POLITICS: US Federal Sales Tax in the Works

Woh now -

So I work hard and make a mil, or maybe a start a company and pocket 250 million when I sell it. Care to tell me why I should give the money I've toiled so hard to make to the feds so it can be redistributed to the slackers that don't want to work hard??

Wait - also explain why my gov gives tax breaks for having kids - since when are we running a breeding program?? You want kids - think about your income and pay for them yourself and quit sponging off my dime....

Flat tax - simple and fair and if computed against earnings with no loopholes, corp or otherwise, then it is completely fair. Fine you want really fair - step it in at 1% per $10,000 income - with $0-10,000 = 0 up to a max of 20% at $200,000. Everyone pays their share except at the bottom - comes right off the income line with no writeoffs to be had and it seems pretty fair. Only issue is what about business startups or R&D expenses?? Investments - take tax on gains at end of the year every year on value gain of all sales and value of current holdings if still holding - except in IRA's 401k's.

Consumption tax is not too bad - you would make it 0 on groceries and housing and tax the snot out of everything else (back load housing like now - you pay when you sell it). Poor do not need to be eating out or buying lots of fancy stuff and a rich family of 5 will eat the same amount of food as the poor family of 5 - maybe not same brands or quality but the same nonetheless.

One problem as seen with old luxury tax - basically killed off boating industry and big cars for a while with resulting job losses - guess where - the working stiffs... Got to be careful with what you ask for sometime - the people with the dough banked it and were none the worse for wear and the little guy on the production line got the shaft....

Guy I knew summed it up best - he said he wanted to pay 2 mil in taxes because it meant he had made between 5-6 mil and would have 3-4 mil to play with....

Originally posted by SomewhereinBetween

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.

Yea SomewhereinBetween.

A real live expert. You go.

...Your move Phoenix.


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We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
-- Winston Churchill

Cut the spending not raise the taxes. How much BS projects are costing millions that the public is being kept in the dark about? All those projects that are classified due to national security. I think it is quite easy to pocket some tax dollars if you are conducting secret government funded projects.

Keep the rich rich, and the poor poor. This is how the corporate world keeps us digging ditches while they light their cigars with 20 dollar bills.

Originally posted by Umbrax

Cut the spending not raise the taxes.

Now there's a thought. Why didn't I think of that? Oh wait. I did. So did a bunch of other people. But Bush has the checkbook. Rats. Foiled again.

How much BS projects are costing millions that the public is being kept in the dark about? All those projects that are classified due to national security. I think it is quite easy to pocket some tax dollars if you are conducting secret government funded projects.

And that's a GOOD question. Research project anyone?


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Originally posted by SomewhereinBetween
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?

I'm not the one trying to mix rotten apples with perfectly good oranges here - there is no confusion nor contradiction other than your mix up between what a VAT is and what a Consumption tax is.

VAT

Should the United States enact a VAT? The tax has the same advantages that retail sales taxes have over the income tax: lower compliance costs, favorable treatment of savings and investment, and improved U.S. business competitiveness. The difference is administrative — VATs are collected at each state of production, while sales taxes are collected only at the final purchase.

There are dangers to the tax. For one thing, most VAT supporters see it as an add-on to existing taxes. The Treasury study, completed for former secretary Paul O'Neill, included one proposal that would retain the corporate tax, retain the individual income tax for families earning over $100,000, and impose a 15 percent VAT. That is a dreadful option because the economy would be burdened with a new VAT infrastructure on top of the most inefficient parts of the existing income tax

VAT Caveats

VAT while better than Income Tax is insidious because of its promotion of government spending through seemingly small increase over a broad spectrum of the economy.

VAT also constitutes multiple taxation on the same finished product as it moves through various stages of production.

Consumption Tax

The current U.S. income tax system suffers from a multitude of defects that are well recognized by those who have to comply with the tax code each year. A major objective of the NST plan is to fix those deficiencies. For example, an NST should promote higher rates of economic growth by dramatically reducing the tax bias against work, savings, and investment. The marginal tax rate on consumed income that workers and investors face would be much lower, and the return on savings and investment would not be taxed until spent. Moreover, an NST would reduce economically inefficient distortions in the pattern of investments that are now dictated largely by tax shelters, deductions, and special-interest loopholes.

