, you're looking north of 20% tax just to get close to break even.

138 One benefit to a Fair Tax or national sales tax that is never mentioned is on immigration. Illegals will pay I to the system just like the drug dealers and other black market people. The Fair Tax with its prebate actually makes the illegals pay more than legals. This creates an economic disincentive for the illegals, which will work better the a stupid fence

139 Another large boon for the national sales tax is that it would get the IRS out of our damned business. Huge boost for privacy and liberty.

On that note, I'd take a flat/fair/whatever tax over this regime, any day.

140 A fair, flat tax would be everyone pays $25K, period - those who can't pay, can't vote.  Exceptions for disabled veterans, active duty military, and reporters.  (The reporters thing is to get the fourth estate/fifth column behind it.)

141 I'll weigh in on this, just right after everyone else has had their say.

142 Eat the Rich!!

143 Hmm.

Let's see.

IRS

Accountants

Accounting schools

Tax Lawyers

Not that I have any problem with a "Fair" or flat tax, but there will be one helluva lot of people fighting against any streamlining of the cluster-fuck system we presently tolerate.

Personally, I say fuck 'em. Bottom-feeders all.

144 FWIW, with a state sales tax, Texas gets along fine without any income tax.

145
This is the beauty of the carbon tax.

It's a fair tax system and it saves the planet.

*Yes, giving money to Obama/Pelosi/Reid somehow changes the weather and saves the planet. Trust me.

146 Why don't we just tax new babies. The liberals would love that. And it might stop them from having kids, so it's a win-win for us?

147 Sales taxes are highly regressive. Rather than being flat, poorer people are hit much harder by a sales tax because a larger share of their income is expended whereas those more well off can afford to save. A flatter scheme would be preferable if you want more people to have "skin in the game" and not break out the pitchforks. Sales taxes also place a burden on the retailer to collect and report and keep records, it may not be huge, but it still hurts businesses and commercial growth. Having national sales and income taxes means more government expansion and increased inefficiency of tax collection. Changes to the tax code would ideally be simplifications that could also involve elimination of large parts of government and private accounting that is entirely a waste of time and money for everyone involved.

148 Eat the Rich!! No salt, though.

149 Easy to correct. People on fixed incomes spend most of their money on food and rent. In most states these are already exempt from sales tax.

Posted by: Jason at August 01, 2011 03:29 PM (UlYs4)

Don't want another classed item, it'll just lead right back to the class warfare pandering we have now.  Still, no thanks.  Flat tax it.

150 FWIW, with a state sales tax, Texas gets along fine without any income tax.

Posted by: Phelps at August 01, 2011 03:33 PM (cWtxJ)

And what do you think Texas would have to do if the feral government starts taking over some of that sales tax action as its main source of revenue?

151 "One benefit to a Fair Tax or national sales tax that is never mentioned is on immigration. Illegals will pay I to the system just like the drug dealers and other black market people."

Great point. This in itself is enough of a justification IMO.

I get that many people here are concerned that this will simply be a new tax on top of the income tax, at that's precisely why voters in my home state (Oregon) have consistently rejected a sales tax. But ultimately its benefits so far outweigh the costs, it seems worthwhile.

152
What's this?

M80 is reporting that things might be getting rowdy at the Capitol...

153 Huh? How is a POS tax complex?

Bwaaahahhahahaha, let us show you.

154 Wait, wait. So just because the constitution talks about the ability to tax and just because it doesn't specifically forbid Congress from implementing a sales tax, you're saying they can't do it without an ammendment? Who would have thought...

155 For those claiming that the sales tax would be a separate 'line item' that could be highlighted, remember that Washington has forbidden pump-side displays of the break-down showing that they make a much bigger 'profit' on gasoline than Exxon-Mobil et al, do. 

Also remember that the phone & electric companies are told what they may and may not itemize on their bills.

Do you really think that the thieves in Washington wouldn't prevent retailers from highlighting the additional tax?

156 152 Eat the Rich!!

No salt, though.

Posted by: Nanny Bloomberg at August 01, 2011 03:33 PM (AZGON)

Eat the bitch!

 

 

157

The entire American Revolution was fomented around a simple "Tea Tax".

I'm wondering how long the public has to be tortured with the ideas that taxes are ineveitable and that they have no input into the process before they remember that Revolution, (even if it only amounts to throwing incumbants out and starting over) is an option?

158 The problem is that people see sales taxes as by-and-large working as designed. But they aren't.

The bulk of physical sales transactions are done locally by organized entities who keep records, but this is a relatively new phenomenon in human history. And it's one that is already on the cusp of change. Amazon Prime is hitting the "locally" part; a national sales tax would clobber the "organized record-keeping" part; a shift in value from manifestation to information is taking whacks at the "physical" part.

It's arguable that all sales taxes will soon go the way of the dodo. Already, in California, there's a ballot measure to exclude internet sales from state reporting requirements.

159 "A fair, flat tax would be everyone pays $25K, period - those who can't pay, can't vote.  Exceptions for disabled veterans, active duty military, and reporters.  (The reporters thing is to get the fourth estate/fifth column behind it.)"

Good idea. Also, we should start requiring people to stay on their land, work it, and give 50% of their profits to their lord.

160

This idea is good, and I wish I thought it could go through congress.

Check the link to the Fair Tax:  http://www.fairtax.org

Of course, the sales tax approach has its drawbacks, many small business operations ( and some large ones ) have Sales Tax Exemption Certificates, which means they pay no sales tax on certain purchases. These are only supposed to apply to items purchased for resale, but abuse is rampant. You can go to Sams Club and purchase just about anything and pay no sales tax. Often these purchases are diverted for personal use, the chances of getting caught are almost nil with a bit of creative accounting. Happens every day.

161 M80 is reporting that things might be getting rowdy at the Capitol... linky? she always has good stuff

162

For people saying a national sales tax is regressive, it is.

 

The Fair Tax has a “prebate” that pays every citizen a monthly amount equal to the tax on sales at twice the poverty rate.  That gives a family of four about $530 per month automatically deposited.

 

People who donÂ’t make more than twice the poverty rate donÂ’t lose.

163
no link, that's all she said in the other thread

in the gallery -- not the members...

164
WI state-house tactics?

165

the fair tax, The Fair Tax, THE FAIR TAX!!!!!!

 

Problems solved.

166 As a starting point, I do not believe it is politically possible to raise tax rates on those not paying taxes right now (aka "the poor," even though most are not really poor as we've historically defined it).

I don't give a damn if they are only paying $40 a month in income taxes, they have an obligation to contribute to their own care and feeding. The taxpaying half of this country are damned tired of footing the entire effing bill.

$40 a month from every non-taxpaying individual would add up quickly, both in terms of tax revenue and in good will. AND, in making them aware of the implications of tax increases on the rest of us.

167 Boehner speaking now.

168 Income Tax + Sales Tax = Really bad Repeal the Income tax and we can talk.

169 OT: I suspect these people don't work....various tweets:

Protesters chanting "Boehner get off of it. It's time to tax corporate profits." One protester injured.

Protesters chanting "Boehner, Boehner, get a clue, it's about revenue."

US Capitol Police arrest 22 in House chamber. Charged with disrupting Congress.

170 Before anyone jumps on me with their criticism of the Fair Tax (as explained in the book The Fair Tax, by John Linder and Neal Boortz), my question to you is "have you read the book?".

I have read the book and it is worthless. 99% of it just repeats explanations of why the current system is bad.  The only part of the book that is WAS is the Q&A at the end and even that doesn't answer enough.

