POLITICS: US Federal Sales Tax in the Works

Originally posted by OXmanK
So let me see if I get this right. The taxes will be on only "luxury" items. And we will be able to pay everything? Right...

I just wish we would just do a flat rate taxation. Somewhere in the neighborhood of 10-12 percent of what we earn. It would be far more fair than the above listed system. It would shut up those who currently think the tax code is unfair. Middle Class probably won't be affected that much. And, the poor have had it way too easy for a while. Let them pay ten percent like the rest. Tax exemption does not count. How does that sound?

I have mixed emotions on the idea of a national sales tax. The one major problem I have with it is that on major purchases (house, car, etc), it would be an enormous financial drain on middle and lower income Americans unless there were some type of special rate for those type purchases.

So I, like you, tend to favor a flat income tax system, though I would like to see at least the first $10,000 exempt from taxation, preferrably closer to $15,000 (which is a little over the poverty line).

Next, eliminate ALL payroll deductions and force the people to pay them with a check every quarter. Once people get a good dose of that, they'll demand that the gov't reign in its wild spending ways.

Originally posted by soficrow

Given your criticisms, am I to understand that ATSNN now has an editorial policy requiring all reporters to provide links to BOTH pro-Bush propaganda and critical "liberal" coverage of the issues?

Actually this has not a thing to do with "pro Bush" propaganda as you say and everything to do with with an issue that has been on the table far longer than Bush has been president.

The real issue at hand is one of personal responsibility versus govermental nannyism.

Sure you provided a couple of links that could be called "pro" but IMHO they are "pro-lite" and do not present much fact on the true nature or especially details of the "Fair Tax" as proposed.

At the same time on the "anti" side I feel much "scare" tactic propagange was offered and run with in the presentation of the article.

My criticism is not personal in nature but one of wanting to present to the un-informed reader both sides of the issue by offering fact rather than propaganda such as presented by Rangle or Earth whatever it was site.

I do not consider offering a link to HR 25 as "Bush" propaganda nor do I consider offing links to pro-consumption tax sites that existed well before Bush or Republican politicians broached this long running debate once more.

Fact is what I offered and fact is what I stand by - not scaremongering propaganda.

The Fair Tax plan offers a better solution to this countries inequities than any other plan yet put forward.

The only thing put forward by the liberal/democrat side is negativity and scaremongering in an effort to make sure no change in the current system is made other than a net tax increase providing further control of the uninformed electorate that keeps them in office.

That is my opinion as is my right - as well as it is your right to spew propaganda that that you believe.

soficrow feel free to put whatever bias you want in your stories as is your perogitive - if you make the claim that they are balanced then I to have an opinion which I will offer up for debate.

Originally posted by Ambient Sound
If a rich person buys a house for $1,000,000, they will actually pay $1,200,000. That individual just paid $200,000 in taxes with one single purchase, more than most middle class or poor people will ever pay in their entire lives.

But how often will he pay this? Once a decade maybe if he's the kind of guy who can't stand to stay in one place? I understand that the rich consume a lot, so the numbers seem impressive, but as a percent of their total income the rich consume more than the poor. This makes the tax regressive by nature.

This brings us to the exemption of necessities from the tax. The average person spends MOST of their income on necessities. A good rule of thumb is that a person can afford to pay 1/3 of their income as rent. A lot of places wont rent to you if you don't make 3 times as much as they charge for rent. That right there would theoretically be a 30% writeoff for most of the population. This system effectively suggests then that we give HUGE tax credits to the working and middle classes, tax only a portion of what the wealthy make, and somehow this will support the ultra-liberal spending practices that America has fallen into lately (some would argue out of necessity, but that's really no relevant to the dollar amount.) I'm afraid the math just couldn't work.

Income fills the same functions, plus some. When the working and middle classes consume, that generates income for the corporations and the wealthy, who are taxed on it, thereby causing a slight increase in prices. In addition, the income tax system targets revenue to American companies who export, which would be impossible under a pure consumption tax. I think this is exactly the point though.

