Kevin:
I don’t think anyone making under $30,000 per year should pay any tax! We could then leave the minimum wage alone which would not harm employers, or consumers by causing business to raise prices.
Cut the fat and waste from the government. Initiate a flat tax for everyone making over 30-K. Then watch the economy grow!
In my opinion, a National Sales Tax (which would abolish ALL other formers of federal taxation?eliminating the IRS) is bottom-line an excellent idea and it would take a politician with some balls to even ENTER this idea into a public debate?which I always thought this ?out of the box? / gutsy idea would appeal to the average T-Man/T-Vixen ? AND because it so REVOLUTIONARY of an idea is the reason it WILL NOT be a debated in this upcoming election.
FYI ? The grass-roots movement to institute a National Sales Tax is called ?Americans for Fair Tax? (http://www.fairtax.org/). I HIGHLY suggest that you take a few minutes of your week and figure out what this idea is all about?THEN I encourage you to talk to your friends and family and discuss it. The idea is worth your time AND the potential benefits are (even conservative estimates) HUGE.
Quick break down ? The National Sales Tax is estimated to have be roughly 23%. Now keep in mind you would no longer have to pay Social Security Taxes or Medicare Taxes AND you would receive a paycheck equal to your Gross Income OR if you happen to live in a state that collects State Income Tax your Net Income would raise roughly 15%
NOW remember the only way you PAY federal taxes is SPEND your money?if you put in bank account (retirement account) you pay NO TAX.
Many of the above replies do not take into account that EVERYTHING you purchase today has imbedded taxes (that includes food, clothing, shelter and transportation ? the basic necessities of life) ? The elimination of these imbedded taxes will LOWER the cost of all these items (the current estimate is that these items would LOWER in cost by 20%) ? This cost saving will basically negate the new sales tax. This concept took me awhile to figure out but spend some time thinking about ii and it will begin to make sense.
So there was some debate above that this would really hurt the poor / underprivileged?in reality they get every penny the earn and pay the same price for the necessities of life.
HOWEVER here is the kicker?YOUR REFUND!!!
Under the Fair Tax plan EVERY AMERICAN CITIZEN will receive a check from the federal government every month equal to the sales tax that person would expect to pay on the purchase of basic necessities of life for that month. The size of the monthly payment will be based on the governments published poverty levels for various sized households:
?Let’s say you’re a married couple with two children. The Fair Tax Act sets forth a formula for computing the poverty level, based on government figures, which negates any marriage penalty. Under the Fair Tax Act in 2003 you would have been granted an annual consumption allowance of $24,240. This is what the government would assume you would have to spend during that one year to buy the basic necessities of life for your family. The sales tax on this amount would equal $5,575. The government will rebate this amount to you in 12 equal monthly installments of $465. What about a single woman with one child? Her monthly rebate in 2003 would have been $232. The lowest payment would be to a single person with no dependents. That person would receive $172 per month.?
So the final breakdown:
[quote]ZEB wrote:
DrS:
“How much do I need?” WOW! Stated like a true liberal! Liberals seem to be under the impression that at a certain point it is unfair for a man to keep all of his weekly pay.
Here is how much I need: As much as I am capable of earning! And at no point should I be penalized more than the fellow who is making half of what I earn.
Let’s have a flat fair tax![/quote]
Zeb:
Reminds me of the Marxist axiom:
“From each according to his ability to each according to his need.”
I heard a pretty interesting interpretation of this the other day from an econ professor:
[paraphrase from memory] “I’ve never heard a more perfect system of incentivizing people to maximize their needs while minimizing their abilities.”
Conservative arguments against the Sales Tax:
http://www.nationalreview.com/nrof_bartlett/bartlett200408090847.asp
August 09, 2004, 8:47 a.m.
A National Sales Tax No Vote
The rates would be vastly higher than what you might suspect.
House Speaker Dennis Hastert created a flurry of excitement in Republican circles the other day when it was reported that he is proposing the abolition of the Internal Revenue Service in his new book. This would be accomplished by eliminating all existing federal taxes and replacing them with a national retail sales tax.