You have to go to a LOT of things to actually find out how it would work. First to the actual implementing legislation which is written in legaleze. Then to the fair tax web site and down load their "study papers.

The you will find out all is not as advertised. '

As I said in the previous post, it is a literal POS for nearly everyone in the country and it makes a damn lot of assumptions as to how people will benefit. At best those assumptions are the same shit that congress does:

1. We repeal SS with-holding
2. Magic shit happens
3. Workers get a raise equal to the with-holding
4. More magic shit happens
5. Prices go down on all products

The one thing they did actually admit, people already retired and living on their savings are screwed with no recourse.

171 First paragraph italics

172 Ace

The biggest problem is that they can indeed increase it at will, and will use it as another way to impose higher taxes on everyone. Today's 3% will be tomorrows %6, and the next days %15. These democrats cannot be trusted with new taxes, PERIOD.

173 As a business owner I'm not being paid by the government to be their tax collector. Why should I have to act as one?

174
noopoost

175 As a tax lawyer, I hate to shatter your illusion of us bottom feeders, but personal income taxes really isn't that big of a cut of the business. In fact, doing sales tax returns for smaller businesses generates about as much business as personal income taxes.

Then you are clearly not one of the bottom-feeders to whom I refer. I should have been more specific but what I meant with the downward flow was all that the IRS agency itself creates. How many people are employed in that agency?

176

Again, 10% of everything doesn't cover our bills.

Posted by: ronno at August 01, 2011 03:27 PM (nQR0p)

 

It most certainly would if we drastically cut the government, you know, back to what the US Constitution allows it to pay for.  Entitlements have to eventually be phased out, period.  Let the states give out entitlements if they're so inclined. 

Trying to keep the status quo or anywhere near it is going to kill this nation.  What am I saying?  It's already dying.

177
Easy to correct. People on fixed incomes spend most of their money on food and rent. In most states these are already exempt from sales tax.

Posted by: Jason at August 01, 2011 03:29 PM (UlYs4)

Yeah, so we are right back to 51% or something like that not having skin in the game.  Which a national sales tax is supposed to fix, after we exempt a bunch of stuff and a bunch of people.  All that effort just to run in place.

178 US Capitol Police arrest 22 in House chamber. Charged with disrupting Congress.

We need to restore beatings with rubber hoses for assholes like that. Instead by this time tomorrow all will be back on the street, no charges and free as a bird.

179 I didn't read the thread, but in case someone hasn't already said it, a sales tax is an excise tax. In Article I, excise taxes are specifically mentioned as being a type of tax the Congress can levy. As far as the Fair Tax goes, I cannot support it until it is amended to include language that forbids future income taxes in addition to their repeal of the 16th amendment. If we were to straight repeal the 16th wages could still be taxes but it would have to be basically uniform. Indirect taxes on income, so capital gains and such wouldn't be eligible for taxation in that situation, but direct taxes such as on wages would. Any Fair Tax would also have to can the "prebate" nonsense. If you want to exempt "essentials" that's fine with me. However you have to pick what you want to exampt and make it exempt. Food staples, water, power, and maybe gas should flat out be exempt if that's the intention. This garbage about sending out a check to everyone for some arbitrary amount to cover the basics doesn't alleviate the problem of people being dependent on their government checks. It exacerbates it, IMO. IF those two things were fixed, I'd be out in the streets getting everyone I know to sign up for the Fair Tax. Until then, I'm in the flat tax camp.

180 Protesters chanting "Boehner get off of it. It's time to tax corporate profits." One protester injured. Protesters chanting "Boehner, Boehner, get a clue, it's about revenue." One of these days one of these "protestors" (actually professional agitators) is going to pull a gun. Will the leftist asswipes who let them in be held responsible?

181

I'm not sure it would in the end bring everyone onto the tax rolls. A lot of these proposals contain 'deductions' up to a certain amount in the form of a check sent to everyone to reimburse them for the money taxes on minimal necessities.
Even as someone on the cusp of paying/not-paying many years, I don't like that.

Keep the exceptions out and the spending reasonable and the burden won't be too onerous for anyone. But at this point it's all rearranging deck chairs and all that.

182

The reason I am thinking about a national sales tax is due to a point many conservatives are making: With 51% of the population paying no federal income tax whatsoever, they have no "skin in the game."

But with all sorts of other federal taxes -- mainly employment taxes -- they do have an interest. Just because someone doesn't write a check to United States Treasury in April doesn't mean they're not paying federal taxes. Besides, withholdings are taxes; they're just paid on a different timetable.

The trouble with a national sales tax is the same problem with entitlements: Retired people will be paying them. It seems wrong to ask people to pay high income taxes while they work, only to lower the income tax rate and raise consupmtion taxes afte rthey retire. Then again, maybe that's a good way to hide these taxes. (Either way, every oldster I've mentioned this too is oblivious to this. They're so wrapped up in their political "team" that they've blinded themselves to how it affects them.)

What are you trying to do, Ace? If you see our society as one of redistribution and are trying to get back some money from the beneficiaries of this redistribution, then yeah, a national sales tax is a good way to do this.

183 What Marcus and Vic said. 

184 Another classic take is: "why have taxes at all? Why not just have the Feds print whatever money they need to spend. No reporting, no forms, no IRS."

185 144 A fair, flat tax would be everyone pays $25K, period - those who can't pay, can't vote.  Exceptions for disabled veterans, active duty military, and reporters.  (The reporters thing is to get the fourth estate/fifth column behind it.)
Posted by: Jean at August 01, 2011 03:32 PM (7P7Ij)

That's completely insane.

186
2. it gets way to complicated, because there will be calls to rebate for the poor or even pre-bates.

No. You wouldn't tax groceries. And just guessin' here, but I bet manufacturers and retailers would offer lots of rebates and steep discounts on family staples like disposable diapers and detergent and t-paper.

187 "Yeah, so we are right back to 51% or something like that not having skin in the game.  Which a national sales tax is supposed to fix, after we exempt a bunch of stuff and a bunch of people.  All that effort just to run in place."

No because everyone spends money on some stuff other than food or rent.

188 Where you're going wrong is giving the feds even more of our money.

189 I didn't read the thread, but in case someone hasn't already said it, a sales tax is an excise tax. In Article I, excise taxes are specifically mentioned as being a type of tax the Congress can levy.

An excise tax is a sales tax on a particular product or service, so no, a general sales tax is not an allowed excise tax.

190 We also need to raise the gas tax (while reducing other taxes more). If we raise the gas tax, the amount of oil Americans will demand at any given pre-tax world price will go down.

I can fairly assume you're one of those who assumes that the goods you buy in the store are made by elves in the back, not transported through the supply chain several times over.

Part of those high grocery prices you're paying now is due to higher fuel costs

191 182

Again, 10% of everything doesn't cover our bills.

Posted by: ronno at August 01, 2011 03:27 PM (nQR0p)

 

It most certainly would if we drastically cut the government, you know, back to what the US Constitution allows it to pay for.  Entitlements have to eventually be phased out, period.  Let the states give out entitlements if they're so inclined. 

Trying to keep the status quo or anywhere near it is going to kill this nation.  What am I saying?  It's already dying.

Posted by: Soona at August 01, 2011 03:42 PM (l5xDa)

I'm down with dat!

192

Vic,

 

The group best able to handle any switch in taxes are the retired people – thatÂ’s where most of the money is. 