Consumption tax is designed to let the a little air out of the US economy and make us net exporters, or closer to it. They want to keep the common man from buying so much and reduce production costs so that America products will be more competitive in Canda, Europe, etc and maybe even Mexico if our currency loses enough value. This all relates to NAFTA. Once America comes down and Mexico comes up a bit, we can start talking about common currency so that North America can counter the threat of oil pricing going over to Euros, among other things.

A tax system based on what you consume rather than what you earn hits the rich right where they can take it.

The rich are being hit well below where they can take it right now, and this would only press that lower still. I used to guard country clubs for a living and believe me I know what I'm talking about. The wealthy in America live in the most digusting wasteful excess you've ever seen. Just for example, when I see a two year old Jaguar with a vicious engine knock and extremely noisy brakes, I know right away that this jerk is trading in for a new car ever two years because he can't maintain the dang things, and he can afford more of a tax burden- it would be good for him. That's the flip side to the ridiculous and extremely offensive inuendos that the poor are fat, lazy and could do with less money for food.

We want to keep them rich. When they buy that $5000 gold-plated umbrella stand for a house they spend two days a year in, they are going to pay an extra $1000 to our rich Uncle Sam for it, and many of those people make purchases like that on a regular basis. It will add up, quickly.

There is no danger of these people ceasing to be rich. That's the first thing I want to underscore here. Number two, no matter how quickly it adds, up, they wouldn't be buying like that if it represented a substantial portion of their income. They buy gold the way I buy chewing gum because the cost as a percent of income is similiar. To argue that consumption tax on the rich will add up quickly in terms of percentage (relative to what they pay now) is like arguing that a chewing gum tax could replace income tax for me.

Me, I don't need things that cost that much so I'm going to pay less taxes, and frankly, I don't care how poor you are, if you weigh 300 pounds, you could probably stand to be paying a little more for food anyhow.

That would be the inuendo I was talking about earlier. I actually would support a "sin tax" on fast food or soda etc, but let's not pretend thats what the consumption tax is about. I have already explained what this tax really does. An explanation that hints that any significant portion of the working class is morbidly obese and can't be trusted with their income is just unspeakably ridiculous, and more than a bit angering to me as a working class man. (and yeah, I'm probably 10 or 20 pounds overweight, and I don't owe you the explanation as to why. Let somebody tell me I can't be trusted with my income because of that and see how many years I spend behind bars for it.)

A consumption tax is the only method that gives the citizen direct control over how much taxes they will pay. The savings gained in not having to hire tax attorneys and accountants will be massive in itself.

That savings goes to the upper middle class who own property and run businesses. Most of the working class just has to buy turbo tax software for 60 bucks, and its deductable.

It is nice that we'll be able to choose how much tax we pay though. We could substantially reduce our tax burden by living in run down homes, eating value-sized over-processed cans of pseudo-food instead of buying actual meat to prepare for our meals. We could buy wear mis-stitched clothing from the factory clearance stores and buy imports instead of American whenever possible. Of course, the most disadvantaged people wouldn't be able to "choose" that benefit. They have to do it already just to get by. I've been there done that, believe me.

With our current tax system, you are basically encouraged to hire someone to help you cheat on your taxes. When the tax code is so complicated that you can't work through it without violating it, that is the end result.

The only reason nobody is going to violate this tax code is because it already lets them off the hook mostly. But don't think there wont be cheating; it's called a black market. Here's how it works. The price of everything in America goes up 20%, America's economy wavers a bit and the dollar loses more ground, and we start exporting. So now I drive up to Canada and I buy all CDs, DVDs, etc that I can lay my greedy little hands on, and I bring them back to the US to sell at a 10% markup for me, but a 10% discount compared to retail in America.

BUT WAIT: NAFTA! They'll use the smuggling as a perfect excuse to standardize currency and taxes, but if we're going to standardize taxes we're going to have to cooperate on expenses to make that logical. Good night Irene... USA? What's that?

Meanwhile the big-timers can still smuggle. They get AK-47s into America from China, you can bet your arse they'll be able to get CDs, whiskey, etc in just the same at a handsome profit on the black market.

