Goodbye Infernal Revenue Service

It looks like someone somewhere has two synapses firing off. Is this just wishful thinking?

National Sales Tax

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"If we were to get rid of the sales or the income tax and the payroll tax and all compliance costs, we would be so ferociously competitive in a world economy that corporate America would not be competed with unless foreign corporations started building their plants in America," Linder said.
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Duh! Oh well, that's why it's called congress and not progress. Are republicans in favor of this? If so, they should be able to push it through. What does everyone think? I think it would work.

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"About a trillion dollars now is in the underground economy, untaxed. That's just three items � pornography, illicit drugs and illegal labor. We wouldn't make them more legal if we had a sales tax, but what we would do is tax them when they spent it for personal consumption," Linder said.
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How would they do that? Would you report that you spent $100 on Misc. items, pay the tax and be done? Would they want to know what type of illicit drugs you took while watching porn in a sweatshop? I may need to think about this more. Read the article again. It may sound good but something doesn't seem right.

I am all over this, and love the idea. It has been discussed, debated, and frayed all over the place for quite some time. Imagine a USA with no friggin income taxes to file at the end of the year. No mean IRS auditing you cause you have a home office. IMO, a brilliant plan and workable solution to something most of us hate: dealing with taxes, and having to keep every little last record of everything we do.

One thing I like about the Constitution Party is they're against income tax and want to abolish the IRS.

I say go for it!

This sounds like its not a bad idea, but would internet purchases be taxed as well?

If you start taxing something, you make it legal. You can't have something illegal and tax it at the same time...

[edit on 30-11-2004 by Thorfinn Skullsplitter]

Somehow I think the middle and lower classes are going to get screwed if this thing passes. From the article:

Proponents seek a 23-cent national sales tax on all retail goods, everything from groceries to clothes, cars to electronics. Everyone would pay the same rate, which critics argue is part of the problem.

"If you consume $40,000 a year and you make $50,000 a year, would you feel it is fair if a guy who made a half a million dollars a year but spent $40,000 a year paid the same tax you do? I think you wouldn't feel it's fair," said Buck Chapoton, former assistant treasury secretary.

Critics contend that the sales tax would have to be higher than advocates advertise.

"It would require at least a 30 percent rate, that's a very high rate and may create tax evasion on its own," said Chris Edwards, a tax analyst with the Cato Institute. "The highest state sales tax we've got right now is only 11 percent. So there's a great unknown here, would the government be able to actually collect a 30-percent sales tax?"

Now whether it is 23% or 30% I'm not paying anywhere near that now on my gross income. Not to mention that even if this passes, I still have to pay state income, state sales, property and local taxes. No thanks, I'll stick to income tax.

B.

Dispite many naysayers, I still don't see a downside to a national sales tax. And think of this, with a 20% tax, one millionaire buying a $500,000 house would pay $600,000. $100,000 in taxes is more than many people will pay in their lives, and this guy just dropped that on one purchase. No loopholes. No BS. 20% on everything at the retail level except food (not including alcohol), electricity, and gasoline.

If you can afford those $100 pair of shoes, then an extra $20 isn't going to kill ya. If it is, maybe you should be looking at the $70 shoes instead. That kind of thinking can be applied in most situtations and frankly America could use a little more of it if you ask me. A National Sales Tax would reward frugality and penalize unnessisary extravegance unless you can afford it, and then money probably isn't a problem for you anyway.

The real savings comes in the time and money saved, and the stress averted each year when you no longer have to fret over your taxes or pay some expert to do it. Lets also not forget savings in administrative costs for business in not having to deduct payroll taxes.

Still don't see the downside.

Still don't see the downside.

Never underestimate the ability of congress to completely muck up a piece of legislation intended to reform any system.

Here's a link to the actual bill - HR 25 - Fair Tax Act

You'll note that the site could not host the entire context of the bill itself and has a second link you must click to read individual sections and subsections.

B.

[edit on 11/30/04 by Bleys]

It appears they would tax "personal expenditures". This would be any misc. items you really wouldn't want someone knowing about. The only way they could possibly be able to do that is if they knew exactly how much money you have and how much you spent. If you go to the ATM and take out money you will have to pay taxes on it. That means they will need access to watch your bank account. This looks like a trojan horse.

This sounds remarkably like the Goods and Services Tax(GST) that was introduced here in Australia a few years ago. It was argued that this would cut out the "black economy" but in reality it just made it bigger.

Now when you call the plumber/electrician/mechanic etc the first thing they ask is "will it be cash?" If you pay cash you don't pay GST. Simple eh!

From what I can figure on the model described in the article is if you don't spend money, you don't pay tax? If thats the case you will see people slipping over the border to purchase goods like cars and things so they won't pay tax on it.

Not to mention that once it's implemented, whats to stop them raising the percentage, and this will more than likely happen.

We were told that things would be cheaper under GST, but it didn't take very long at all for the prices of stuff to go back up again. I believe we actually now pay more tax than before.

Do you really think governments do things for the good of the people, or whats best for themselves?