 

Yes, magic shit happens when you stop robbing the public.  When you eliminate non-productive costs, prices go down.  When people who have never been part of the government revenue stream (illegal immigrants, criminals, tourists, the entire underground economy) start paying taxes, the costs go down for the rest of us.

 

As I explained in a previous comment, magic shit happens when businesses and capital find a place they can locate without taxes.  That magic is called jobs.

193
If you let the Federales tax sales, then sales tax in L.A. goes from 10% to God knows what.
Posted by: Meiczyslaw at August 01, 2011 03:03 PM

So L.A. gets depopulated, or a bunch of its little villages break off and incorporate. So what? If the Angelenos want to do that to themselves, I ain't gonna stop them.

194 Protesters chanting "Boehner get off of it. It's time to tax corporate profits." One protester injured.

Protesters chanting "Boehner, Boehner, get a clue, it's about revenue."

US Capitol Police arrest 22 in House chamber. Charged with disrupting Congress.

Damn tea partiers.

195 142 One benefit to a Fair Tax or national sales tax that is never mentioned is on immigration. Illegals will pay I to the system just like the drug dealers and other black market people.
Posted by: MacRadDoc at August 01, 2011 03:31 PM

Yeh, we thought that too. We'd have a megasurplus now if it weren't for that pesky Prop 13 that greedy homeowners just won't let go of

196

No because everyone spends money on some stuff other than food or rent.

There are two things that don't get charged sales tax -- at least not in New York State -- yet.

197 >>The "loopholes" being eyed for elimination are the home mortgage interest deduction and charitable deductions (and state tax deduction). Actually that's not true. Boles Simpson lowered the cap to $500,000 from $1M and did away with mortgage deductions on second homes and lowered the amount of charitable deductions but did not eliminated it. I don't have all the Ryan plan details but I doubt it was materially different. I think thats where we are headed anyway in the Super Duper Commission. Some modification of the tax plan that lowers rates, broadens the base and removes certain loopholes. Don't forget, the Boehner - Obama Grand Bargain had that in it and it looked like it was going to happen until Obama decided to layer on $400 billion in extra taxes. The Grand Bargain plan was estimated to raise $800 billion in tax revenue over 10 years.

198 Seems it's OK for Ace to think outside the box, as long as he doesn't stray from the circle that surrounds the box.

199 195 I didn't read the thread, but in case someone hasn't already said it, a sales tax is an excise tax. In Article I, excise taxes are specifically mentioned as being a type of tax the Congress can levy. An excise tax is a sales tax on a particular product or service, so no, a general sales tax is not an allowed excise tax. Posted by: toby928™ at August 01, 2011 03:47 PM (GTbGH) Tell that to the Fair Tax people. When I asked about it, they insisted a national sales tax was an excise tax and covered under Article I.

200

How many of you keep track of how much money you spend on sales tax?  Not very many... most people just estimate it because it is so difficult to keep track of.

But the income tax? That is right there on my 1040.  And it makes my blood boil.

Maybe someone can make an App for that...

201

And the budget is $4T or so, where's the other $3.5T coming from?

And yes, I know it's not dollar for dollar.

Unworkable

Posted by: ronno

The 2010 budget is $3.456 trillion, but government revenue is $2.2 trillion. Income taxes are about $900 billion. Income taxes not 100% total tax revenue going to the Fed.

Consumers are said to be 70% of the economy so 70% of $14 trillion GDP is $9.8 trillion. So you'd need roughly 9.25% sales tax to cover the same amount of income taxes.

Where's the unworkable part?

202 The group best able to handle any switch in taxes are the retired people – that’s where most of the money is.

You believe too many myths from the media.

203 Protesters chanting "Boehner, Boehner, get a clue, it's about revenue."

Posted by: Tami at August 01, 2011 03:41 PM

What, not one 60s leftover "hey hey, ho ho" rhyming chant? They must have hired an image consultant

204 A consumption tax would be the fairest tax there is.  If this would REPLACE most income tax, then it would be great.  There is a problem though.. The local sales tax here in LA county has been 10.5% until it was reduced to 10 recently.  That is insane. INSANE.  Say a car you want is 30k msrp.  Well thats about $3,150 to the black hole of gov't.  Drive 15 miles to Ventura county and save nearly $1000 or forget it all together.

People buying cars would simply go to a different county and save thousands or put off buying, and therefore tax revenue went down.  Simple right? well not so with straightjacket democrats.

The thing is, if there was a nationwide salestax instead of income, people would start buying less because they would be very aware just how much the gov't was stealing from them.  The economy would suffer terribly.  The only way this would work would be a VAT tax that would be invisible on a receipt.  But everyone knows the gov't wouldn't replace our taxes with a VAT, they'd add to it.

I think its a good idea, but would be disastrous in practice.

We already pay much more than any developed country.  Much more.  Libs like to say we're paying less, and I wonder what mental hospital they learned that from.



OT but great story about Greece:
The spoiled brats in Greece make it a national pass time to evade the tax man.  200 people in Athens paid the pool/luxury tax before this, and the gov't dolts used google earth to find there are 20,000+ pools in the city alone.  I'd bet the farm all those people are libs or communists and scream for higher taxes, while avoiding their own.

Greece is so fucked its beyond belief.  Even TV anchors by law are required to retire at 51 and they get 90% pension for rest of their life.  They wonder how they're having money problems?  Really, most in the country think the gov't is 'stealing' money and that's the reason they're having this problem.  They want a communist revolution. They'll be kicked from the EU and be much poorer.  Those pensions and retirement at 51 will be a fond memory when they are getting zero pension and working at mcdonalds at 85.  Culture Rot

I hope to GOD our culture never gets to that point.  We have libs to thank if it does

205 You'd have to completely eliminate income tax.  Otherwise, it'd just be another tax to add to all the others.

206 These comments aren't as amusing as I was led to believe. Maybe I'll read the post instead.

207 You'd better make sure to compensate me for all of my after-tax savings I have that you now want to tax AGAIN under this plan.

208 But what about internet purchases? You think Uncle Putt is gong to let those slide or create a whole new entity to collect the eTax?

209 The 2010 budget is $3.456 trillion, but government revenue is $2.2 trillion. Income taxes are about $900 billion. Income taxes not 100% total tax revenue going to the Fed.

Consumers are said to be 70% of the economy so 70% of $14 trillion GDP is $9.8 trillion. So you'd need roughly 9.25% sales tax to cover the same amount of income taxes.

Where's the unworkable part?
Posted by: weft cut-loop at August 01, 2011 03:53 PM

You make the same fatal assumptions that Keynesians and other Marxists make, that production or consumption will still continue at the old rate even with disincentives to do so now existing.

Paul Krugman would like to subscribe to your newsletter though

210 I don't think you would get enough money from a straight sales tax to replace the income tax and I SURE don't want a sales tax in addition to the income tax. Also, there would be ENDLESS arguments about what is excluded from the sales tax. "You can't tax food!" Is candy food? What about a power bar? No no no no no. Stick with the income tax. Lower rates, less deductions. A plain old FLAT TAX would do nicely. No deductions - that would get everybody in the game. Ref the mortgage deduction. Phase it out. Slowly. 20-30 years. That way you don't have a price crash.

211

One factor that I see as a strong plus for a national sales tax is the restoration of personal privacy.  Right now, it is accepted that the feds, through the IRS, have the right to give every law-abiding citizen a financial proctological exam on a whim.  You tell them how much you made, what you spent it on, who you support financially, and what you own.  I can't imagine that the Founders would ever have conceived that the federal government would arrogate this right to itself or that the citizenry would ever stand still for it.  But they do.