What those opposed to it won't admit is that they are opposed to it because with control comes responsibility, and they just don't trust you enough to take responsibility for your own success or failure, or they are the ones profiting from an inequitable system.

I'm opposed to it, and you don't know the first thing about my motives. The difference between a responsibility and a burden is that a responsibility is assumed and a burden is placed upon you. The consumption tax is a burden so long as it applies to necessity items such as food and housing. If it doesn't apply to these things it is not mathematically viable though. The current system isn't much better, but it is stable, and it rewards me for social mobility. If I can manage to purchase a home instead of rent one, that opens up deductions to me; I am encouraged to provide for my family. Under a consumption tax, I am rewarded for renting or buying the smallest cheapest place I possibly can; I am nearly forced to have my family settle for less.

It is good to give Americans the option to assume a responsibility which entails benefits, for example you can have a car instead of using public transportation, but then it is your responsibility to ensure it and pay registration fees. You are for that sort of thing it would seem, and so am I.
It is bad to saddle Americans with a burden which they can only mitigate by skimping on necessities as much as possible. That is how I see what you are supporting, and I am against it.

America is all about excess and extremes these days. How blatantly superficial can you get? How much can you waste and still be able to ignore it? Sucess is measured by how much you can afford to waste on shiny things that serve little or no fuctional purpose at all.

Woah, woah, let's not get to populist here, especially when we are talking about something that is bad for the populous. "Waste" is also known as entertainment, luxury, etc. If you can afford it there is nothing wrong with it. Our goal is not to eliminate luxury from American life and reduce this country to subsistence farming. We are just talking about how to make the tax code as fair as possible to all people. A sales tax, which is regressive in its very nature, does not increase fairness. What it does is remove a great deal of comfort and luxury, especially from the working class. Let's be perfectly clear, when a guy works hard and saves money to earn a luxury, that's OK. He deserves it and it should not be taken from him by a tax code which is designed to discourage such consumption, especially when that tax code is ON TOP OF the income tax code, as Mr. Greenspan is talking about (although even without income tax the sales tax is still less fair than the current system.)

Our current system just maintains this status quo by wrapping it with entire industries designed to perpetuate it and make it too complicated to think about changing. It encouages the wasteful mindset, which in turn contributes to a whole host of other problems.

Wouldn't it make more sense to tighten enforcement of the current system to stop the corruption and cheating and make the upper classes accountable? The current system can be configued with write-offs and such to encourage social mobility. Tax rates can be configued to be flat or progressive, however is warranted (the case for progressive taxation is not to be ignored although it is not really the topic here and now). In many ways the current system is smarter and more effective than a flat tax. If it needs adjustment we can adjust it. Doing away with it isn't the answer.

This is the same mindset that uses 6 gallons of water to dispose of 2 pints of urine, millions of times per day. Think about that for a minute. It's who we are because that is the system we were born into. If we want to change this type of thinking, we need to change the systems that encourage it.

You want me to pee less?
Just messing with you, I think I see what you're actually trying to say. I just respectfully (and very very strongly) disagree.

[edit on 6-3-2005 by The Vagabond]

I am not against a tax reform.

But my problem is this, we have a president that doesn't understand what it means “keeping a budget”.

He has spent our tax payer money for the last 4 years like it was an open check book.

He has increased the government size, he has taken our nation into two invasion and now is supporting those nations with our tax payer money and keeps on borrowing more all the time.

He expects the hard-working American to scarify our wallet, our well being and our children with his budget proposal but it keeps spending never less because it has become like gambling addiction, after all is our own money and not his.

Our country and our families cannot take another four years of big government spending, and then he is making sure that big corporations and profiteers get protections from us the people that have been scarified on this spending insanity.

Somebody has to come out with the money for the big spending and is not the rich and powerful but as usual the hardworking American people.

The American hard working people are the ones being punished by this administration.

It doesn't matter what the government decide we will be the losers as usual.

Originally posted by Phoenix
Yes I am attacking this sourcing, chiefly because there was no balance provided by the author - the gist of this article was a forgone conclusion long before the sourcing was found as back-up to the abject negativity presented here-in as factual information about the consumption tax.