There is no indication of what tax rate Speaker Hastert thinks would be necessary to replace all federal revenue. A current proposal by Rep. John Linder (R., Ga.) says that a 23 percent rate would be adequate. But such a low rate can only be sustained by making completely absurd assumptions about what would be taxed. Every serious economist who has ever looked at this question has concluded that a vastly higher rate would in fact be needed.
An unstated assumption is that the 23 percent rate proposed by Linder is comparable to existing state and local sales taxes, where the tax comes on top of the purchase price. Thus, a 5 percent sales tax on a $1 purchase comes to $1.05.
But that?s not the way the Linder plan works. He deceptively calculates the rate as if the tax is part of the purchase price. He calls this the tax-inclusive rate. Calculating the rate the normal way people are accustomed to with state and local sales taxes would require a 30 percent tax rate, not 23 percent.
When Congress?s Joint Committee on Taxation scored the Linder proposal four years ago it estimated that it would actually require a tax-inclusive rate of 36 percent, not 23 percent, to equal current federal revenues. Calculating the rate in a normal, tax-exclusive manner would mean a 57 percent rate.
Economist Bill Gale of the Brookings Institution notes that supporters of the sales tax assume that there will be no tax evasion under their proposal and that the size of government will not grow, even though they would send a large annual check to every American in order to offset the regressivity of the tax. Making realistic assumptions, Gale estimates that the tax-inclusive rate, comparable to Linder?s proposed 23 percent rate, would actually have to be about 50 percent. A rate comparable to existing sales taxes would be close to 100 percent.
And let us not forget that state and local sales taxes would come on top of the federal sales tax, pushing the total rate even higher.
Obviously, the federal government is not going to impose tax rates this high, nor would anyone pay them if it did. There would be a massive tax revolt.
The Linder bill (H.R. 25) is also deceptive in its basic assumption that all consumption of goods and services in the U.S. would be taxed. Implicitly, Americans would be taxed on, among other things, all medical care, purchases of new homes, and services provided by state and local governments if Linder?s bill became law.
This means that if you are sick and have large doctor bills, you are going to pay 30 percent on top to the federal government. (Alternatively, you would pay 30 percent more for health insurance.) If you buy a new house listed for $150,000, your actual purchase price is going to be $195,000, including the sales tax. (Alternatively, there could be a tax on the imputed rent homeowners pay themselves for living in their own homes.) And if your children receive $20,000 worth of education each year from the local public schools, somehow or other you are going to have to pay an additional $6,000 to the federal government.
Of course, it is completely idiotic to think that the American people will ever allow this to happen. The idea of taxing all consumption sounds nice in theory until you realize just how broad the definition of ?consumption? would be under Linder?s plan.
Economist Evan Koenig of the Federal Reserve Bank of Dallas makes the point that any new sales tax is going to raise prices by that amount. If the Federal Reserve accommodates it, we are going to have 30 percent inflation the year the tax is introduced. If it is not accommodated, then producer prices are going to have to fall by 30 percent, which will cause a severe recession and greatly reduce the tax yield.
Somehow or other, Linder has gotten 54 House members to co-sponsor his proposal. They should all pray that their opponents overlook their poor judgment. When last the national retail sales tax was a major campaign issue ? in the 1996 senate race in Louisiana ? the Republican sales tax supporter was crushed by his anti-sales-tax Democratic opponent. That may explain why only two senators support Linder?s plan, one of whom is retiring this year.
With all due respect to Speaker Hastert, trying to eliminate the IRS by adopting a national retail sales tax is a very dumb idea.
? Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.
From Ramesh Ponnuru:
For what it’s worth, I think that a national sales tax is the worst of the possible options, for some of the reasons Bartlett mentions and a few others. Most important is that a national sales tax (or worse, a VAT) would prove too efficient a money-raiser for the government. Its fans say that it would help restrain the growth of the federal government because people would see its price every time they bought an ice-cream cone. Experience suggests, however, that people would be more likely to monitor their income taxes and property taxes than their sales taxes. Voters seem to be much more easily annoyed by income and especially property taxes than by sales taxes. A conservative policy shift that appeals to that sentiment in the short term ? by shifting from property and income taxes to sales taxes ? will probably result in the long term in a higher level of taxation.