IMO, unless there is probable cause to believe that you have broken the law, the privacy of your finances should be absolutely immune from government inquiry.  Replacing the income tax with a federal sales tax would end the right of the government to examine your personal affairs without restriction.

I'm not totally sold on the national income tax idea but to me (who has had more than my fair share of imperious demands for information from the IRS), this is one of the strongest arguments in favor of it.

212

People really need to read the Fair Tax Plan.

 

The beauty of it is that all new products and services at retail are taxed – no exceptions.  Want a new car?  Fuck you, pay the tax.  Want a new house?  Fuck you, pay the tax. 

 

This is done because once you start exempting something, pretty soon everything is exempt.  ThatÂ’s why God created lobbyists.  What to exempt food?  Well, by the end of a few administrations just about anything you could think of would be classified as “food”.  “Ah, yeah, thatÂ’s the ticket!  This here is food for thought, so sure it should be exempt”.

 

The prebate takes care of the progressive/regressive problem.  But it is essential that there are no exemptions on what is taxed.

213 Although I guess if a sales tax were considered an indirect tax then a national sales tax would likely be constitutionally problematic.

214 Posted by: Mallamutt, RINO President for Life at August 01, 2011 03:51 PM (OWjjx)

My apologies Mutt. Frankly, I'm just tired and cranky and pissed off about a good number of things and the tax discussion just seems to push me a little farther. I don't want individuals losing their jobs, even if those individuals are employed by the IRS. I would just love to see them employed doing something which contributes to wealth creation instead.

215

"Another good aspect of taxing consumption versus income is that it shifts the tax burden toward the old, who made out like bandits by paying into social security and medicare when taxes were low and collecting when benefits are high."

As if they had any choice in the government taking their hard-earned dollars for this life-long forced "investment" in their financial security.

Well, I have a simple solution to help spread the burden around to the 50% who don't pay any - Birth Tax.

 

 

216 Can anyone tell me when actual revenues from cigarette taxes actually met or exceeded projected revenues?

Bueller? ... Bueller? ....

217 But what about internet purchases? You think Uncle Putt is gong to let those slide or create a whole new entity to collect the eTax?

Didn't Uncle Ahnold already take care of that in Cahefornia?

I believe that's the issue that drove Amazon out.

218 You make the same fatal assumptions that Keynesians and other Marxists make, that production or consumption will still continue at the old rate even with disincentives to do so now existing. Posted by: kbdabear

And people don't adjust their behavior because of income taxes, right? That tax has no affect on fiscal decisions at all. Yep.

Physician, heal thyself.

219 "The prebate takes care of the progressive/regressive problem.  But it is essential that there are no exemptions on what is taxed." The problem with that, though is that it keeps people dependent upon their government checks. And the amount is completely arbitrary. The government has no idea what any particular family will need in food, water, etc every month so any amount they give is yet another BS government formula. And it makes the idea of getting rid of the IRS laughable. The IRS just turns into the federal sales tax collection and prebate agency. Which isn't all that different from what we've got now, frankly.

220

If you had a national sales tax, or a version of the fair tax with exemptions for food, etc., then we just go back to the same corrupt system of politicians getting paid off to carve out an exemption for an industry.  This is why you need something like the pre-bait rather than exemptions.

Ace, can I say "pre-bait" here?

221 I was going to suggest a tax on brains, but I would lose the rent I collect from those guys who guard me

222

Mandy,

 

The prebate is simply the amount of sales tax that would be collected on purchases totaling twice the (admittedly government pegged) poverty rate.  The prebate is paid to every citizen – from hobos to Bill Gates.  This gives another benefit – only legal citizens of the U.S. get the prebates, which necessitates someone establishing citizenship and a federal list of who is on it.  Great for voting.

223 208
The 2010 budget is $3.456 trillion, but government revenue is $2.2 trillion. Income taxes are about $900 billion. Income taxes not 100% total tax revenue going to the Fed.

Consumers are said to be 70% of the economy so 70% of $14 trillion GDP is $9.8 trillion. So you'd need roughly 9.25% sales tax to cover the same amount of income taxes.

Where's the unworkable part?

Posted by: weft cut-loop at August 01, 2011 03:53 PM (DEcmU)

Well, you got me there. I'm guessing the "underground" economy would explode.

224

Comrade Arthur,

There is WAY more gaming of what constitutes "income" now and what is deductible than there would be over what was taxable under a national sales tax.  And we have plenty of experience in the states to determine whether food, TP, and other necessities should be subject to the tax.

The biggest issue would be whether to tax services as well as goods.  Currently only a couple of states tax services, and the number of services that are taxed is very small.  But a huge portion of our economy is sales of services, and it would be hard on a policy basis to justify not taxing services.  This would require service providers to become tax collectors, which very few are now.  

The Realtors would probably go apeshit about this, because without the income tax there is no mortgage interest deduction that inflates housing prices (and their commissions) and taxing their services would make people less inclined to use a Realtor when selling their houses.  Imagine how hard it will be for a Realtor to get someone to pay a 6% sales commission and a 10% tax of that, when they aren't even getting a deduction for their mortgage interest anymore. 

So there will be some very big lobbying fights over this.  Personally, I would love to see the Realtors lobby take it up the ass, along with the entire industry of tax lobbyists and lawyers.

225

Years ago I was in favor of having either a national sales tax or the Flat Tax on income.  What soured me was the pervasive adverse reaction newly retired clients has upon making their first large withdrawal from their Traditional IRAs, usually made to fund their big vacation or dream car purchase.

Me:  Mr. & Mrs. Client, to buy that $45k dream car, you'll need to withdraw $52,941.18 from your IRA and put aside $7,941.18 towards the 15% tax.  (Or $60,000 withdrawal and $15, 000 in taxes if in the 25% marginal tax bracket)

Clients:  [blink, blink, swallow hard]  What?!?!?

Me:  [goes through the math]

Clients:  Holy sheep shite!!!  Never gonna do that again.

NST/FT hits a reality wall with big ticket purchases when the tax is due all at once, though the income needed to pay for said big ticket item was/will be earned over a longer period of time.

The income tax system is flawed, yes, but no less flawed than other schemes.

226 We're having a conversation about taxes?

Okay, first let's correct a misperception.

The 50% figure (gotten from the MBM so it's suspect from the get go) includes a lot of people who don't MAKE ENOUGH MONEY to have to pay taxes after their standard deductions and child deductions are subtracted.

Let me repeat that; THEY DON'T MAKE ENOUGH MONEY!!!!

Most would LOVE to have to pay taxes since they would by necessity be earning MORE MONEY.

There are those who get an earned income credit which in some case means they get a refund. Sometimes more than what they paid in in taxes.

Most of the problem with earned income credit is that people ARE CHEATING. Correcting this removes the problem.

A national sales tax WOULD BE A SNEAKY TAX because a lot of that tax would be collected on sales the public isn't part of. Such as producers buying goods from vendors. Unless this is eliminated the sales tax on those goods will be higher and TAXED MORE THAN ONCE!

The biggest problem is the changeover. After what we've seen over the last 2 weeks can you really say you're willing to trust DC to changeover to a sales tax (I'm assuming you're talking about the Fair Tax Scheme?) from the income tax without screwing us by having both in effect or rescinding the nullification of the income tax at some point but leaving the sales tax in force? Also many states piggy back on the income tax. How will that be accommodated?

And another problem is how devastating this will be to those who are truly poor or on a fixed income. There are schemes that purport to compensate for this but they seem bureaucrat heavy and full of opportunities for harm.