Because they didn't mention the "fair tax" scheme, which has no backing? There's a lot of other alternative schemes out there, and they weren't mentioned either. As I see it, they are only reporting on the ones that have some hope of seeing debate in Congress. Heck, I have a tax scheme as well... but I don't think it's going to be reported on seriously by any news organization.

I noted a lot of problems with the FairTax, including that the whole lump falls on We The People. There's no B2B tax (and they state this specifically)... so that anyone can toddle into a place with a tax number and say they're a business and not get taxed. And big mining operations (which mine but do not manufacture) can sell everything they like without getting hit with a tax.

...and this is fair?

Power companies can sell their electricity to businesses without taxing it, but they can slap a tax on the homeowner or apartment dweller.

Fair?

Really?

Who drafted this -- the lawyers for Engulf & Devour, Inc?

And how can they tell whether an item (quilt, for example) has been sold one time or many times? And in the standard distribution chain (for comic books, say, where the comic book company sells to distributors who sell to jobbers who sell to stores who sell to consumers), who gets hit with the taxes? If it's the comic book company selling to distributors, then the government doesn't get much money. If it's the store selling collectable comics for thousands of times their original price, who gets the tax? No tax?

How in the heck is THAT enforced?

Too many loopholes, IMHO. I can see why it's not being seriously considered.

Originally posted by dawnstar
okay..... the poor, the elderly, the disabled, and well, let's throw some of the ones just too lazy to go out and get a job.....
will they be exept from this tax, or will they be paying also. and, if they are not exempt, will their benefits be increased to help compensate for the tax? And, well, if it is, isn't this like saying we're facing close to a 50% sales tax? since well, not only are we paying for our own purchases, but the also, the increased cost of these programs.

the only way to get out of this is to cut the danged spending!!! increasing the cost of living for the poor and elderly ain't gonna help that much, I don't think.

Dawnstar these are all good questions,

Assuming we're not hoodwinked into a hybride income/sales tax scheme but have in fact a pure consumption tax then the plan has a pre-payment to those under the poverty level as published by Health and Human services.

In effect a check will be issued each month to each family or individual at or under the poverty line before consumption taxes are paid as part of monthly expenditures. The figures I have seen say that many will derive a greater benefit than they now do under the current system of credits.

Having the tax at the retail or consumtion side of the economy removes the "embedded" tax that you now pay on goods and services.

The "embedded" tax is one you do not see or control. Corporate taxation is passed directly to the consumer as an increase in the price of goods and services as a cost of doing business.

Once the embedded tax is removed from consumer goods then market forces come into play reducing the cost of goods corrospondingly.

Look at it this way - Auto company "A" is run by greedy types who want to maximise profits in the wake of tax reform.

Auto company "B"s executives want to increase market share by reducing prices of their product ensuring long term domination of the market.

Which company are you liable to purchase your next car at ?


It is the above method that will quickly reduce pricing on goods and services by natural market forces of competition, there is always someone willing to use any advantage to undercut their competitor.

Those not willing to pass savings will not remain in business for long.


On the flip side when company "A"s executives receive their short-term windfall they are liable to spend it on mansions and airplanes much like Enron types did - only this time they will pay 23% tax on that money unlike the Enron people who paid little if anything.

Corporations are formed by people who consume, under the current system there are enough loopholes that many pay less of a percentage than the median income family - that is unfair (google teresa heinz tax payments).

In the new system there will be no loophole for the expenditures required to maintain the lifestyle of the rich and famous.

Any income saved to avoid paying tax will by available as capitol boosting economic growth and lowering interest rates.

You might say the rich will get richer because they will save or invest their money - true but it does them no good if they can't spend it at some point where it will be captured by the sales tax. Until then we derive a benefit by the capitol market improvement.

So yes the poor will get pre-payment as an exemption - even better they control how it is spent - not the government.

Goods and service pricing will naturally reduce because of market forces automatically offsetting the consumption tax.

One of the rarely mentioned benefits of a consumption tax is foreign income to the federal government derived from tourism and trade which pays only local sales tax if at all. My understanding is that is quite a boon to the national treasury but I do not have that figure at the moment.