…
…that a national sales tax would allow us to eliminate the hated IRS. This assumes that the introduction of the sales tax would coincide with the permanent elimination of the income tax. Otherwise, you would end up with both taxes. (Sometimes sales-tax advocates talk about repealing the Sixteenth Amendment, but they would have to go further and write an actual ban on income taxes into the Constitution. I find it hard to believe that the modern courts would block an income tax even if the Sixteenth Amendment did not exist.)
Anyway, the federal government cannot raise the amount of money it takes to fund its current operations, or anything close to them, without being intrusive. Perhaps the intrusion could be confined to business owners who would be tasked with collecting sales taxes–in which case it might end up being much more onerous on this class. But almost every economic transaction you make will continue to be the business of the federal government in some way or other.
Who here would be in favor of legalizing prostitution and taxing it? It would: 1. reduce government costs by eliminating the need to prosecute these offenders, and 2. create another tax base. Prostitution is a victimless crime.
Man I remember this argument from my freshman poly sci class. I liked the simplicity of a flat tax but after being forced to write a paper on it I found some major problems to consider.
First and foremost are the 200,000 accountants and tax attorneys who rely on the complexity of our current tax system for their livleyhood.
If you have any grasp of the concept of economics you will realize you cannot make any abrupt changes to the current tax system without considering the ramifications of pulling that many salaries out of the economy. You can’t allow that many jobs to disappear overnight without a contigency plan.
We’re not talking about factory worker jobs being sent to the third world, we’re talking about people who spent alot of time and money on higher education who will not easily find employment comprable to their current income levels.
[quote]MikeTheBear wrote:
Who here would be in favor of legalizing prostitution and taxing it? It would: 1. reduce government costs by eliminating the need to prosecute these offenders, and 2. create another tax base. Prostitution is a victimless crime. [/quote]
To the same extent I agree with legalizing gambling and soft drugs, which is to say legalized but definitely regulated.
Re: BB’s concern about multiple taxes
There are no multiple taxes in the system I’ve proposed, because the sales tax constitutes a tax credit. The three major problems with taxing via sales taxes are the hidden nature of the tax, the avoidance of taxes by purchasing items tax-free under some loophole (e.g. a wholesaler’s license), and the lack of special-case deductions and credits. By still requiring a filed income tax return, we avoid all of these problems. By giving a 100% tax credit for previously paid sales and use taxes during the tax year, we avoid the regressive nature of the tax. All you need to do is save your receipts and be aware of your expenditures, which is a good habit for money management anyway.
Side effect: people will actually begin to understand how much money they spend and on what. This will teach many people how to better manage their finances.
Re: legalising prostitution, I think pretty much everything ought to be legal. I am of the opinion that we should let people sell sex, drugs, deadly liquor varieties (e.g. absinthe), whatever. The key factor would be whether it has an approval seal from an appropriate government agency on it. If it doesn’t, the tax rate should be higher to defray costs related to it. As more information becomes available on various things, we can simply withdraw seals from products we no longer consider safe for the public. (A different seal might be reserved for products known to be harmful, such as cigarettes or carcinogenic vitamin supplements.)
This has two main effects. First, it brings in boatloads of tax revenue. Second, it encourages those lacking in basic self-control to go right ahead and kill themselves using whatever vices they prefer; over time, this will eliminate these weak bastards from the gene pool.
It might not sound like a friendly attitude, but I’m sick of this country being so full of idiots. Most of them would have killed themselves long ago if they weren’t so heavily protected by all the dumbass safety devices in this culture. If an eight year old kid thinks it would be funny to stick firecrackers up his nose and light them, maybe that kid deserves what he gets instead of becoming the poster child for banning fireworks.
Tom,
The accountants and lawyers who have been preying on the tax payers will not go without work. They will simply make less money than they are used to. I think they will be able to survive quite nicely!
Rather you should have empathy for the millions of tax payers who have been taken advantage of by an unfair regressive tax system.
You never improve any culture by encouraging the slide in morality. All you do is increase the pain involved in peoples lives by legalizing prostitution, gambling etc.