Me I'm for a flat tax. With a deduction of about 12,500 (that covers minimal living expenses and I do mean MINIMAL) make over that and that income is taxed.

No corporate tax, no estate tax (you've already paid), no Capital gains tax.

Let the states collect the taxes and let the Federal government collect a FEE from the states to operate. (hey I know this is neverneverland stuff but while I'm dreaming....)

It's easier to affect change at the lower level and they're a little bit more sensitive to taxpayer anger. (not much just a little.)

227

Ronno,

 

ThatÂ’s why the Fair Tax is only charges on new goods and services.  It would be next to impossible to levy a sales tax on used items, because it would be so easy to bypass or minimize it.

 

Over 80% of sales go through national chains.  ThatÂ’s a good start.  Also, it would be easy to collect the tax on internet sales regardless of where the product is coming from.

 

Trust me, the Fair Tax has been designed to work through the problems.

228 Too clever by half.

229 Um, your point #2 answered itself, what is the purpose of collecting the tax in the first place? To spend it on what? The very people whom Democrats purport to benefit are the very ones who are harmed by taxes skimming the profits off of economic activity and raising the cost of all products. profits = jobs, eat the seed corn and you have no crop next year.

230 P.S. I use caps to emphasize the words as I would if I was conversing.

Not shouting or screaming them, just emphasizing.

Yeah, I know; then I should use bold or italic but i'm lazy so I use caps.

Sorry. Does that mean I'm not banned?

231 Here's my suggestion for a constitutional amendment, so that Ace can chew through the ropes on something: My proposal for the 28th Amendment: Section 1. The Sixteenth article of amendment to this Constitution is hereby repealed, effective the first day in January after ratification of this article of amendment. Thereafter, Congress shall have no power to levy any head tax, nor any tax upon income, gain in capital, or payroll. Section 2. Any tax due to the United States by any citizen or resident pursuant to laws passed under the Sixteenth article of amendment to this Constitution shall be paid in full and shall not be forgiven under Section 1 of this article of amendment. Section 3. Congress may, at its discretion, impose a tax on sales or commerce that shall be uniformly applied in all states and territories.

232 National sales tax(with zero deductions) + eliminate income tax would be a huge win for everyone. Even better people would just stop paying the tax if it got too high. That's something we can't do with income taxes.

233 Count de Monet, exactly why we need to get rid of withholding, it denies the system its feedback mechanism. Our government needs Adam Smith's pimp hand.

234 A note to Sgt York

Criminals will figure a way around it.

People who are poor now may not have been poor before and that's where the flat panels and cars come from.

To look at some of my stuff you'd think 'he's not poor' but I am now. I just wasn't a few years ago when I bought that stuff.

They don't come and take away the stuff you already have when you become poor. (although I sold a lot of easily marketed things to get by while my income shrank.)

Oh and also some of the things the poor have were bought from criminals so that's why they have them.

Go get your sales tax from the dope dealer down the street.
He'll just laugh at you. (that's if he doesn't put a cap in your a$$)

235 A consumption tax is the fairest possible tax.

236 Politicians will just do to a sales tax what they did to an income tax: everything they can to protect the people who vote for them and target those who don't. Just look at what they do on the state level already: exempting items from sales taxes while adding greater taxes to other items. You're assuming that the sales tax will be flat and equally distributed, but it won't. It would be just a matter of time before the government hands out special "tax exemptions" to the poor.

237 Go get your sales tax from the dope dealer down the street.
He'll just laugh at you. (that's if he doesn't put a cap in your a$$)

Need to check with Al Capone on that.

238 Eliminate the income tax completely and maybe this is doable.

Otherwise no. Another layer of tax on top of what we have now and it will be time for another fundamental change in this government.

The camel has a very, very sore back. If Washington is the least bit smart, they'll stop loading the straw right fuckin now.

239 Everybody has skin in the game, to the tune of about 13% of income, AKA the Social Security tax. If they do not realize it because of how it is paid, then they will not realize how much sales tax they pay either, especially if you disguise it as a VAT.

240 There's gonna be lotsa plumbers in unmarked vans.

241 Sales tax is horrible, as it, just like income tax allows for revenues to based on a percent of something big. which means biug profits for government. And yeah, as said many times above, we will have sales and income tax. See connecticut. Approx. 15% combined. The only constitutional (and I say that in the broad sense of the word...not the structure of government) form of taxation is per capita tax. 8000 a year for everyone. If you can't afford, you submit an IRS form 433a Collection information statement to demonstrate how much you could afford to pay. But then, that is a system of taxation for limited government. And the opportunity for graft is tiny. And in a class agitated society ...hmmm..doubtful

242

Mealy,

 

That drug dealer is going to Mickey DÂ’s right after he does the sale.  Then heÂ’s going down to pick up a new Escalade at the Cadillac dealer, because he doesnÂ’t want to look bad when he goes to buy some new clothes and bling.

 

WeÂ’ll get the money through the Fair Tax Plan one way or another.  A lot more than if we rely on him filling out his 1040A properly.

243 Actually, the Federal government could do it Constitutionally. Wild though, I know. But they could levy their tax =on the state= and leave it to the state to do the collection. Hell, you wouldn't even need to worry about Federal income/sales/whatevah. It'd all be at a state level. And I suspect the blue states would empty rapidly I think that was the original plan.

244 Posted by: jwest at August 01, 2011 04:11 PM (qeYI9) But again, we're talking about people being dependent on their government checks. And not just the poor but now we're expanding it to literally everyone getting a givernment check every month. If you just exempt essentials you avoid this problem. And look, essentials isn't really that hard to define. Food staples: vegetables, fresh meats, milk, cheese. Anything else, you pay the tax. Water is essential, so plain water is exempt. Power is pretty essential so exempt that. You could make a case for gas being exempt. Everything else is non essential for survival so pay up. There's a heck of a lot left over after that. And it includes no government dependency.

245 Exactly, John J.  DC would keep all the old taxes, and add a national sales tax, too.  There would be a hundred exemptions within a year.  It's also the first step in a value added tax, which the libs have been drooling over for years.

246 And for food staples, there's already a list easily accessible to every grocery store for exemption. It's called WIC. Anything that would be covered by WIC would be exempt as necessary for survival. No government checks necessary.

247 jwest

he's got a hacked mickey d's card and he gets the escalade off the street or from one of the gang's prospects who'll wash and wax it for him. The clothes come off a truck and the bling he stole himself.

Capone got whacked for Income tax because he was on the books in some ways that they could prove and he was only one guy.

try investigating all the dope dealers in compton and see how far you get with that.

248

Mandy,

 

The money sent to each citizen under the Fair Tax Plan is a rebate.  ItÂ’s your money to begin with thatÂ’s simply being returned to you in advance.  ItÂ’s not welfare.

 

Once you open the door to exemptions, everything is exempt.

249 124 "A national sales tax means we would never see another tax hike again.
Posted by: Sgt. York

The California sales tax started at 2.5% in 1933.  By this year, the rate for someone in LA, with combined state, country city and special assessment sales taxes, hit about 10%

People vote in California, the sales tax still went way up. Why would that be any different at the national level?"
Posted by: Laurie David's Cervix

You're talking about a 7 percent increase over an 80 year period. That's not too shabby.

So let me revise my statement. You would never see a significant tax increase ever again. Your example is proof that the politicians were too afraid to exact any significant tax hikes for 80 plus years!
Posted by: Sgt. York.