Speaking from a Canadian perspective where we like Australia had a value added tax imposed us (on top of income taxes) under the same guise with the same type of sell to convince us it would cost us less, I can safely say most americans have no idea what they are in for.

Despite the claim the cost of goods will be cheaper because the corporations would no longer have to eat the taxes they pay now is not true, since there is no business person worth their salt who would sell a product that did not include all of its costs. Most goods do not actually include a tax since raw materials are generally exempt from tax, and the tax is levied on the finished product.

With the proposed VAT, the consumer ends up being the only tax payer, and on goods and services which previously were tax exempt. I don't know if taxes apply to housing purchases in the US, but with the imposition of the GST in Canada, so too came a whopping 7% tax on new homes and many food items. the tax itself was supposed to have an end of life, but it became such a cash cow that the Federal government refuses to give it up. So in this way the revenue may not actually decline significantly because if the Bill Gates types, but it certainly does bite into the working poor's income.

Perhaps an aussie or two might read this thread and give our American friends some insight into their VAT.

Originally posted by Phoenix

Originally posted by dawnstar

the only way to get out of this is to cut the danged spending!!! increasing the cost of living for the poor and elderly ain't gonna help that much, I don't think.

Assuming we're not hoodwinked into a hybride income/sales tax scheme but have in fact a pure consumption tax then the plan has a pre-payment to those under the poverty level as published by Health and Human services.

In effect a check will be issued each month to each family or individual at or under the poverty line before consumption taxes are paid as part of monthly expenditures.

FYI - This is exactly what Canada and other "socialist" countries with federal sales taxes do. The only difference is that most taxes collected in socialist countries are used to support programs that help the people, like universal health care.

Taxes in the USA just go straight to the corporations, without pretense.

Is that the difference betwen socialism and fascism, leaving the "people" out as the middleman between taxes and corporations?



BTW - Good critiques and discussion everyone.


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Originally posted by Byrd
There's no B2B tax (and they state this specifically)... so that anyone can toddle into a place with a tax number and say they're a business and not get taxed.

...and this is fair?

Yes it is fair - and heres why. When you have B2B taxes who ultimatly foots the bill? - why it is the consumer who pays that bill. Anyone who believes that a tax on business is not ultimatly passed to the consumer needs to get in line for Florida swampland before its all bought up!

Power companies can sell their electricity to businesses without taxing it, but they can slap a tax on the homeowner or apartment dweller.

Fair?

Que? any tax that power companies are charging are either local franchise tax or if they are federal then they go away under a pure consumption tax with a corresponding rate reduction. If the rates do reduce then its up to us to elect local/state politicians that will change the regulatory rules huh?

And how can they tell whether an item (quilt, for example) has been sold one time or many times? And in the standard distribution chain (for comic books, say, where the comic book company sells to distributors who sell to jobbers who sell to stores who sell to consumers), who gets hit with the taxes? If it's the comic book company selling to distributors, then the government doesn't get much money. If it's the store selling collectable comics for thousands of times their original price, who gets the tax? No tax?

How in the heck is THAT enforced?

New products only so that an item is only taxed once (specifically pointed out in HR 25)

The end consumer pays the consumption tax - not the distribution network - to do so would artificially increase the cost of the goods and tax multiple times. (specifically detailed in HR 25)

Competition amongst business will reduce end price offsetting the tax if not completely then substantially. The consumer always goes for the low price, witness walmarts success versus mom and pop.

I really have a hard time relizing peoples opposition to this proposal, it would be boon to the US economy and provide hundreds of thousands if not millions of new jobs as well as give much more economic freedom of decision to the great majority of people - I guess everyone wants to protect their little peice of turf as laid out in the current system - sort of cant see the forest for the trees kind of thing to me.

Phoenix, walmart is outsourcing, their products are now coming from China.

They are after chip labor and then inundating our markets with their chip products.

That is why I support my local commissary over walmart anytime, as usual they target the middle and low income people.

As somewhereinbetween points out above, Canada and other countries have already lived through these arguments - they're a con. Taxes are higher. ...The income tax plus sales tax hybrid is introduced first as part of a "gradual" program - and then the government doesn't let it go.

