Eliminate Income Tax... Instate 25% National Sales Tax. Problem Solved!

A friend of mine threw me this idea, and it's completely water-tight, as far as I can tell. (Which, I admit, is not too far.) However, we talked about it for some time, and it just made more and more sense.

I will leave the mathematical figuring up to you. However, consider these two points for starters:

Immigrants under this current method may come to our country, take out a loan, and open a business. They can run this business for about five years, dodge their income taxes for about five years and simply pass the business onto a family member to run it the next five years. Under this new proposed structure they would have no loophole to hide in.

Secondly, consider the high-end drug dealers operating in the US. Of course, they aren't paying any taxes on THEIR wares. All that money is drained directly out of the economy. Now, under my friend's idea... those drug dealers wouldn't be paying income tax, but you can BET they'll have to pay their sales tax on those Escalades, boats, jewelery, homes, etc etc...

That is just the tip of the iceberg.

Point is: Eliminate income tax, and create a 25% National Sales Tax, and the economy will improve dramatically. I challenge you to show me the math which will disprove this...

****PLEASE NOTE: This idea would be contingent on items deemed "necessities" to be exempt from sales tax. This includes food, clothing, hygiene products... etc.****

(Admin: feel free to relocate this thread)

does that include the fica social security and medicare they take out of my check too?

Nope sorry it would be a disaster... Don't have time to argue do some research.

Originally posted by BadBoYeed
does that include the fica social security and medicare they take out of my check too?

edit on 3-3-2012 by BadBoYeed because: (no reason given)

Good question.

I'm not the financial visionary here, so I can't say for sure. But... On one hand they are considered income taxes, but on the other hand, they are semi-separate from the federal income tax.

I'll ask him for further info on that question and post ASAP.

Originally posted by hawkiye
Nope sorry it would be a disaster... Don't have time to argue do some research.

Do you say that because people would be outraged at the spike in what they are paying at the registers?

If so, I agree, and when I pointed this out, my friend said that yes: there would be an initial backlash, but people will pay it. And in about a year or two, things would balance out.

The idea has merit.

Someone once said that in order to have a successful revolt on the system, people should just pay taxes once a year. That way, it's not diluted throughout the year.

I think it is a great idea. It'd affect everyone equally.

Brilliant!

Is it a good idea to have literally millions of businesses responsible for collecting the government's funds?
Seems like more than a small opportunity for fraud.

reply to post by Aqualung2012


Short version...a flat national sales ax is inherantly flawed as it adversely affects consumers the less money they make.

The math:

Person A and Person B each purchase a $100 printer

Person a makes $200 a day
Person B makes $100 a day

They each pay $25 intaxes on the printer.

This is 12.5% of person A's income for that day
It is 25% of person B's income for that day

Lower income people also spend a larger portion of their income on taxble sales items, which compounds the problem.

reply to post by beezzer



It doesn't affect everyone equally...see my explanation above

Originally posted by nunya13
reply to post by Aqualung2012

 

Short version...a flat national sales ax is inherantly flawed as it adversely affects consumers the less money they make.

The math:

Person A and Person B each purchase a $100 printer

Person a makes $200 a day
Person B makes $100 a day

They each pay $25 intaxes on the printer.

This is 12.5% of person A's income for that day
It is 25% of person B's income for that day

Lower income people also spend a larger portion of their income on taxble sales items, which compounds the problem.

Okay, well person B cannot afford the printer at that time. The idea would encourage more responsible spending.

I (for this very reason) support a tax exemption on items like groceries and clothing, like MN and other states have.

reply to post by Aqualung2012


A 25% sales tax would not help the economy.. it would help the government. Totally different.

Technically it would hurt the economy, as it would drain far more money out of the economy through taxation away from consumerism (70%+ of our economy) because very few people actually pay more than 25% in Federal Income Tax...

reply to post by nunya13


That's a bald faced lie.

Person A and person B both bought a printer. They both paid a tax on the printer.

Don't want to pay the tax?

Don't buy a printer.

Percentage of income has nothing to do with it. And that's the point. You are taxed on what you consume..

Not that it would ever work in the USA .. our system is F'd up beyond repair.

Originally posted by Rockpuck
reply to post by Aqualung2012

 

A 25% sales tax would not help the economy.. it would help the government. Totally different.

Technically it would hurt the economy, as it would drain far more money out of the economy through taxation away from consumerism (70%+ of our economy) because very few people actually pay more than 25% in Federal Income Tax...

If our government utilized our tax money honestly and efficiently then that would not be true... I suppose my thread should be written "Eliminate Income Tax... Instate 25% National Sales Tax (and elect a completely honest and responsible government). Problem Solved!

Troll, Shill.. or just not listening to everything that is going on. Do you not understand? You are being scammed. No 1 story on ATS now is :

Bankers resignations came ahead of huge unfolding scandal

The Fed prints money for FREE. It is private. Search G Edward Griffin. It never needed your tax money except to control you.

Wake up!

reply to post by Aqualung2012


I simply used those numbers to make the my point easier. Should i have based it on buying a lattee? a 25% sales tax would a person making less who buys a $2 latte will pay in sales tax as a portion of their oncome than a person who makes more and also buys the same $2 latte.

By your logic, people should stop buying lattes so they wont be adversely affected by a sales tax, effectively placing the tax burden on higher income earners which brings us to a situation you are trying to avoid.

To be clear: The government does not serve the people. It does just enough to keep us working for them. I believe that to be the reality...

But ANY of this talk about "what we should do," and "if only it was like this..." ALL of it is dependent on the illusion that our government will not take advantage of it. ALL of it is nearly pointless idealistic fantasizing that plays to the delusion that its the methods; not the Elite which are corrupt.

Its the same model as elections. Oh what a pure and venerable democracy we have established. No, we should all realize by now what a smoke and mirrors circus we all partake in every four years. Tax reform is just one of the acts under the Big-Top.

So, I guess in reality my little thread here is just more BS hopeful "if only" thinking...

One problem that I see is that it will introduce higher likelihood of black market goods.

Will create a cartel of black marketeers...I believe that we would create a situation like in under developed nations..where people are more willing to buy illegal goods because if they do not buy them illegally they can't afford them. They have a choice of illegal or not at all...so they take the risk.

Also..the rich will finds ways to import their goods from other nations and pay no taxes. (Also a black market but with caviar).

Peace

Originally posted by nunya13
reply to post by Aqualung2012

 

I simply used those numbers to make the my point easier. Should i have based it on buying a lattee? a 25% sales tax would a person making less who buys a $2 latte will pay in sales tax as a portion of their oncome than a person who makes more and also buys the same $2 latte.

By your logic, people should stop buying lattes so they wont be adversely affected by a sales tax, effectively placing the tax burden on higher income earners which brings us to a situation you are trying to avoid.

Under this idea, by necessity food and clothing (necessities) would be tax exempt. I don't know about lattes being "necessary," but if they aren't then it is the the task of that individuals critical discretion as to whether or not he/she could budget that luxury.

Under your point: A rich person can afford a yacht. They will pay 25% sales tax. A poor person cannot afford that yacht anyways, so I don't think that person will feel too bad about it.

This DIRECTLY puts a burden on a higher-earning member of society... because they BUY more expensive STUFF, lol.

reply to post by Rockpuck


How is my math a lie?

reply to post by Aqualung2012


So the idea is to get low income earners to stop buying non essential items because they cant afford to pay the sales tax?