A properly constructed NST plan would replace all of the revenue from the individual and corporate income tax, transfer taxes, and most non-trust-fund excise taxes with a single 15 percent(now higher since the article was written in 1997) flat-rate tax on the purchase of final goods and services at the retail level.

Emancipating America From Income Tax


First Income Tax - 1812
President James Monroe - Republican (Liberals of their day)

Repealed 1817

Second Income Tax - 1862
President Abraham Lincoln - Republican (Liberal who emancipated slaves over severe objection by southern conservative democrats)

Repealed 1872

Third Income Tax - 1894
President Grover Cleveland - Democrat

Repealed 1895

Fourth Income Tax - 1913
President Woodrow Wilson - Democrat

SomewhereinBetween,

Your statement;

The latter has to do with conservative legislation, the former, oh wait...the conservatives also.

Concerning conservatism and income taxes appears to be far from reality.


Phoenix

Yea Phoenix.

A real life go getter. No real life expert needed or required. You go.

...Your move SomewhereinBetween.





seekerof

[edit on 8-3-2005 by Seekerof]

Originally posted by PhoenixI'm not the one trying to mix rotten apples with perfectly good oranges here - there is no confusion nor contradiction other than your mix up between what a VAT is and what a Consumption tax is.

I was beginning to think you went AWOL. And really? What exactly are the differences between a value added tax and a consumption tax, please enlighten me. I am more than happy to give you credit for the nuances of terms between countries, but I will be sure to be very tough on you as you describe the end result.

VAT Should the United States enact a VAT? The tax has the same advantages that retail sales taxes have over the income tax: lower compliance costs, favorable treatment of savings and investment, etc. etc...

Are these words yours or someone else's Phoenix? Further, since I already know the answer and because it is representaive of someone else's interpretation, I am going to heighten your stress, and ask you to explain to me the difference on a federal level the ST and VAT or Bush tax or whatever Bush chooses to call it as proposed, on shall we say, a computer?

There are dangers to the tax. For one thing, most VAT supporters see it as an add-on to existing taxes.

How so? I want you to post your own fears on this board, so how so?

The Treasury study, completed for former secretary Paul O'Neill, included one proposal that would retain the corporate tax, retain the individual income tax for families earning over $100,000, and impose a 15 percent VAT. That is a dreadful option because the economy would be burdened with a new VAT infrastructure on top of the most inefficient parts of the existing income tax

Ah! The Canadian sysytem as I mentioned. See? you are coming around already.

VAT while better than Income Tax is insidious because of its promotion of government spending through seemingly small increase over a broad spectrum of the economy.

So you are against a VAT? What is your government proposing that is different?

VAT also constitutes multiple taxation on the same finished product as it moves through various stages of production.

Wrong! The VAT is an end-user tax.

Consumption Tax

As would this, but then you have answers to supply that is not propaganda as per:

... For example, an NST should promote higher rates of economic growth by dramatically reducing the tax bias against work, savings, and investment....

If you want to present the propaganda from others then I want you to provide a reconciliation using the television as per above, with your plagiaristic statement, in terms of dollars and cents.

The marginal tax rate on consumed income that workers and investors face would be much lower, and the return on savings and investment would not be taxed until spent. Moreover, an NST would reduce economically inefficient distortions in the pattern of investments that are now dictated largely by tax shelters, deductions, and special-interest loopholes.

A properly constructed NST plan would replace all of the revenue from the individual and corporate income tax, transfer taxes, and most non-trust-fund excise taxes with a single 15 percent(now higher since the article was written in 1997) flat-rate tax on the purchase of final goods and services at the retail level.

Once more, if I wanted to sell you anything at all, I would not be flaunting the negatives, and would certainly be telling you what I want you to know. The reconciliatin please?

You have many answers I expect are forthcoming as per your own analyses, not the claptrap of others.

First Income Tax - 1812
President James Monroe - Republican (Liberals of their day)

isn't that nice? I mean truly, that is so sweet that you hunted this up. Now please address the present.

Facts, and numbers of their own is what I expect of those making claims without support, Phoenix. You made many, now show me how you arrive at your analyses.



[edit on 3/8/05 by SomewhereinBetween]

Originally posted by SomewhereinBetween

I was beginning to think you went AWOL. And really? What exactly are the differences between a value added tax and a consumption tax, please enlighten me. I am more than happy to give you credit for the nuances of terms between countries, but I will be sure to be very tough on you as you describe the end result.

Not AWOL at all - just extremely busy in the real world.