Your math is wrong here. Going from a 2.5% rate to 10% is a 300% increase in the tax rate. And that is a significant increase.

250

Once you open the door to exemptions, everything is exempt.

Posted by: jwest at August 01, 2011 04:37 PM (qeYI9)

That is one of the reasons the "Fair Tax" is a piece of shit, other than the fact that it is a huge tax increase for everyone except the very poor and the very rich.

It is you who need to do some damn research.

251 Count de Monet, exactly why we need to get rid of withholding, it denies the system its feedback mechanism. Our government needs Adam Smith's pimp hand.

Posted by: Jean at August 01, 2011 04:23 PM (7P7Ij)

I hear you and agree with the sentiment.  Unfortunately, most of the great mass of citizenry do not have sufficient benjamins stored away to pay their income taxes in a lump sum.  Withholding is a most practical, though a feedback- dulling mechanism for tax collection.  The 1040 has a line item for "Total Tax" on Line 60 and "Total Payments" on Line 72. 

People should have to initial besides these two line items.

252 jwest

one of my biggest problems with the Fair Tax Scheme is this 'rebate'.

First it means that you have the IRS. (and getting bigger and more intrusive)
Second you have to file to get YOUR money. (monthly I think.)
Thirdly you have to PROVE you are poor enough to qualify.

More bureaucracy means more bs and more inefficiency.

Flat tax with ONE deduction or leave it alone.

253 Now there's an idea.

Take away withholding.

It was only supposed to be for WWII but look, here we are.

Want folks to have skin in the game; send them a bill every quarter telling them what they owe.

254 The problem with a national sales tax is that it would encourage a black market. Right now if we had a national sales tax it would be 25%! We spend 25% of our GDP on federal programs. There would be a large incentive for a black market at 25% tax. The positive side to a sakes tax is that everyone always knows what the tax rate is. On every purchase they know exactly how much tax they are paying because they have to multiply the cost by the tax rate. I buy a 100$ jacket and I give the store 125$. One alternative is the VAT but that is a sneaky tax and should not be allowed. Another alternative is a "VAT" that is collected at the manufacture stage but listed separately on the receipt. I might favor that but the problem is the same as a VAT. People just look at the price of an item as listed on the shelf.

255 You know, all this talk about how almost half of adult population doesn't pay taxes works only if you pay the nonsense that SS etc. payroll taxes are actually sort of contribution to a special trust fund. But since the excess for that fund has been used for general revenues and replaced with meaningless IOU's for the past 30 years, that's nonsense, and simply serves as a way of misusing the electorate and convincing retirees that they're "owed" something for past contributions. In reality, SS benefits are simply a part of general expenditure (as proven by the threat to stop paying them if the debt ceiling isn't raised), and so SS contributions are likely simply a tax concealed as something else (including the hidden tax in the form of matching employer "contributions"). And if you take those payroll taxes into consideration, they constitution 40% of Federal income. So, one way to look at the SS payroll taxes is that they're a form of ATM for the bottom segment of the population. It's just jiggered in a way to fool people as to what they're "paying for".

256

I don't like a national sales tax. I think a flat income tax is better.

 

257 Replace the income tax and with the exception of food and medicine tax everything else sold.
Every single stock tranaction, day trade, corporate buy out, insurance sale, overseas sale, everything. Make everyone pay upon purchase and eliminate the free cell phones for the welfare crowd.
This I believe is the fairest tax collection method of all as everyone pays something but based only upon consumption. Thus the wealthiest among us, consuming more will pay more than the poorest who theoretically  buy less.
Tax drugs too.

258 For it to remove the income tax, it has to really remove the income tax; someone above said that the Fair Tax removes every tax from the paycheck, including social security/medicare. Others seem to be assuming that the latter would remain. But for all practical purposes, the latter are just part of the income tax—they’re general taxes going into the general fund. They could be raised for a de facto income tax if they remained on people’s paychecks.

259

Mealy,

 

No filing to get a prebate.  Everyone gets it, from the poorest to the richest.  If youÂ’re a legal citizen of the U.S., itÂ’s automatic.

 

Vic,

 

I could well mean a tax increase for you, I donÂ’t know, but the Fair Tax Plan makes it your decision.  If you are middle class and donÂ’t want to pay a lot of taxes in a certain year, donÂ’t buy a new car or house, taper off on buying clothes and appliances, wait a year or two to purchase that bass boat youÂ’ve been wanting and walk on by the motorcycle dealer instead of buying one. 

 

When you are feeling a little richer, go ahead and buy to your heartÂ’s content.

260 to get to a fair-tax, you have to go to a flat-tax first... to ween people and corporations off of things like mortgage-deductions...

so it would take 10-20 years to switch to a sales-tax basis, which fluctuates even more than an income based system at appropriate levels...

261

As long as the federal income tax were repealed and its enabling amendment also were repealed then a national sales tax would be the best thing to happen in any of our lifetimes to the government and to the populace and the economy at large.

Income taxes levy on savings and capital investment.  That's idiotic.  Over the long haul savings and capital investment are the two main drivers of job creation and thus prosperity.  To tax them is to waste ourselves and to destroy our own standards of living.

Sales taxes levy on consumption.  That broadens the tax base (and puts skin in the game for everyone, instead of fostering de facto class warfare), while simultaneously giving freedom of choice to taxpayers regarding the extent to which they're taxed.  Splurge on that Lexus SUV and fork over a large tax stipend to Uncle Sam or invest that money in stocks, bonds and real estate and keep the proceeds for yourself, simultaneously while funding R&D somewhere, or the creation of a job, or the provision of governent services.  It's your choice.  A win-win situation for all concerned parties.

262 Until the 16th Amendment is repealed, any move towards a national sales tax would be imposing another tax onto the income taxes we pay, and in in lieu thereof.

263

Late to the thread, so apologies...

Tried scanning through the comments for observations about other countries' experiences with national sales taxes (not VAT but actual POS types as we're discussing).  Didn't see any comments (apologies if I overlooked), so here goes.

I've lived in Japan for various multi-year stints, and as some morons may know, Japan has had a national sales tax since the 1990s.  It's basically an adjunct to all the other taxes out there including income tax. 

(Japan still has no national taxpayer ID number system in place [not in the way the US uses the SSN as an individual income-tax taxpayer ID].  So what happens in practice is that people working for any enterprise of reasonable scale/size, including especially large corporates, bear the brunt of income taxes because they are readily identifiable by the default monitoring mechanisms of their employers' payrolls. But alternatively a lot of solo proprietors and similar small-time outfits manage to fly under the income-tax radar, sometimes to the tune of absolutely stunningly huge amounts if/when ratted out to the National Tax Authority.)

Japan has been looking at raising this national POS sales tax again, given the perilous state of the country's debt/GDP ratio even before the earthquake/tsunami disaster.  As the past 20 years of zombie-economy experience have painfully demonstrated, there are all sorts of inhibitions to dynamic, large-scale job creation in Japan that will take decades to dispel if ever.  So, give the desperate need to rectify the national finances, people have become resigned to yet more hikes in the sales tax, even though doing so will further depress consumption probably and add to the country's deflationary woes.

My takeaway from Japan is that if you don't have truly significant economic-structural and cultural impediments to innovation, creative destruction/renewal, and risk-taking (in other words, bedrock principles, inclinations, capabilities, and environment in the US), then a national sales tax is a bad idea.  Yes the debt/GDP ratio doesn't get chipped away at absent such a sales tax, but that just means (insert smaller-government/fiscal rectitude arguments here).

