TAXES: Will the Republicans abolish the IRS?

Bleys, the Secretary of Treasury you speak of is based in Puerto Rico, the full title being the Secretary of Treasury of Puerto Rico. His post is based in Puerto Rico and not the corporation limits in Washington DC. That is why we also have a United States Treasurer.

But, it is futile to debate the legality of the IRS, after all we cannot expect courts under the control of the United States Corporation to rule in favor of that which takes money out of the Unites States' pocket. And then if they did rule in favor, everyone would be doing it!

But back to the point...Another question I have is how do we determine what we should tax with business and what we shouldn't. If this Act is claiming that all business expenses should not be taxed, then I have a problem.

From Fair Tax Act Text:

`(b) BUSINESS PURPOSES- For purposes of this section, the term `purchased for a business purpose in a trade or business' means purchased by a person engaged in a trade or business and used in that trade or business--

`(1) for resale,

`(2) to produce, provide, render, or sell taxable property or services, or

`(3) in furtherance of other bona fide business purposes.

`(c) INVESTMENT PURPOSES- For purposes of this section, the term `purchased for an investment purpose' means property purchased exclusively for purposes of appreciation or the production of income but not entailing more than minor personal efforts.

What will stop "business property" from ending up in the homes of employess and owners? What if the house of the business owner is termed "business property"?

There are many ways for the rich to get around this tax and ultimately the poor will suffer once again.

Originally posted by phreak_of_nature

I think sales taxes should be left to fund the states. The federal government has gotten to large to begin with. Instead of figuring out how to provide them with enough money to mantain the current level of bloat, we should look at how to downsize the federal government.

I couldn't agree more... The problem with this great idea is that many people especially on the left believe more taxes stimulate the economy, and programs need to be designed to help everybody. Like everybody needs a hand out and everybody should be relying on the hard workers of society.
This is not the right thing to do. You don't reward bad behaviour with financial handouts. look what happened... All you have to do is look at the inner cities of America.
If you go your own way, do your own thing, try and make it on your own, there should be no problem. You reward yourself, you don't wait for someone to give you things. Sure it's nice to have but that's what christmas and birthday's are for...

professional politicians from the other parties just want more of your money, and are busy increasing the size of government.

In the last few decades, the federal government has exploded in size. No area of your life or business is free from the meddling of politicians -- especially your wallet.

It doesn't have to be that way. With less government and lower taxes, you could keep more of what you earn. It would be easier to start new businesses, build new homes, and fuel stronger economic growth.
source:lp.org

Every politician who stands on the left and right enjoy shaking your pockets.
America wasn't founded on a socialist philosophy.
I believe if people wish to live in a socialist/communist society, pack your bags and get on a plane. Oh but wait, it's not the same. People like that would rather push their ideology on others... If you wish to be successful in life you need to hook up with a party that wants you also to be successful, and that doesn't include taking your money and spoonfeeding you dung making you believe you need to rely on government assistance in order to be successful.
Trust the lp because they trust you to run your own life.

"How do you know it's election time?" muses Libertarian presidential candidate Michael Badnarik. "The Republicans are babbling about eliminating the IRS again. Give me a break."




Here is the Libertarians reply to the Republicans plan

www.badnarik.org...

[edit on 4-8-2004 by Amuk]

Injustice: The left and the right are participants in this and are wrecking the countries future.

When change doesn't happen especially now, it will only make it harder and worse in the future. Injustice

Pertaining to the IRS:

injustice refers to what violates the rights of an individual or adversely affects the public welfare:

[edit on 4-8-2004 by TrueLies]

Several comprehensive studies of a national sales tax have been done since the mid 90's. One of the best explaining most elements is this one from the CATO Institute.