I like the idea personally, maybe some tweaking but the IRS has to go, to much bloat and not enough anything. Accountants will be out of work though, lots of them!

the official site for this is www.fairtax.org
sounds good to me

All I want is a flat tax - thats it. Fair for everyone. Everyone pays the same %, no more BS from the IRS - you just take your income, take X% subtract, and your done.

That is the TRUE fair way to do it.

Not going to happen!

An entire government bureaucracy put out of work? Dream on. Can't you hear the cries now?

When people work for the government, federal or state, they feel that it is guaranteed to last until retirement, along with pension, 401's etc.

It isn't the same as people who have a regular jobs with industry, service, sales, etc. When you work at one of those jobs you just become a statistic when you are laid off. BUT..horror of horrors....laid off from a Government job? Never happen.

Now what about all of the Tax Preparers, Certified Public Accountants, and Attorneys who depend on the IRS and taxes to make their living. They aren't going away without a fight.

It would be the best thing for the US to rid itself of the IRS and the income tax, but I don't believe it can happen.

Originally posted by American Mad Man
All I want is a flat tax - thats it. Fair for everyone. Everyone pays the same %, no more BS from the IRS - you just take your income, take X% subtract, and your done.

That is the TRUE fair way to do it.

If they did this, I would expect them to also put some type of legislation into effect that would require the businesses to pay a TRUE living wage to all their employees....no more of this letting the taxpayer support them so them and their friends can enjoy an extra hundred thousand or so every year!!

This is one of the best ideas to come down the pipe for quite some time. The scope of Bush�s vision is breathtaking. Even if you have the guy�s guts you gotta give him credit for attempting to cut the Gordian Knot that out tax code has become.

Somehow I think the middle and lower classes are going to get screwed if this thing passes.

I agree that this appears to be an aggressively regressive tax on lower incomes but they are prepared to fix that�.

They are going to send a monthly check to all low income families to compensate for the rise in basic necessities. No filing each month, just a one time proof that you make under X amount (with X being debated now) then they send you a check each month.

Not going to happen!

An entire government bureaucracy put out of work? Dream on. Can't you hear the cries now?

Two reasons why it COULD happen�.

One is that � of all Federal workers are scheduled to retire in the next 4 years. That�s right�one-half. So there will be plenty of vacancies to move displaced IRS workers into.

Also�.

Actually a lot of the government bureaucracy has become politicized vis a vi their unions. This is, I am assuming, why you think they have the ability to fight this change.

These unions have traditionally backed democratic interests. They have a lot of burned bridges behind them in terms of Republican politicians. Now the Republicans control the house, senate and white house and Democrats are running scared (many more dems than reps are up for re-election in 2 years).

The upshot of all this is that momentum is AGAINST these bureaucracies. CPA and Tax Attorneys will still be necessary because corporate taxes are not going away. Good CPA�s and Attorneys will find themselves in high demand.

Of course H&R block is toast�but they only employ seasonal workers for the most part so have little leverage compared to full-time employers. Remember all those federal jobs that are going to open up soon�

Also, please understand that the American people truly hate the IRS and all that it stands for. If the Republicans can make this change and remove the constitutional amendment that the IRS uses for an excuse to actually attempt to enforce income tax then we might actually be able to work out of this horrible set of economic policies.

The biggest losers in all this are the Democrats, which makes this an especially smart move on Bush�s part. The Democratic Party wielded the tax code in such a way as to retain and reward their power base, much more so than the Republicans. If you disagree, please compare domestic entitlement spending to defense spending. The one dwarfs the other by orders of magnitude.

Now the Democrats will try to oppose this change but they are sitting on the wrong side of the issue (once again). Disposing of Income and Social Security taxes and most of the IRS is a very appealing idea for the average American. This is an issue they can relate to. It puts a mighty big club in the hands of the Republicans and Bush in particular.

Since Dems have some VERY critical elections in less than 2 years they have a tough choice. Support these bureaucracies and take a pounding by the Republicans come election time or support the tax code changes and take a pounding by their own constituents. If they support the tax code change then they give the issue to Republicans, if they oppose it they risk facing the wrath of the voters.

Bush is VERY clever to tackle this issue and the Democratic Party is in a lot of trouble over it. Wow....the man is bolder than I would have given him credit for.

Originally posted by edsinger
I like the idea personally, maybe some tweaking but the IRS has to go, to much bloat and not enough anything. Accountants will be out of work though, lots of them!

Hmm....

...can anyone explain to me how the IRS(Internal Revenue Service) would somehow not become the NSRS(National Sales Revenue Service)?

OR "Who else would make certain that people actually paided the correct sales tax?"

And wouldn't this just lead to alot of people going to Canada to get cars and stuff, like they do now to get cheaper drugs....

"They are going to send a monthly check to all low income families to compensate for the rise in basic necessities. No filing each month, just a one time proof that you make under X amount (with X being debated now) then they send you a check each month."

Yes, but are they going to have to pay the tax, before they can get the rebate?

Why not just make those essentials non-taxable to begin with?
Hey, I could actually get out of this without paying any tax, since our income never seems to meet the essentials, we don't buy those nonessential items, like clothing, warm winter coats and boots, ect.....

abolish the tax and watch the national infrastructure collapse.

The money has to come from somewhere