I've also lived in Canada (specifically Toronto), where a national point-of-sale GST (Goods and Services Tax) has been imposed over and above a point-of-sale PST (Provincial Sales Tax).  Again, we're talking about an adjunct to income tax, not a replacement for it.

I don't know whether there's been any real, worthy-of-the name budget-balancing and austerity achieved in Canada in recent years, but when I lived there in the late 1990s it sure didn't feel that way.

Consequently, especially on the "Services" side of the Goods and Services Tax, I saw a lot of handyman work, for example, where the bids were won in part based on a 100 percent shaving off of the GST.  Also some pretty rampant income tax-evasion as well.

264

1)  A national sales tax w/o an elimination of the income tax, is just letting the camel get his nose under the tent.

2)  If you eliminate the income tax suggested above, you do indeed get more skin in the game, until the Dims, pass bills for the current 50% that don't pay taxes, to get deductions.  Again, paying no additional taxes.

3)  A national sales tax, like a VAT, is a trade-off.  Good - consumers more likely to think twice before purchasing something they "want", and instead "save", which is good for the economy.  Bad - less puchases, less growrth.

265 Oh, no problem. I get why most people donÂ’t like the IRS --- because about 50% of my business is getting between the IRS and people who owe taxes for a variety of reasons. And I have had to sit through more than my fair share of audits (both as a lawyer and as the person getting audited).

Thanks, Mutt.

I heard a radio commercial over the weekend that just irritated me so much and I guess it's still sticking with me.

It starts out with a woman saying "I didn't file for four years!" In the end, the ad is about paying "less than you owe".

Yep. Still pissed off.

266 I would gladly support a 5% NRST as a means to make up the revenue lost to a reduction in the payroll tax to the same percentage. 

267 I could well mean a tax increase for you, I donÂ’t know, but the Fair Tax Plan makes it your decision. 

I did a week's worth of research, including doing sample tax calculations for everyone making over 25K. It was a massive tax increase for everyone except people above 500K.

The only people who make out are the very rich > 500K and the corporations who would pay no taxes.

268 I can understand the sentiment, but I fear the execution of said tax.  First of all, how many millions of people already receive food stamp benefits?  40+ million?  So, we increase the cost of staples, like food, by a national tax.  That means we need to dole out even more cash to support these folks.  These folks don't have any more "skin in the game" before or after a tax.

269 The problem with the Amendment that authorized the income tax is that it placed no limits on the tax rate; it started at 1% then crept up. That was not an accident - it was intentional.

If the income tax is to be replaced the amendment authorizing a national sales tax must have a percentage limit - no higher than X% where X is the number argued over between liberals and conservatives.

Those who don't learn from history are doomed to repeat it.

In addition the Texas sales tax model - which doesn't tax food - is the one to follow.

270 As I have repeatedly said the only "fair" tax is a flat tax on all income from all sources with no exemptions and no exceptions.

ALL of the other schemes are riff with little loopholes and exceptions to help "the poor" or some other privileged class that would eventually become just as bad, if not worse, that the current system.

In any case, continued debate on this is a waste of time because it is never going to happen unless we can get an Article V convention in which 1/2 of the States are hard core conservatives and then 3/4 of the States ratify it.

That is not going to happen on this version of earth. 

271 A VAT is a horrible Eurotrash idea: it taxes productivity not consumption.

UNDER NO CIRCUMSTANCES CAN WE ALLOW A VAT.

That is what the Liberals want - which is enough to alert you to the fact that it is a terrible idea.

272 FairTax FTW. Seriously.

273

Unless this is a SUBSTITUTE for income tax, this idea is DOA in my book.

Look at what happened with Income Tax. It was introduced 80 or whatever years ago at a 3% rate. No one really balked because afterall.... come on folks, what's the big deal with 3%?  Well, the big deal is that 80 years later that 3% turned into 30%.

You're a friggin' moron if you dont think the same will happen the Nat Sales Tax.

274

#281 and others.

Don't be morons. There is a HUGE difference between VAT and National Sales Tax.   

THEY ARE NOT THE SAME THING, SO STOP PROVING TO EVERYBODY THAT YOU ARE A MORON BY SAYING THAT THEY ARE.   

VAT is hidden, burried cost that noone sees... just like you dont see the cost of what the labor cost is for a widget you bought, you dont see the cost of the VAT.  National Sales Tax is just like State Sales Tax... right there front and center when you pay the bill.  The difference is HUGE from a consumer behavior effect angle.

275 The Fair Tax proposal would require more than 5%, (more like 17-18%).  But it replaces Corporate Income tax AND personal income taxes.

However, it would also EXclude people earning less than some number (say $7K single, $14K married) and also would have a "pre-bate" for chilluns, with the net/net being that those "in poverty" and with a bunch of kids would not pay the tax.

It would be collected at point-of-sale.  There would be form to file stating one's income and # of kids for "pre-bate" purposes, but nothing else, at least on the personal tax side.

Since retailers would collect/remit the taxes, just like State sales taxes, there would be little additional work after the system gets up and running.

The other proposal which is bandied about is the "Flat Tax" and for obvious reasons folks like Steve Forbes prefer that one:  the ultra-rich consume a lot more than the poor/middle class.  Whereas 10% of $50K is 'real money,' 10% of $1 million is expendable.

As you state, the best reason for the Consumption tax is that it reduces consumption and encourages savings, AKA 'capital formation.'

276 As a business owner I'm not being paid by the government to be their tax collector. Why should I have to act as one?

Actually in a sales tax state you are given a percentage of the taxes you collect as a fee for doing the work.

277 The transparency of the tax should NEVER be more important than the efficiency and the amount of market distortion created by a tax. People are very misguided if they think a sales tax impacting consumption/savings decisions is a benefit. The reality is the larger the market distortion created by a system of taxation the greater the overall loss to the economy. A VAT is preferable to a consumption tax in this regard because it only targets where value is added rather than hitting every transaction of components before they become a final good and then again at final sale to the customer and then again for any secondary sales.

Consumption taxes are not at all fair or ideal. They are regressive and make everyone who lives month to month pay a larger share of their income to the government than those who have enough income to save. In other words you make the rich pay less than their "fair" share and those middle class and lower have to pay greater than their "fair" share.

The biggest reason a sales tax is a poor choice, however, is the ease at which it can be avoided.  The internet makes for a perfect black market and the government will either be forced to miss out on tax revenue or start implementing draconian measures to monitor and audit people on a huge scale to stop tax avoidance.

278 I hate sales taxes, I really do. But the truth is, I'd prefer that over an income tax for various reasons laid out here. It really does throw a broader blanket and does hurt so people notice their taxes.

279 Quare: How would a national sales tax or any sales tax catch those in "black market occupations?" The underground economy exits because of taxes. Bartering seeks to avoid taxes as well.

280

"First of all, I think it would require an amendment to permit the federal government to lay a point-of-sale sales tax on good sold to the public. I'm not assuming Congress can just claim "Commerce Clause" and implement such a tax of their own authority."

Why use the commerce clause when there's a perfectly good tax clause? Article 1, Section 8, clause 1:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"

No parsing needed, that speaks for itself. A sales tax at a set percentage is pretty much the definition of a "uniform" tax.

281 Quare: How would a national sales tax or any sales tax catch those in "black market occupations?" The underground economy exits because of taxes. Bartering seeks to avoid taxes as well.

Its impossible to avoid sales taxes. nobody can exist with a 100% barter/underground economy, and you get nailed eventually. In fact, given that an underground economy exists everywhere already without a national sales tax (and in states without a sales tax), you're not really losing anything... but you catch people whose income at present is untaxed such as criminals and tourists.