Emancipating America From the Income Tax

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 flat-rate tax on the purchase of final goods and services at the retail level. Fifteen percent would be the tax-inclusive rate. In other words, an 85 cent item would require a 15 cent sales tax and cost a total of $1 including tax. Even making the unrealistically adverse assumption that a low-rate NST would have no significant impact on economic growth rates, compliance costs, federal spending on social programs, or federal borrowing costs, a 15 percent national sales tax would provide more than sufficient tax receipts for revenue neutrality while exempting expenditures below the poverty level from tax. The plan should allow for a rebate to all households on their purchases up to the poverty level--thus exempting low-income households from the tax and allowing all taxpayers to purchase the necessities of life tax-free. To protect against "cascading" effects--imposing multiple levels of taxation on the same product--the sales tax would exempt from tax inputs at each intermediate stage of production.

This analysis addresses many common questions about the national sales tax: What will be the tax base? How will the tax be administered? How will the tax be enforced? It also highlights how the NST proposal disposes of several problems commonly associated with alternative taxing schemes and proposes remedies for some of the problems peculiar to the sales tax. For example: How does the tax treat used property or "old capital" that was purchased with after-income-tax income? How does the tax treat financial intermediation services? Government services? Not-for-profit organizations? Finally, our analysis discusses some of the equity issues that arise when a tax system based on income is replaced with one based on consumption

Cato's study done in 1997 might require some updating of its base figures to account for inflation but I believe this is a good blueprint for Hastert's initiative to be proposed in a future congress.

I also think one of the major issues missed by posters on this thread is the effect that this tax would have on personal savings and investments by the middle class, always a perrenial political issue when debt and savings are compared in the current economic climate.

To me this would enhance my impetus to save more and spend less on credit simply because of my natural desire not to pay any more tax than absolutly required.

I do agree that a limit must be in place as to how much the government can tax us. A limit based on an absolute percentage would be best.

State income taxes must also be addressed at the same time, confiscatory income taxes in some states have led to economic depression and business flight to states with low or no income taxes.

The field needs to be levelled in this respect for all americans to benefit from this type of tax reform.

Can't see where this candidate cross talk got posted yet, if at all.

I laughed hard.

Won't Get Fooled Again!

LIBERTARIAN DISMISSES HASTERT TAX PLAN
Austin, TX -- "How do you know it's election time?" muses Libertarian presidential candidate Michael Badnarik. "The Republicans are babbling about eliminating the IRS again. Give me a break."
(continued)

Originally posted by RANT
Can't see where this candidate cross talk got posted yet, if at all.

I laughed hard.

Won't Get Fooled Again!

LIBERTARIAN DISMISSES HASTERT TAX PLAN
Austin, TX -- "How do you know it's election time?" muses Libertarian presidential candidate Michael Badnarik. "The Republicans are babbling about eliminating the IRS again. Give me a break."
(continued)

Try looking three posts up

I am an accountant, and I certainly believe the tax system needs some changes, trust me. Anyone who has ever filled out a Form 1040 with itemized deductions in recent years will no doubt agree. Without up-to-date software, it's virtually impossible to sort out the regulations, and to determine exactly what is legal (as practically all of the regs have an infibite number of exceptions, which lead to other regs also with as many exceptions). It's enough to make to a number cruncher wish he'd studied medicine instead.

That being said, I am completely opposed to the elimination of the FIT in favor of some sort of federal sales tax or flat tax.

A federal sales tax would pose several important problems, all of them directed to the middle and lower classes. First, it would eliminate the annual refund, which most middle and lower class families receive due to overpayment. As it currently stands, families may deduct savings for children's education, IRA retirement programs, etc. With a sales tax, this would be impossible.

In order to fund public services (police, firefighters, libraries, Social Security, highway repair, etc.), the price of consumer goods would skyrocket. This would benefit the wealthiest Americans, whose tax payments would be less. But married couples who gross jointly less than $100,000 per year, or single persons who gross less than $50,000 per year, would fill the squeeze very quickly.

The same argument can be used against a flat tax. With a 17% flat tax (which has been proposed several times in recent years), the wealthiest Americans would pay less, the higher middle class would pay the same, and the burden of higher taxes would once again fall upon the lower middle class and the working poor.

It is very possible to reform the system we already have, while both protecting our nation's social interests and our taxpayers, without burdening those who need their earnings the most: that growing fraction of Americans who survive paycheck to paycheck. To do this, we need a president and Congress who understands the nation's needs for the long run, not one who brings up these issues in an election year just to get votes.