Check some of the stats on how much money the large casinos make and where it comes from. Probably 60% of their revenues are on the backs of the seniors and welfare recipients that they bus in to play the slots. That’s not exactly what Hollywood would have you believe. Not so glamorous.
Has gambling improved Atlantic City? Crime is up! Drug use up! Prostitution (and the disease that comes with it) up! unemployment up! Divorce rate up! Murder rate up! What happend to all of the big promises of casinos improving everyones life? It was a lie!
We don’t have to do these things as a nation to improve our tax system. It’s just a matter of having the will to push through a fair flat tax, and the leadership to carry it forth!
[quote]ZEB wrote:
You never improve any culture by encouraging the slide in morality. All you do is increase the pain involved in peoples lives by legalizing prostitution, gambling etc.[/quote]
Doesn’t it decrease the pain in their lives from doing these things AND being arrested?
The fact is, people are not prevented form gambling because there are laws against it. They are simply forced to go into less savory places and deal with less trustworthy people, who are more likely to defraud and mistreat them.
The same goes for prostitution and drugs. If you go out to pick up a prostitute today, you can’t go to a reputable provider of clean, well-managed prostitutes. You have to pick up some whore off the street. And when you go out to buy drugs, you can’t go to your local drugstore and buy a respected brand of high-quality dope; you have to sneak around back alleys and deal with hoodlums.
These things expose people to more danger than the immorality itself. And while isolated pockets of legality do attract the criminal element, this is only because you’ve forced people who fear this culture into an identifiable location… where they can be easily victimised.
This is a very complex question, and I’m not pretending that legalising all the various vices will solve all our problems. However, I believe it will solve bigger problems than it causes, which makes it worth doing.
[quote]Tom_H wrote:
Man I remember this argument from my freshman poly sci class. I liked the simplicity of a flat tax but after being forced to write a paper on it I found some major problems to consider.
First and foremost are the 200,000 accountants and tax attorneys who rely on the complexity of our current tax system for their livleyhood.
If you have any grasp of the concept of economics you will realize you cannot make any abrupt changes to the current tax system without considering the ramifications of pulling that many salaries out of the economy. You can’t allow that many jobs to disappear overnight without a contigency plan.
We’re not talking about factory worker jobs being sent to the third world, we’re talking about people who spent alot of time and money on higher education who will not easily find employment comprable to their current income levels.[/quote]
In addition to what Zeb said, the money spent on tax compliance won’t simply disappear from the economy – it will be retained by the corporations and individuals who were spending it on basically valueless (as far as economic production is concerned) services and applied to either spending or investing.
“a reputable provider of clean, well-managed prostitutes”
Does this phrase sound like an oxymoron or what? I happen to agree with you Darklock. The government is not a nanny for morons funded by taxpayers.
Bush said the idea was interesting, not that he was looking into it. Forbes was running on the flat tax, where did it get him?
CDarklock:
You can look at that issue many different ways. If there are available prostitutes who are “clean” (if that can ever be achieved), does that help the married guy who otherwise would not have experiemented, or does it cause pain?
If there are more places to gamble (well lighted, bright colors etc), will that help the guy who has a difficult time bringing his pay check home, or does it cause more pain?
Just because you bring “vice” out into the open and place it in legitimate areas of the community does that mean that it helps our society? Sorry can’t see that happening.
Again, I see your point. If it is going to happen anyway you want it to be controlled and taxed. My point is that if you legitimize it you get far more people attracted to it and it causes more long term pain.
Pain in marriages and pain with personal money management, (where America already has a problem) is not the answer to our current tax problem. These things usually do not help and often harm a society, for obvious reasons.
Now back to the flat tax!
Darklock,
I usually stay off these tax/politics/gov’t forums but i just wanted to say that i agree 100% with what you said about dealers/prostitutes/gambling etc. If it were legal, not only could it be regulated and taxed, but it would be safer in general. I’m not saying legalize crack and sell it to kids, but weed, hookers, roids? Harmless when used in moderation.
Excellent point!