A use for your time if I may suggest, would be to review carefully the responses I've already made. There you will find answers to a majority of the questions you have posed.

The apparent lack of reading/linking to information already posted is having the effect of diminishing your expert status in my humble opinion, others may begin to feel the same after repeated questions where the answer lies in the preceeding posts.

As I find time I will of course be very happy to answer questions where the answer does not already exist within the body of this thread.

Off to work, look forward to further posting by Phoenix soon.



[edit on 9-3-2005 by Phoenix]

Flat tax won't work. It is discriminatory.

How many rolls of toilet paper does a rich person use?
" " poor person?

Pretty close to the same amount. Who can better afford taxes.

let's not have 'don't my my money' rants- if you're rich then you earned it. Someone someplace worked at something that allowed your inate skills to pay you very well. Pay the poor bas&*d back a few bux as you relax and he is still working.

This is one reason so many people stay poor. Ssacrifice pays off. Most poor people can't make it through the month without a 'little reward.'

Most rich people did without for years- most poor people just do.

Don't be so tight.
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Originally posted by PhoenixThe apparent lack of reading/linking to information already posted is having the effect of diminishing your expert status in my humble opinion, others may begin to feel the same after repeated questions where the answer lies in the preceeding posts.

That’s odd, I asked you some questions, the answers to which you had to resort to definitions as provided by other sources, which did not adequately or effectively address the questions posed, and I am teh one with diminishing status?. If such easy to answer questions sent you into such a tizzy looking to create an infantile defense to cover for your lack of knowledge, what will be your recourse if you do decide to attempt answers?

Recalling the questions that confounded you so:

What exactly are the differences between a value added tax and a consumption tax, please enlighten me:
So you are against a VAT? What is your government proposing that is different?

Let's review shall we?

YOU- I'm not the one trying to mix rotten apples with perfectly good oranges here - there is no confusion nor contradiction other than your mix up between what a VAT is and what a Consumption tax is.

Now re-examine my statement to which your inability at understanding what you read leaps to the forefront with your answer:

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

Two distinct statements were made, one to do with the conservatives in Canada, and the other on the VAT. Out of sheer impertinence and your being devoid of interpretive skills you presume to tell me that I confuse the two terms, and pretend to be knowledgeable by having to run to other sources to define that which you have been spouting off about, try obtaining your own knowledge of a subject before you speak on it Phoenix

VATs are collected at each state of production

Well now here begins your education. Lesson no. 1:The VAT is collected at each stage of purchase and sale, not production. It is not passed on to the next stage as it is identified and kept separate from the cost of the good. On the final sale to the ultimate consumer, after all of the relevant costs excluding the previously paid VAT, and markup, the tax is levied for the last time as a separate calculation and is not to be included in the advertised cost of the product or calculated on previously collected VAT. Who pays it then, Phoenix? The final consumer and only the final consumer, it is therefore a consumption tax.

And what does your definition of consumption tax say?

final goods and services at the retail level

Imagine that! Now what exactly was I confused about?

Lesson number 2:

VAT also constitutes multiple taxation on the same finished product as it moves through various stages of production.

As previously stated this is WRONG! There is no multiple taxation as you can see from above. The VAT previously paid is not a multiple taxation, in the tax collected at all stages is at the same rate and must be remitted by every seller at every stage. It is absolutely no different to proposing that flat tax you so endear which too is only on the final sale of the product that includes only natural costs and markup.

That is your reconciliation in a nutshell for you Phoenix, one which you were not capable of thinking through, and as you can plainly see, they are exactly one and the same; a consumption tax with exactly the same tax rate outcome to the final consumer.

I look forward to your future posts as well, for there are many more lessons I know I will need to give you, and we haven’t even gotten to complex issues yet.

I think you were a little hard on Phoenix somewhereinbetween. Sure hope he comes back and finishes this debate tho. There is good information coming out on both sides.

www.idpz.net...

The HR25 "FairTax" bill, will place a 23/30 (inclusive/exclusive) percentage sales tax on retails goods and services. Since we ALREADY pay for factory workers and owners income tax (it MUST be embedded in the retail cost), this new tax will not raise prices at all. History shows when there are three compeditors, prices drop when materiel costs drop, so when the income tax is removed, retail prices will drop due to competition (it always happens), and with this exact same ammount added to the retail price, the price will return right back where it was. Again, prices will NOT rise, no matter what we calculate the embedded tax rate is. The fact that the tax is embedded, means that prices won't rise, when we move the tax from it's embedded state, to HR25, the 23/30 FairTax.