ML, you are probably correct there. We are so entrenched in the current system, I wonder if even a perfect replacement would fix what's wrong with the IRS.

But, the Tax Code, surely it doens't need to morph into ever larger and more complex volumes??? Surely, all those loopholes are not needed. I don't want to put accountants out of work, at least not yet , but we could do with a smaller, gentler, kinder, FAIRER IRS.
Take my word for it, if the IRS makes a mistake, and goes after you wrongly, it is near impossible to change their bureaucratic "minds" and clear your record. And, that is very wrong.

Originally posted by Masonic LightA federal sales tax would pose several important problems, all of them directed to the middle and lower classes. First, it would eliminate the annual refund, which most middle and lower class families receive due to overpayment. As it currently stands, families may deduct savings for children's education, IRA retirement programs, etc. With a sales tax, this would be impossible.

If you read the proposal above you would see that an annual refund could be setup. In fact it would be set at the poverty level so everyone would recieve back everything they paid into VAT up to the level set as the poverty level. Only those purchases over that amount would be claimed as taxes by the government. This would in fact allow those families in the low or medium income brackets to recoop a great deal of their VAT at the end of the year. It would only be the richest with the highest purchases for the year that would loose out.

In order to fund public services (police, firefighters, libraries, Social Security, highway repair, etc.), the price of consumer goods would skyrocket. This would benefit the wealthiest Americans, whose tax payments would be less. But married couples who gross jointly less than $100,000 per year, or single persons who gross less than $50,000 per year, would fill the squeeze very quickly.

Exactly backwards from the truth. The wealthiest with the most expesnive habits would pay the most tax. The poorest and those below the poverty line would in fact get back their entire VAT payments at the end of the year. The price of consumer goods would stay pretty much where they are now, fluctuations would be expected as the scheme begins but it should level out as the market adjusts.

The same argument can be used against a flat tax. With a 17% flat tax (which has been proposed several times in recent years), the wealthiest Americans would pay less, the higher middle class would pay the same, and the burden of higher taxes would once again fall upon the lower middle class and the working poor.

Now if we are talking about a true flat tax then I would love for you to explain this statement? A man making 20,000 this year would pay 3400 in taxes. A man making 2,000,000 this year would pay 340,000. How do you get that the rich would pay less and the burden would fall on the poor?

It is very possible to reform the system we already have, while both protecting our nation's social interests and our taxpayers, without burdening those who need their earnings the most: that growing fraction of Americans who survive paycheck to paycheck. To do this, we need a president and Congress who understands the nation's needs for the long run, not one who brings up these issues in an election year just to get votes .

Again one of the VAT proposals actually gives back everything up to the poverty line so that the poor pay no tax, the middle class pay some tax and the rich pay a bit more.

- Was

Originally posted by Wassabi
If you read the proposal above you would see that an annual refund could be setup. In fact it would be set at the poverty level so everyone would recieve back everything they paid into VAT up to the level set as the poverty level. Only those purchases over that amount would be claimed as taxes by the government. This would in fact allow those families in the low or medium income brackets to recoop a great deal of their VAT at the end of the year. It would only be the richest with the highest purchases for the year that would loose out.

Hypothetically, a system could be established to allow what you've proposed above, but it seems to me that it would defeat the purpose. You would still need an organization to regulate such things, and in the end, you would just be replacing one bureaucracy with another...an "Internal Consumption Tax Service" or something to that effect, who would fill the void of an eliminated IRS.
But this also shows a contradiction within the proposal itself, since, as you apparently agree, an individual's income must be taken into account (at least in regards to refunds). And the IRS already does that. My only criticism is that I believe it can be simplified.

Exactly backwards from the truth. The wealthiest with the most expesnive habits would pay the most tax. The poorest and those below the poverty line would in fact get back their entire VAT payments at the end of the year. The price of consumer goods would stay pretty much where they are now, fluctuations would be expected as the scheme begins but it should level out as the market adjusts.