[quote]CDarklock wrote:
Re: BB’s concern about multiple taxes
There are no multiple taxes in the system I’ve proposed, because the sales tax constitutes a tax credit. The three major problems with taxing via sales taxes are the hidden nature of the tax, the avoidance of taxes by purchasing items tax-free under some loophole (e.g. a wholesaler’s license), and the lack of special-case deductions and credits. By still requiring a filed income tax return, we avoid all of these problems. By giving a 100% tax credit for previously paid sales and use taxes during the tax year, we avoid the regressive nature of the tax. All you need to do is save your receipts and be aware of your expenditures, which is a good habit for money management anyway.
Side effect: people will actually begin to understand how much money they spend and on what. This will teach many people how to better manage their finances.
[/quote]
Ah, but there are two: a national sales tax, and a national income tax. My problem isn’t that they couldn’t be used in concert in the way you propose, but that there are two taxes that the juggernaut of the federal spending machine could manipulate in the future to fund whatever was the cause du jour. The mere introduction of the sales tax opens up this possibility, irrespective of how you would guard against it in the initial system.
I think your proposal would work well – my problem is a projection into the future when Congress wants more money for something or other – personal fuel cells for everyone! or something – and now it has two tools to mess with, either via raising the levels or repealing some of the allowable write off of the sales tax.
[quote]ZEB wrote:
If there are available prostitutes who are “clean” (if that can ever be achieved), does that help the married guy who otherwise would not have experiemented, or does it cause pain?[/quote]
It might. If prostitution were legal, and I went out and hired a prostitute to perform a four-way around the world with whipped cream and a cherry, my wife would not have a problem with it.
But I still wouldn’t do it, because I think it’s trashy to hire a prostitute. It doesn’t matter whether it’s legal or not, I don’t want it. But I don’t see any good reason why you can’t have it, if that’s what you want. Whether it will cause pain is not my problem, it’s yours. I’m not your babysitter or your therapist. Handle your own shit.
[quote]BostonBarrister wrote:
Ah, but there are two: a national sales tax, and a national income tax.
[/quote]
The sales tax is actually not a separate tax in my proposal, merely a collection mechanism to replace tax withholding and minimise the impact of filing the federal return each year.
It still has two tools to mess with, largely owing to the cessation of refunds. Without refunds, any increase in the POS collection rate always raises government revenue. When the annual return rates are altered, they only increase revenue when the filing individual has not purchased (or cannot demonstrate evidence of purchasing) sufficient goods and services over the course of the year.
And yes, I am aware that this provides a substantial avenue for abuse, but it could be rectified with appropriate measures in the legislation.
Figuring out what the POS collection rate needs to be, for example, is a pretty complex matter. The mechanism for calculating this should be clearly specified, and anticipate changes to the economic climate in the future. I’m not economically educated enough to even begin proposing a good method, so all I can really do is say “we need a big complicated formula right here”. 
I agree with Darklock’s social Darwinist perspective. Prostitutes don’t cause marriages to dissolve, people do. I have a cynical perspective on this - if a person (man or woman as both are guilty) is going to cheat on a spouse, that person is going to cheat regardless. If the avaliability of prostitutes weeds these people out early, society is better for it. Say one year after a guy gets married he decides he needs a little extracurricular activity, so he gets a prostitute. His wife finds out and divorces him? Is this a bad result? I say no. While no doubt this would be painful for the wife, it was better that she found out before she started having kids with this guy, because this guy probably would have made a crappy father and he probably would have ended up cheating down the road anyway. I don’t share the delusional view that if we just passed laws enforcing moral codes and make everyone attend church that we would have a Leave it to Beaver society. And I agree with Dark that making prostitution legal would not cause me to hire one because I’m married and don’t do that kind of thing. Adultery is no longer illegal (except in the military) but that doesn’t mean I go and cheat with the horny neighbor lady.
One other thing - there are lots of behaviors that can ruin marriage. In college I worked at a golf course, and these guys, most of them married, would spend the whole damn weekend at the course. They’d golf all day Saturday, then go play cards at night, leave at 3:00 in the morning to get some sleep, they’d be back by 9:00 Sunday morning, golf all day again, and not leave until 10:00 Sunday night. I could only imagine what these guys’ wives thought.