Re: the "Cash back" promise to poor people - This is exactly what Canada and other "socialist" countries with federal sales taxes do. The only difference is that most taxes collected in socialist countries are used to support programs that help the people, like universal health care.

...But the US is not moving towards more social programs - just higher taxes and fewer social supports - people are even talking about getting rid of public schools too. The extra money all goes straight to corporations without going through 'the people' as a middleman.

RE: "This will cost less in taxes and you will have more money to spend freely with a federal consumption tax."

Question: If that's true, then why bring it in when higher taxes are needed to pay down the out-of-control national debt?

Answer: Because it's NOT true - this will increase tax revenues, which might be used to bring down the debt - but most likely will just support more big government spending.


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[edit on 6-3-2005 by soficrow]

Originally posted by soficrow

FYI - This is exactly what Canada and other "socialist" countries with federal sales taxes do. The only difference is that most taxes collected in socialist countries are used to support programs that help the people, like universal health care.

Taxes in the USA just go straight to the corporations, without pretense.

Is that the difference betwen socialism and fascism, leaving the "people" out as the middleman between taxes and corporations?

BTW - Good critiques and discussion everyone.

I said earliar that I adamently oppose income tax especially with a combination sales tax - specifically because we might end up like Canada, high taxation with little choice. Whats the wait for surgury or an MRI?

Your corporation comment is a natural given your stated position and apparent political bent. America has a long tradition of corporations that has as a whole greatly benefitted her. Maybe its why we have an economic system that even with its problems is the envy of most countries on earth.

Fascism

1. A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism.
2. A political philosophy or movement based on or advocating such a system of government.

# Oppressive, dictatorial control.

Socialism if you remove the dictator and substitute a benign dictatorial government, a state much closer to communism in philophosy than our current form of republican government.

Tax a corporation and you tax the consumer with a hidden tax with no representation.

Originally posted by marg6043
Phoenix, walmart is outsourcing, their products are now coming from China.

They are after chip labor and then inundating our markets with their chip products.

That is why I support my local commissary over walmart anytime, as usual they target the middle and low income people.

Naturely Marg, thats why I used Walmart as an example of competitive force in the market place - the target, low income consumers. the weapon, cheap prices.

I fully agree with others pointing out the dangers of a hybride or combined tax - it is a giant red herring.

But that is no reason to junk the consumption tax as a stand-alone policy. It does however throw weight behind the idea that the true evil is in fact the income tax inself.

Originally posted by Phoenix

America has a long tradition of corporations that has as a whole greatly benefitted her.

The Founding Fathers knew very well that a corporate structure could easily take the role of a monarchy - that's why they wrote the Costitution, Bill of Rights and anti-monopoly legislation.

These warnings were ignored - and now America has a corporate over-government, sometimes called a corporatocracy. This is NOT what America was intended to be - and it's not what most Americans think it actually is.

Maybe its why we have an economic system that even with its problems is the envy of most countries on earth.

Hmmm. Could that be why the USD is taking a nose dive, and even drug cartels don't accept the American dollar any more?

Fascism

1. A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism.

Well, there you have it. Couldn't have said it better myself.

We can clarify a bit further tho. As Mussolini said, communism is when the government controls corporations, fascism is when corporations control the government.


.

Originally posted by Phoenix
Competition amongst business will reduce end price offsetting the tax if not completely then substantially.

I know you'd never guess it, but I'm not always the brightest crayon in the box. You're going to have to explain to me how shifting the point of taxation from my paycheck to the store shelf is going to increase competition. I already buy from whoever is selling at the lowest price.

Of course depending on where exactly this tax is levied (in production or in retail) it's going to either encourage importing (and thus outsourcing of jobs) or it's going to encourage exports, which is all well and good for the companies and even for jobs numbers, but doesn't do much good for prices here in the USA, which is bad for most of us, unless the new jobs it creates are better paid than you would generally expect.