It is true that more expensive items would carry the most taxes per item, but there is a fallacy in this reasoning, namely that it does not compare total taxes paid under a federal sales tax with that of the current income tax.
The current income tax is progressive, and tax percentages increase at set levels of income. Without a system regulated by the consideration of income, an individual's livelihood (as determined by how much he or she makes, and can support his or her family on) is ignored.
This would create huge loopholes for the most wealthy, who could easily purchase anything they wanted from Canada, or any other foreign nation, and skip the tax process. But even if they chose to purchase American out of a sense of patriotism, they would pay less in comparison to what they pay now, and this loss has to made up somewhere.

Now if we are talking about a true flat tax then I would love for you to explain this statement? A man making 20,000 this year would pay 3400 in taxes. A man making 2,000,000 this year would pay 340,000. How do you get that the rich would pay less and the burden would fall on the poor?

As it currently stands, a man who makes $20,000 and files as single would owe $2,650 in federal income taxes, at least as of last Dec. 31 (which is 10% of the first $7000 plus 15% of income in excess of that, being less than $28,400, which begins a new bracket). A single taxpayer who made $2,000,000 would owe $681,332 (this belongs in the 35% bracket of income in excess of $311,950 plus the $90,514.50 carried over from lower brackets).

With a 17% flat tax, the taxpayer who makes $20,000 would pay $3,400 in federal income taxes and the taxpayer who makes $2,000,000 would pay $340,000. Therefore, the 2 million dollar guy has a tax cut of $341,332, while the guy who is struggling to make ends meet on $20,000 per year has his taxes raised by $750. This tax raise would hit working families who file jointly especially hard, assuming that the couple grossly joints less than $50,000.
Seeing that most people earn only enough to be considered in the first three brackets, which max out at $68,800, the vast majority of Americans would suffer a tax increase by a flat tax, while the most wealthy would have their taxes cut almost in half (as we've seen above).



[edit on 13-8-2004 by Masonic Light]

As it currently stands, a man who makes $20,000 and files as single would owe $2,650 in federal income taxes, at least as of last Dec. 31 (which is 10% of the first $7000 plus 15% of income in excess of that, being less than $28,400, which begins a new bracket). A single taxpayer who made $2,000,000 would owe $681,332 (this belongs in the 35% bracket of income in excess of $311,950 plus the $90,514.50 carried over from lower brackets).

With a 17% flat tax, the taxpayer who makes $20,000 would pay $3,400 in federal income taxes and the taxpayer who makes $2,000,000 would pay $340,000. Therefore, the 2 million dollar guy has a tax cut of $341,332, while the guy who is struggling to make ends meet on $20,000 per year has his taxes raised by $750. This tax raise would hit working families who file jointly especially hard, assuming that the couple grossly joints less than $50,000.

Seeing that most people earn only enough to be considered in the first three brackets, which max out at $68,800, the vast majority of Americans would suffer a tax increase by a flat tax, while the most wealthy would have their taxes cut almost in half (as we've seen above).

Yes I can see where you are coming from on the wealthiest getting a huge tax break. However the lower and middle class would be better off too. You forgot about the poverty line clause. All of these people would get that money back. The 2003 threshold for one individual under age 65 is $9,573, whereas for an individual 65 or over it is $8,825. In our comparisons...

The taxpayer who makes $20,000 would pay $3,400 - 9573 for a tax refund of $6173 as opposed to paying $2.650 as it stands now. The millionare would only get the same $9573. Would the rich pay less taxes? Yes. Would the lower and middle classes pay more? No, because they would be guaranteed to get back the first 10k they spent in taxes each year. The amount that this helps them is directly proportional to their income level. 10k is nothing to the millionare but is half or 20k guys salary.

You make a good point about Losses must be made up somewhere, but you fail to realize we are talking about a % of everything bought. House sales, car sales, chewing gum sales, internet sales, buying stuff from abroad would go through customs who would have to get the % from you before delivery. The only things that would be exempt would most likely be business and manufacturing purchases and non-profit organizations. Perhaps food stuffs would also be exempt.