282 Back in '67, Reagan raised the sales tax, applied sales tax to gasoline, etc, etc, to stave off hyper spending of reliably liberal legislatures. He bequeathed a surplus to Moonbeam Brown, who re-launched the sins of his father. There is no fire and forget on these tax policies.

283 The Fair Tax is only acceptable if the 16th Amendment is repealed.

The Fair Tax is a 23% Federal sales tax on all NEW retail sales.  Build a house; pay the tax.  Buy a previously-owed house, NO tax.  Buy a new car, pay the tax; buy a used car, no tax.

The Fair Tax is designed to replace ALL Federal taxes and to eliminate the withholding in your paycheck.  This means that while the tax appears large, you just got a 35% raise in your take-home pay.

No one will get audited except retail businesses, to make sure their collections of taxes match their sales.  The IRS becomes instantly obsolete.  April 15th becomes a National Holiday and a smart President who signs the bill will celebrate by blowing up the IRS HQ building on National TV.

Everyone gets a "pre-bate" check the first of every month, which REFUNDS to you the estimated tax on basic necessities of life:  food, clothing, shelter.  This makes the Fair Tax fair to everyone, regardless of income.

Crack dealers pay Fair Tax when they buy a Porsche just like you do when you buy a Ford, so income otherwise and in the past invisible to the government, income from the Black Market on illegal goods still pay their Fair Tax on their use of their profits... and can still be prosecuted for failing to charge it and forward it to the government on the retail sales of crack that provide them with their profits.

Check for yourself:  www.fairtax.org

Herman Cain wants it.

284 Many of the questions/concerns I've seen posted here are answered at: http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#42 There are some political challenges in adopting a national sales tax. Mainly, The 16th Amendment must be repealed first, so as to prevent a VAT-like addition and prevent dual-taxation. But one huge benefit that I've not seen posted here is the implicit regulation of illegal immigration. By design, illegals could no longer enjoy earning wages without a tax burden. And, perhaps by sheer economics, illegal immigration could decrease significantly if taxes would based on consumption.

285

As tantelin points out, with a Fair Tax you only pay taxes on new items.

Every used item in the country will instantly increase in value, because it can be purchased without sales tax.  When you get tired of a new toy or a high-end appliance, you will be able to get 40 or 50% of what you paid for it, instead of 10 to 15% that you do now.

I would be a primo used-item shopper if a Fair Tax was in place.  I would put my money in savings so some clever person could borrow it for capital expansion.

And I very much like the drug-dealer illegal-alien cohort becoming tax payers.  Sure, they'll do some things under the table but they won't be able to avoid it all.

286 Uh, guys?

The desire to raise taxes on other people is inversely correlated with income tax paid. The broke-but-not-broke-broke are the only demographic that supports lower taxes across the board.

Having "skin in the game" makes people want to fuck up other people. By raising their taxes. Out of vengeance. It's an outcome that group psychology and game theory 101 both predict, and also a fact. With like polls and shit that say it's so. So, y'know, Google it.

Or keep fantasizing about fucking up the only people who don't want to see you get fucked up. And if your fantasy comes true, they'll fuck you up. And not in the second-hand pussy-ass way you want to do it to them. They'll do it.

287 If there is to be a national tax, make it like Canada's where it is always splashed on the receipt (along with the provincial taxes).

Try to avoid the double-taxing on gas, though.

288 I agree, make it really obvious. Here's the price. Here's what you paid in taxes. Every time.

289 We tax social security income and 401k disbursements. Why not tax welfare payments?

290 Fuck you.

291

#67

 

We need a progressive tax because everyone has skin in the game?

 

You are either stupid or ignorant.  Please explain to us how 47% of the public currently pays no income tax has any skin in the game?

292

I wouldnt mind a national sales tax that will completely and totally replace the income tax system and it is a constitutional admendment that we never have any income tax again and that the tax will only be raised when voted on by the majority of the American people.

.

 

 

293 I propose a 20% tax on everyone's cable and cell phone bills. Throw in cigarettes and booze and we have most of the poor covered. They will always vote to keep the liberal assholes in power to keep the gravy coming. 

294 A VAT is a horrible Eurotrash idea: it taxes productivity not consumption.

UNDER NO CIRCUMSTANCES CAN WE ALLOW A VAT.
Posted by: An Observation

Though it may not be entirely clear, Ace isn't talking about a VAT.  The key phrase is 'consumer purchases.'

295 I had a feeling Ace was a closet lib. We need a new tax to get "skin" in the game. We can't simply fix the existing law. Not your proudest moment- this piece.

296 "With some money coming in on the sales tax side of things, income level rates could be lowered a bit, to make it all mostly revenue-neutral. " Ths is the dumbest thing you've said in a long time. I assume you mean "income tax rates," which doesn't really change the nature of my accusation. Do you really think the sales tax rate would ever be lowered? Can you cite historical examples to support your opinion? Yeah.

297 Texas and Florida have long been funded by a sales tax. It's not a magic solution to anything.

Sales taxes are surprisingly complicated, especially in the area of business-to-business transactions. Also, a sales tax presents an intense temptation to carve exemptions for specific goods and services. The Texas Sales Tax, which which I'm intimately familiar, is a crazy quilt. Most sales of goods are taxed, except for a handful of industries that presumably spent a lot of money lobbying for an exemption. And most sales of services are not taxed, except for a handful of industries that presumably didn't spend enough on lobbyists.

A sales tax sounds cool and wonderful only because you haven't tried it. We've tried it in Texas. It's not magic.

298 The idea of a national sales tax, per se, is not bad.  Implementation is the problem - Congress is so enamored of the Income Tax that there is no way to stop it, or even reduce it significantly.  I don't want to pay both.   

299

Never tax consumption unless your intent is to limit consumption.

If you need a revenue tax the easiest for any economy to handle and to grow with is a flat tax of 15% or less.  No graduations just everyone pays the same personal or business.

300 The need is to get everyone to have some 'skin in the game'.   A sales, VAT, or flat tax would do that.  A flat tax can have the same drawback as we have now, ie a level can be set whereby persons below that level pay no tax.  A VAT is 'hidden'.  A sales tax is the best of the three because it is in the open and unavoidable.  Whatever the plan it must be accompanied by a 2/3 majority needed to change it upward.

301

<h1>Hey!<.h1>

Is there anyway to flag #298 as a STINKIN' SPAM and get it removed?

302

There's nothing inherently wrong with a national sales tax, or its' drag queen cousin the FAIR tax.  (a national sales tax wearing a leopard-skin "prebate" is still a national sales tax - and the prebate is just asking for abuse by Dems who will want to "raise" it...let the history of flood insurance be your guide)

The tricky part is, ya gotta make it hard to raise the sales tax rate.  Requiring a 2/3 majority in both houses to raise the rate is about right.  Check the history of sales taxes in Chicago (Cook County, to be specific) where the current rate is 11% - highest in the country.

Mew

 

303 I like the VAT better than a national sales tax as a replacement for income tax because *everyone* pays it. A point of sale tax would exclude all non-retail businesses from paying any tax at all. To me, that defeats the purpose of reform: everyone has to have skin in the game. No exceptions.

304 315

<h1>Hey!<.h1>

Is there anyway to flag #298 as a STINKIN' SPAM and get it removed?

I think #298 was one of the funniest comments on this thread.  I vote we keep it until lace wigs come back.

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