National Sales Tax

[barry2952]

Now that GWB has promised to reform our tax system, he's now behind a National Sales Tax. All you Bushies were against it before. Are you going to get behind it now?

 

[Joeychgo]

I've always thought it was a good idea, providing ALL payroll taxes are repealed.

Its accomplishes 4 main things that I see.

First, it eliminates non payment of taxes by even honest people. How many carpenters who do side work reporrt that income? Add to those types the hookers, drug dealers, ebayers, etc.

Second it simplifies the tax system. Instead of every person filing a tax return, only businesses will have to, and they already do so, hence the burden of preparing, mailing, receiving, processing tax returns will end saving billions - on top of that, employers will have an easier time hiring because payroll taxes can be a real pain to deal with every month.

Third, If the economy needs a booster shot, its easy to do by simply reducing or suspending the tax temporarily. For example, a 1 day moritorium could generate billions in business for companies that single day.

And fourth, the tax can be set at different levels for different things. Example, 2% for food, 10% for cars, 7% for house purchase, 20% for retail, 25% for alcohol, etc. (this mechanism is already in place in most states) So if we want to push sales in a particular sector, say cars, we just drop that tax rate temporarily. If an industry is having trouble for some reason, you can help adjust by dropping that tax rate. When gas prices rose six years ago, Illinois reduced the gas tax for 6 months to help compensate.

One downside I see, is credit card purchases and mortgages. In that people will now be financing and paying interest on the tax. For a 30 year mortgage, that could be quite an expensive propisition.

 

[MonsterMark]

I dropped my glass and pxxxsed in my pants when I read your post Joey. Now I know you voted for Bush.

Well said my man. I actually have nothing to add right off the top. Hasn't been on the agenda so I guess some homework is in order.

You'll love being a Bushy Republican and you'll be a much happier person too. These next couple of years will be very good to you.

 

[Joeychgo]

Keep talking like that bryan and ill pour that beer over your head --- of course ill have to stand on a stool to do it...

 

[Jibit]

Keep talking like that bryan and ill pour that beer over your head --- of course ill have to stand on a stool to do it...

Time to break out the beer bong!

 

[Randeaux]

Bravo! Joey! Couldn't have put it better myself. Put flatley, I'd gladly forgo the joy of lugging a briefcase full of what amounts to useless papers to H&R Puffinstuff's (sorry,H&R BLOCK'S), recieving less than 50% of my paycheck every 2 weeks, worrrying about an audit every time I turn around,and pay taxes to a government-run school of which I have no kids to go to at all, to even have the priviledge to even to pay a 22% tax on everything. I'd even forgo a yearly tax refund for this!

 

[Joeychgo]

well thank you --- it also encourages something that has been lost in this country -- SAVING!

If you dont spend it, your not taxed.

 

[Randeaux]

You sure got that right! IMO, it sure would be nice to see more than what amounts to little more than bus fare in the savings column of my monthly bank statement!(LOL!)

 

[Joeychgo]

And for the record - I am neither republican nor democrat. vote for who and what makes sense to me.

In this election - I voted for both John Kerry(D) and Henry Hyde(R).


I dont agree or disagree with either party overall - I make decisions based on what makes sense and what I think wil work the best for the country as a whole.

 

[Randeaux]

It's about time someone else said that, Right on! And that's how people should vote, who they think is best for the job, not vote in blinded hatred of the other person or their political affiliation.

 

[MonsterMark]

And for the record - I am neither republican nor democrat. vote for who and what makes sense to me.

In this election - I voted for both John Kerry(D) and Henry Hyde(R).


I dont agree or disagree with either party overall - I make decisions based on what makes sense and what I think wil work the best for the country as a whole.

Oh, Lordy Lordy, Now you sound like FOX. Fair and balanced.

Trust The Force Luke!

 

[raVeneyes]

One downside I see, is credit card purchases and mortgages. In that people will now be financing and paying interest on the tax. For a 30 year mortgage, that could be quite an expensive propisition.

Unfortunately everything has a downside that someone can pick on.

I agree with you, but for sake of argument people are going to say things like:

- it will cost more because we will have to assign many more federal agents to track down and enforce taxes on black markets
-a simplified tax system is unfair (see arguments about a flat tax)
-industries will constantly be campaigning for lower taxes...adding a heavy burden to the government
-people will try to get out of taxes by disolving thier busniesses and becoming individuals...then everything they recieve is only income and not a sale in a business sense (where do you draw the line between someone who is running a business and someone who is selling stuff? Does the national sales tax apply to yard sales?)
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People already do finance taxes on mortgages, and it is usually a heafty proposition.

 

[Joeychgo]

- it will cost more because we will have to assign many more federal agents to track down and enforce taxes on black markets

Actually, no. Most of the states already have the collection mechanisms in place to collect sales taxes, you simply have the states act as the collection agent and cut them in for a commission (in IL the state cuts the business in for something like 1.5% of the collected tax as a commission)

-a simplified tax system is unfair (see arguments about a flat tax)

As with anything else, its how its applied. You make it more appropriate by lowering the tax rate on food, and lower priced retail items, and no tax on rent payments, a lower tax on homes under $300k, etc. You place a higher tax on big ticket items like ultra luxury autos, boats, high end retail, etc.

-industries will constantly be campaigning for lower taxes...adding a heavy burden to the government

THat already happens. Lobbiests are everywhere - nothing new.