- Was

I haven't studied the proposal in depth; I see what you're saying, but IMO, the negatives would outweigh the positives. Apparently, this is the majority opinion also in the Republican camp; I've just read an article on a news site quoting Republican leaders, who are voicing their disapproval at Bush's mentioning it (although, just for the record, Bush hasn't endorsed, but only said it should be "studied").

The two major problems, from my point of view, are the deficit and the current struggles faced by working families in making ends meet.

All of our current national spending is deficit spending. Regardless of whether we support or don't support the current administration's war efforts in Iraq, we all can agree that we're spending billions on the military effort alone. This along with Bush's earlier tax cuts have placed us in a position of massive financial liability.

My problem with the Bush administration concening all this is that they are aware we are going broke quickly, but are willing to ignore it if they can grab a few votes. Throughout history, every administration during war has recognized the necessity of income tax to pay for it...even George H.W. Bush, a man I never voted for nor would ever vote for, understood the fact that if you spend money, you have to have money, and raised taxes to finance Desert Storm.

It appears to me that Bush, who personally has always had money handed to him for whatever he wanted, seems to think that his applies to all Americans, including the National Treasury, and thus lives in sort of a fantasy la-la land where money is never a real issue.

With the deficit (which is now the largest in the history of the world in any country), the fact remains that someone is going to have to ante up. Personally, I think this should be paid, for the most part, by taxes generated from Bush's corporated colleagues, who are making millions through contracting in Iraq, and have backed Bush every step of the way. I do not think that additional taxes should be levied upon the middle class and working poor in order to pay for it; if Bush is re-elected, we can rest assured they will stick it to the working man, whether by eliminating the IRS, changing to a flat tax, or simply giving more tax breaks to corporations who outsource jobs while raising the tax percentages on lower income brackets. In the end, whether we like it or not, somebody's going to have to pay.

If Senator John Kerry is elected President, he will protect the middle class and working poor. He has a plan to cut taxes for 98% of Americans and small businesses, while abolishing the Bush tax cuts for the wealthiest 2%. He will initiate tax penalties for corporations who move jobs overseas for the purpose of paying poverrty-level wages, and will reach out to our allies in a way Bush is no longer able to do, to assist in bringing an end to the Iraqi conflict which is costing us immensely, in not only dollars but lives. His plan will reduce the deficit in half by the end of his first term.

I recommend everyone visit Kerry's webpage on economics and tax reform, please be sure and download the "Reform The Tax Code" .pdf file.

www.johnkerry.com...



[edit on 14-8-2004 by Masonic Light]

Please note that we haven't even discussed anything but personal income tax, which in my opinion is too high wether the Republicans or Democrats are running things. Compared to corporate income taxes and tarrifs the combined might of the income tax system is just as easy to simplify and give back to the people who work for the money.

I would also recommend removing all tax breaks for Corporations that are found to be moving jobs over seas or better yet tax holdings of all Corporations doing business in the United States no matter their location. Now this seems rather a silly idea, until you realize that American Citizens living outside the United States are still expected to pay taxes.

- Was

Which is it, Wassabi, more tax incentives for countries moving jobs offshore...or removing all tax breaks for companies moving jobs off shore...it can't be both ways.

Originally posted by Wassabi
I would also recommend removing all tax breaks for Corporations that are found to be moving jobs over seas or better yet tax holdings of all Corporations doing business in the United States no matter their location.

Originally posted by Wassabi
Instead I would propose that hefty tax incentives be given to corporations and companies willing to start up simple manufacturing business' or agricultural coops in these countries. Nothing that requires a lot of education but there is a lot of mindless manufacturing jobs that could be relocated to these problem areas. Introducing Industry would help with the problems of unemployment and require the companies involved to work on the infrastructure of these countries to better move and create goods to be exported.
ATS Third World Debt

[edit on 14-8-2004 by DontTreadOnMe]

That was funny, as I did not realize I had contradicted myself, until you pointed it out. Thanks. However, I don't see these two ideas as mutually exclusive.

Tax breaks could still be used for creating low end manufacturing jobs in third world countries but a broader tax program in taxing all foreign as well as domestic business transactions of companies that do business in the United States.

- Was