Last but not least, my last memory of a change that was made in the name of what Reagan called "the miracle of the market place" was the deregulation of phone services in California. The price of a payphone call TRIPLED, because it was easier to up the price and squeeze the customer instead of producing more for less to compete for market share.

I could be wrong, but you're gonna have to set me straight in a very sensible text book way. I haven't got a college education in economics, but I do have a functioning head on my shoulders and pay attention to the world around me. So what say you; exactly how is my understanding flawed?

Originally posted by soficrow

The Founding Fathers knew very well that a corporate structure could easily take the role of a monarchy - that's why they wrote the Costitution, Bill of Rights and anti-monopoly legislation.

These warnings were ignored - and now America has a corporate over-government, sometimes called a corporatocracy. This is NOT what America was intended to be - and it's not what most Americans think it actually is.

Hmmm. Could that be why the USD is taking a nose dive, and even drug cartels don't accept the American dollar any more?

We can clarify a bit further tho. As Mussolini said, communism is when the government controls corporations, fascism is when corporations control the government.

soficrow, the bill of rights was written to protect the average citizen from the government and possible excess of ther same cheifly predicated on our experience at the hands of the British monarchy.

Not out of a fear of corporations (can you quote Madison or some such to back-up your claim) The co-operation between government and corporations is sometimes good, sometimes bad - ultimately neither has the ultimate power as you suggest.

If I an not mistaken the anti-monopoly laws come in the late 1800's and/or early 1900's in response to rail and manufacturing concerns - many decades after the constitution was written.

No matter how you might twist fascism to your need to bash, the reality is I am for peoples right to have a choice in how they spend their money. Your stance is dictatorial in that you seem to want to maintain a system where I or anyone else has no choice but to pay taxes at the point of a gun in the amount dictated in order to serve your social needs as you dictate they shall be.

So who's really the fascist here?

Originally posted by The Vagabond

I know you'd never guess it, but I'm not always the brightest crayon in the box. You're going to have to explain to me how shifting the point of taxation from my paycheck to the store shelf is going to increase competition. I already buy from whoever is selling at the lowest price.

Ok as long as we are talking a pure form of the consumption tax that has not been bastardized with some other combination of taxes.

An item at the store cost $10 dollars today. Embedded in that price is the cost of all income, social security and medicare costs that the business and all downstream suppliers paid to get that product to market. IE: mostly labor taxes but also some material tax. For discussion lets say that amount equals 25% or more of the retail price you pay for the item.

Now remove all those taxes prior to your puchase of the item and lower the price to $7.50

Further imagine that no money was witheld from your paycheck so it is higher than it was, you take home more money.

Now you have a choice you did not have before you can buy that $7.50 item and pay the 25% tax for a total or $10 or you can elect not to buy the item and save the $2.50.

The difference is it is a choice that you can make - not one that is made for you.

As I've pointed out there is a prebate for those at the poverty level that will offset the tax for the puchase of neccesities.

Of course depending on where exactly this tax is levied (in production or in retail) it's going to either encourage importing (and thus outsourcing of jobs) or it's going to encourage exports, which is all well and good for the companies and even for jobs numbers, but doesn't do much good for prices here in the USA, which is bad for most of us, unless the new jobs it creates are better paid than you would generally expect.

The expectation is a benefit to domestic production due to the elimination of embedded taxes putting foreign goods at a disadvantage due to their countries tax methods - in some cases it will put US manufactururs on equal footing where subsidies make foreign goods cheaper.

I think competition domestically is still stong enough to force the market down - if a monopoly is created we have laws to deal with that as well as price collusion with the anti-trust laws.

Last but not least, my last memory of a change that was made in the name of what Reagan called "the miracle of the market place" was the deregulation of phone services in California. The price of a payphone call TRIPLED, because it was easier to up the price and squeeze the customer instead of producing more for less to compete for market share.

Yup some things are best left alone, well maybe. Ma Bell was subsidizing home and payphone rates through their monopoly on business rates, business passed this cost through to you the consumer as a hidden cost. Remember nothing is free and the consumer ultimately pays whether it is embedded or not.