-people will try to get out of taxes by disolving thier busniesses and becoming individuals...then everything they recieve is only income and not a sale in a business sense (where do you draw the line between someone who is running a business and someone who is selling stuff? Does the national sales tax apply to yard sales?)

Technically, in most states, yes, the Yard sale is suppose to be taxed - its already like that.

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[raVeneyes]

Actually, no. Most of the states already have the collection mechanisms in place to collect sales taxes, you simply have the states act as the collection agent and cut them in for a commission (in IL the state cuts the business in for something like 1.5% of the collected tax as a commission)

The federal government is not allowed to ask state governments to do anything for them...that's why there is a difference between federal law enforcement and state law enforcement.

As with anything else, its how its applied. You make it more appropriate by lowering the tax rate on food, and lower priced retail items, and no tax on rent payments, a lower tax on homes under $300k, etc. You place a higher tax on big ticket items like ultra luxury autos, boats, high end retail, etc.

Then you have the same problems as you have with the current tax system

THat already happens. Lobbiests are everywhere - nothing new.

Agreed, just playing devil's advocate and mentioning what others will use as arguments...

Technically, in most states, yes, the Yard sale is suppose to be taxed - its already like that.

So who's going to enforce $0.35 tax on a dollar sale of a car from my friend to myself... And who's going to investigate if that sale was really for $1 or not... And then does my friend have to file a tax statement and mail a check to the US Government for $0.35... So then does everyone have to file a tax statement every year to certify that they didn't make any money that year from being a business???

There are a lot of little details to such a new tax system... not to mention the many social and political ramifications of changing the tax system

 

[Joeychgo]

So who's going to enforce $0.35 tax on a dollar sale of a car from my friend to myself... And who's going to investigate if that sale was really for $1 or not... And then does my friend have to file a tax statement and mail a check to the US Government for $0.35... So then does everyone have to file a tax statement every year to certify that they didn't make any money that year from being a business???

There are a lot of little details to such a new tax system... not to mention the many social and political ramifications of changing the tax system

Yes - but the states already have the mechanisms in place to solve many of these problems. And the states can act as a collection agent, just not an enforcement agent for the law. Here in IL - the car dealers charge the tax- and if its an individual sale - the state uses the blue book value for the tax calculations and charges that tax when you transfer title.

No system is perfect - and I dont claim to have all the answers- all will have loopholes and glitches... But its my belief that this will be simpler, cheaper to administrate, more emcompassing and more fair, assuming its designed and implemented correctly. It also eliminates a large percentage of tax cheats -- and non filers. Drug dealers pay 0 taxes right now - theives and embezzlers dont file W-4's, prostitutes either. Right now, If I go to vegas and win 10k at blackjack, or I win $500 and my friday night poker game with my buddies, its tax free money cause there is no way to enforce the tax law except the individual's honor, which most of us do not possess when it comes to volunteering tax payments. You think that drug dealer on the corner paid for that $5000 gold chain hanging around his neck with his NET earnings? No taxes came out of the money he earned - but a sales tax would recoup at least some of that lost tax dollars -- How about the money tourists spend in the US - we never see a dime from that - now we would. Every set of micky mouse ears or roll of film sold to a japenese tourist would contribute to this country's tax base, thus reducing the actual amount we as citizens would have to pay.

Ultimately - I think such a system would reduce the costs of collection, while increasing the collection rates - and would result in a net gain in taxes overall and a lower burden overall. Employers would save billions in payroll accounting costs and the working poor would have an easier time meeting day to day needs like rent, food and healthcare.

 

[barry2952]

When I posed this question several months ago many discounted the effect that the underground economy has on the tax base. Is it really fair that pimps and whores and drug dealers get a free ride while we have no choice but to pay our taxes through the payroll deduction system?

It's not just tax cheats in illegal activities. Many professional people and tradesmen only deal in cash. How much of that gets reported? How much would you report? I think that question is important.

A closer look at GWB's plan shows he wants to charge an NST on top of state sales tax.

 

[Joeychgo]

again, it isnt just illegal activities --- how many carpenters do side jobs for cash? electricians? mechanics?

 

[Dereck]

Hi Joey

again, it isnt just illegal activities --- how many carpenters do side jobs for cash? electricians? mechanics?

I am a mechanic and I do

If you guys think sales tax is such a good idea come to the UK.

Ours started at 8% it is now 17.5% and Europe wants us to raise it to 25%.

Oh yeah! That's on top of 25% income tax and 25% savings tax and 2% of the selling price of a house tax and 75% of a gallon of gas is tax and local city tax (mine is $2000 per year) and 5% utillities tax and 40% inheritance tax and 40% capital gains tax and so on.

Regards

Dereck

 

[Joeychgo]

well - we're talking about replacing the income tax with a sales tax -

 

[Dereck]

Hi Joey

well - we're talking about replacing the income tax with a sales tax -

Hhhmmm! cant see it happening somehow, sounds to simple.

Regards

Dereck

 

[barry2952]

Simplicity is the goal. Fairness would be the outcome.

 

[Dereck]

Hi All

I have just thought of a reason you should not adopt this increased sales tax idea and abolish income tax.

It would make it more expensive for me to vacation in the states You guys keep paying the taxes so I can have cheap vacations

Regards

Dereck

 

[Kbob]

I have just thought of a reason you should not adopt this increased sales tax idea and abolish income tax.

It would make it more expensive for me to vacation in the states You guys keep paying the taxes so I can have cheap vacations

I'm sure Katshot would be more than happy to help you save some money by letting you stay at his house when you vacation here. :N