Please please read the FairTax.org website and buy the 200 page book for a better understanding.

HR25 includes equal refunds for every man woman and child (legallly) in the US. A rich family of 4 gets the exact same refund (or rebate, or Prebate) as a poverty level family of four. To the poverty level family, this amount totally "untaxes" them. That is, from a poverty family, Uncle Sam gets absolutely no money, at the end of the year. Since the rich family buys far more than the poverty level family, this little refund, prebate or rebate ammount is near negligible. That is, those that spend high amounts on retail goods and services will "bottom line" pay the entire 23/30 (inclusive/exslusive) ammount. HR25, John Linder's "FairTax" bill is very very progressive, and the dirt poor end up contributing nothing to Uncle Sam. Why would anyone who's poor NOT want the HR25 bill? They won't even fill out paperwork, to live absolutely tax free.

Please please read FairTax.org or the Neal Boortz book on Amazon.com. You can find all the answers to all your questions on teh website or the book, faster than you can write them and I can answer them.

Oh, one more thing, HR25, the 23/30 (inclusive/exclusive) "FairTax" bill will broadcast the enormous bloated budget of Uncle Sam. Nobody will buy anything retail, without getting a receipt that shows what outragious percentage of the purchase moeny, goes to Uncle Sam. Once this amount is "in your face", it'll be easy to vote out porkers, and elect politicians that will cut costs, close entire agencies, and gradually lower the cost of the federal government.

Please please read FairTax.org or the Neal Boortz book on Amazon.com. You can find all the answers to all your questions on teh website or the book, faster than you can write them and I can answer them.

Just had me a thought. Would there be a market for a "FairTax for Dummies" book?

reply to post by soficrow


How about no federal sales tax at all so lets go back like we did before 1913 and collect taxes thru tarriffs. With the flat federal tax the burden of collecting taxes now will be placed on the shoulders of all the businesses in The United States Of America.

We are preprogramed to pay federal taxes when our Constitution says different. You talk about stimulating the economy if everyone working gets to keep what they actually earn. This would eliminate the tax slavery system in place in this country.

Huckabee proved the point about taxes when he left the door open in Arkansas for people to send more money in above and beyond what they have already paid. I believe in the years he had the program in progress the state collected an additional $1,100 dollars in extra tax. So goes the theory on paying more taxes.

No I have not missed the point, we are taxed to death already especially on hidden taxes such as gasoline, telephone, and utilities just to name a few. If you add up all the taxes the average person pays plus hidden taxes you would be looking at almost 50% in taxation.

If the United States Of America goes to a flat National sales tax will the hidden taxes disapear? I do not think so. This will set up the largest black market this country has ever seen remember the rich, which is about 10% control the majority of the wealth.

Also the rich would invest and spend their money overseas instead of America. Your argument will be they already are so who wins. If the Federal government starts to charge a flat tax on transactions on the internet and they will trust me on this. Internet stocks could plummet.

Many will argue that the rich do not pay their fair share in taxes. Go ahead and mess with the rich who create most of the jobs plus control most of the money and see what happens. Rik Riley



[edit on 3-2-2008 by rikriley]

Prices won't rise, because the HR25 23/30 "FairTax" REPLACES the embedded taxes. Taxes are curretly embedded in everything that's bought at the consumer level. Take away those taxes, prices fall. Include the HR25 23/30 "FairTax", and prices return right back to where they were. No change. It's that simple.

HR25 untaxes the poor, so the poor live tax free without even having to wait in lines or fill out paper work

As for the rich might not spending all their money on retail goods, what else can they do with it? Invest it in building new job-providing factories? More power to them!

Haven't we outgrown class envy yet? Why should I care if you make and spend more money than I do? My family's fed. Get over it. In fact, I wish everyone made more money than I do. Then I wouldn't feel the need to support them.

Snow ball's chance in hell? Just like the chance of breaking free of Great Britain, the Berlin wall coming down, and woman getting the right to vote.

You don't have to help. Just don't block the road for those of us who are willing to work.

Read the book. Get educated.

Interesting to see this thread from 3 years ago, now look at the state of our economy, American should get ready for the tax increases that will come eventually when our morons politicians find themselves with no other choice to keep this nation going.