I could be wrong, but you're gonna have to set me straight in a very sensible text book way. I haven't got a college education in economics, but I do have a functioning head on my shoulders and pay attention to the world around me. So what say you; exactly how is my understanding flawed?

Its not what I would call flawed - its just the fact that it is hard to imagine the difference when you have a choice in when and how much you pay in taxes rather than being forced to pay no matter your personal circumstances.

As someone in the middle income area I can and do see where I could refrain from spending in order to redeploy the expected benefit were this tax system employed.

I know people that make good money but live under their means so that they can ensure a good retirement who would benefit immensely simply because they already made a consumption choice - currently they are penalized for a choice that if you think about it makes enviromental and economic sense.

Gee maybe I could buy supplimental health insurance with the money that used to be withheld by the government - now would'nt that be good for my children.

Still my choice not yours.

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Bush has been on a 4 year spending spree - and he's taken America from a budget surplus to a $7.7 Trillion dollar national debt. At the same time, he lowered taxes for the rich and eased up on corporate taxes. To make up the difference, he cut funding to benefits for ordinary Americans. But there's still not enough money. And it has to come from somewhere.

STRAIGHT from the SOURCE: The President

And the problem is, in 2018, the (Social Security) system starts losing money. In 2027, it's $200 billion in the hole and it gets bigger every year thereafter.

...we can't pay for the promises we've made - that's the problem.

The proposed federal consumption tax is meant to bring in more money. Out of ordinary Americans' pockets. While it protects the already rich and spurs entrepreneurial activity. It really doesn't take rocket science to figure this one out.

STRAIGHT from the SOURCE: The White House Press Release

...the Treasury Secretary will report back to the President, so that we can move forward on reforming our tax code.

..........

STRAIGHT from the SOURCE: ThePresident

...I believe a simplified tax code will spur entrepreneurial activity.


Also see:

Republican Think Tank: The Institute for Policy Innovation (IPI) on Tax Reform. 2003

The federal consumption tax is a tax grab, just like the Social Security scam is a cash grab. Pure and simple. It will protect Bush's rich corporate buddies and let them off the hook - like all his other legislation - and make ordinary Americans pay for his 4-year spending spree, by ourselves, with no back-up or help.



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Originally posted by PhoenixI said earliar that I adamently oppose income tax especially with a combination sales tax - specifically because we might end up like Canada, high taxation with little choice. Whats the wait for surgury or an MRI?

Well now you are mixing apples with rotten oranges. The latter has to do with conservative legislation, the former, oh wait...the conservatives also.

Watching this debate in the US makes me chuckle, for as surely as those typical conservatives who lash out against Canada's taxation policies speak to the sales tax on goods, those who have visited Canada anyway, do accept the new VAT proposal state side.

Can you conservatives be any more confused than you already are? If you don't like it in Canada, how can you possibly argue for it at home?

Originally posted by PhoenixAn item at the store cost $10 dollars today. Embedded in that price is the cost of all income, social security and medicare costs that the business and all downstream suppliers paid to get that product to market. IE: mostly labor taxes but also some material tax. For discussion lets say that amount equals 25% or more of the retail price you pay for the item.

What exactly are you describing?

Now remove all those taxes prior to your puchase of the item and lower the price to $7.50

Further imagine that no money was witheld from your paycheck so it is higher than it was, you take home more money.

Now you have a choice you did not have before you can buy that $7.50 item and pay the 25% tax for a total or $10 or you can elect not to buy the item and save the $2.50.

The difference is it is a choice that you can make - not one that is made for you.

What exactly are you describing, and what is the correlation between taxes, take home pay, and choice of cost of goods?

As I've pointed out there is a prebate for those at the poverty level that will offset the tax for the puchase of neccesities.

And what is a prebate? And how exactly is this prebate (rebate) offset effective?

I'm tired of asking what already. So maybe you would like to logically try and explain to me your thinking. Now I have never said this before, and purposely shied away from the subjects, but I happen to have 25 years of a finance and economic background, most of which involved international monetary policy. On top of which, my name is found is the annals of Ottawa relative to the debate on the GST. And there is nothing you can tell me about U.S taxation that I cannot correct you on. So please explain your position.