posted on Sep, 20 2005 @ 11:25 PM
My concern with a national sales tax is that the corporations would not reduce the price of the product to compensate for the higher sales tax. The
corporation would have to pay any and all sales tax for anything bought to make the product and to run the corporation itself. They would be paying
taxes for everything from machines to office supplies. Then they would price the product to cover those taxes. There would be those who would take any
profits from not having to pay corporate income tax and run.
I do believe there would be some honest corporations who would do as you suggested and lower the cost of the product and hire more employees. Would
there be enough of them that would lower the cost of the products as not to put any extra burden on those who would actually be increasing the amount
of taxes they would have to pay.
It will be hard to convince people who are in the 10% and 15% income bracket, or those who actually recieve a return instead of paying, that it would
be better for them to pay 20-25% in federal sales tax insead of their precieved lower income tax or recieving a tax return.
Also the consumer is looking at state and local sales tacked on to that. If the federal national sales tax was 25% with a state and local sales tax of
7%, I would be looking at 32% total in sales tax. Talk about a tough pill to swallow.
I would not mind at all if the feds did something like a national sales tax or a flat tax across the board somewhere between 10-15%, and made it so
they could not raise that at all in any time in the future once it is implemented.
The income tax I see taken out right now is 12%, and you are right I don't know what other hidden taxes are being taken out on the corporate side
except that the employer has to pull out more social security that I believe is not seen on the check. My family is one of those who does recieve a
tax return. I also realize that a fair tax needs to be implemented without any loopholes for the wealthy.
Let me break this down, I believe there are rich people and then there are wealthy people. The rich live in very nice homes and drives around top
dollar cars with luxuries that they may or may not be able to afford. There are not many loopholes they can use since they mainly work as employees,
self-employed, and possibly small businesses. I would classify these as in 100,000's range possible hitting one million.
The wealthy are those who would be considered super rich are the ones who own the large businesses, corporations, the fortune 500 club where spending
100,000 in a weekend is a drop in the bucket for them. These are the ones who have the most loopholes to take advantage of. They are the ones who can
hire the attornies to find creative ways so they do not have to pay hardly any taxes if any at all.
I would be against any type of tax that would hit small business harder than the current income tax guidelines though. It doesn't take much to break
One other problem I can see if they try to impose a use tax. Sales taxes on a national scale, shouldn't be a problem. It shouldn't matter where the
people live, since the same tax will be collected no matter what. If they try to impose some type of use tax, it will create nightmares for the IRS
(might not be a bad thing), because no one reports use tax now as it is. Or they will have to develop a system where stores and others can collect the
correct taxes, and send it to the correct places. Either way including any type of use tax is logistically nightmarish.
Have they thought about dealing with under the table deals especially on services. Many could report just enough to make it look good, while agreeing
with other customers not to report anything. Some offering their services can say the tax in included in the fee, and then not report any taxes at
all. This could be done with gardeners, house cleaners, beauticians, contractors, and just about any service performed. The service industry could
create a very large tax advoidance segiment in society. There are already people doing under the table work, and that will get worse.
There will be a hard hit group of people. Those who sell antiques and second hand goods for a living like my parents do. They will not get any breaks
or be able to reduce the price of what they are selling. They do not have any unseen taxes they could save on. They will have to add the new tax on
top of the price of the item. That would turn away many of their customers. The only thing that would help them is the people's buying power going up
enough to afford the extra 20% in sales tax. People's buying power going up will be very ify. Corporations could just get greedier or other expenses
crop up where they can't reduce the price of the product. Any offset may actually not be enough to give people any more buying power, or at least not
as much as you think.