National sales tax: Pros and cons?

iVillage Member
Registered: 03-29-2003
National sales tax: Pros and cons?
44
Tue, 09-07-2004 - 10:49pm
I'm curious what everyone's opinion is on replacing our current tax code with a national sales tax.

I admit that I have not yet taken the time to do a lot of research on the pros and cons, but it sure sounds good to me so far.

One of my biggest beefs with the current tax code is that it penalizes higher earners just because they earn more. Not a good way to encourage productivity and self-reliability.

And it allows a lot of loopholes and uncollected taxes. A national sales tax might actually collect more taxes since fewer things could be hidden.

The main argument I can think of against it is that it would hurt the poor. But if clothing and food items were exempt (as they are in some states already), that should take away that argument.

What do you all think?

Carrie

 

 

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iVillage Member
Registered: 05-18-2004
Wed, 09-08-2004 - 3:28pm
"What I'd like to see, if we continue under the current tax code, is a repeal of the witholding laws. If every individual was made to write a check out to the government to pay their yearly taxes I think the masses would demand a lot more accountability for the money they are require to fork over to the beurocrats"

I couldn't agree more. If everyone wrote that check and saw what they were paying they would be concerned with all this government bloat.

It amazes me, I ask people, what is your car payment, house payment, phone bill, utilities and they know to the penny. I ask how much was taken out in taxes from their last check and they have no idea. It is sad really.

iVillage Member
Registered: 05-18-2004
Wed, 09-08-2004 - 3:28pm
"Good topic. If the IRS were dismantled who would be collectively despise? ;) "

Democrats ;)

iVillage Member
Registered: 05-02-2004
Wed, 09-08-2004 - 3:57pm
Yes, the witholding laws were a stroke of genius for the spendi-crats. (Not democrats, beurocrats - I don't want to get nailed for that...) But how many people actually look at their paychecks? I'm guilty of not doing it every time it graces my desk. But I'm painfully aware of how much goes to taxes(I'm a CPA - but I don't do taxes, hate 'em!). I think its funny that the tax rate during the French Revolution was around 27%and that led to a bloody revolution. I've succesfully blocked what our effective tax rate is if you include fed, state, unemployment, etc but I know its higher than that. There needs to be a taxpayers revolution to get both sides to cut the fat and be accountable for what they ask US to pay for. People get so excited about tax refunds but they don't understand that its actually their OWN MONEY that they are getting back. Its not some windfall from the government. Unless, they are in the group of people who get tax credits but aren't actually paying into the system. That really gets me going. I guess I got off topic. But I think there needs to be SOME kind of reform of the tax code, flat tax, consumption tax, something that works better than our current system and provides for more accountability in Washington. Perhaps this is just a pipe dream...

iVillage Member
Registered: 05-02-2004
Wed, 09-08-2004 - 4:10pm
That's an excellent point. But what do we do when we are forced to deal with declining revenue (income)? We tighten our belts and make do. Maybe we don't get that new Audi for Christmas. Or maybe there is no Christmas. We eat macaroni for awhile instead of filet mignon. We cut the fat. Why doesn't the government have to account for its money they way we do? They need to prioritize the spending the way most Americans are forced to do every day.
iVillage Member
Registered: 05-18-2004
Wed, 09-08-2004 - 4:22pm
"My biggest caution is this...I live in a state with a sales tax based system. If the economy starts to go sour for any reason, tax levels slide"

True. However, the same is true for all taxes, income included. I agree with ferrin, I believe, who said that gov't needs to cut spending. But of course we know that can't happen.

It is becoming a universal truth: Government grows, with Democrats or Republicans, peace time, war time, in times of plenty or times of famine. Gov't doesn't shrink it just grows slower at times. Case in point...one party complains that the other is cutting spending on say education by 15%, but the truth is they only want to increase spending by 5%, not 20%. Only in gov't can a spending increase be called a decrease in spending.

iVillage Member
Registered: 05-02-2004
Wed, 09-08-2004 - 4:55pm
Why should we be resigned to the fact that government will continue to grow and not be accountable to its employers, the American taxpayers?

I guess I'm just not ready to give up hope that some day Washington will actually represent the people and not special interests. I'm generally more of a realist, but I'd like to think that the American people will pull themselves out of their apathy and make Washington work for us, not the other way around.

iVillage Member
Registered: 03-23-2003
Wed, 09-08-2004 - 5:24pm

I would never argue that...and I completely agree that there is much too much waste in government - at all levels.


iVillage Member
Registered: 03-23-2003
Wed, 09-08-2004 - 5:41pm

True. However, the same is true for all taxes, income included.


Not necessarily.


Avatar for car_al
iVillage Member
Registered: 03-25-2003
Thu, 09-09-2004 - 8:38am
I'm opposed to it because it is unfairly felt by the poor and it will never generate enough dependable income to run needed government services - defense, customs, EPA, courts, etc. IMO.

C

iVillage Member
Registered: 05-18-2004
Thu, 09-09-2004 - 9:47am
"Yes, we can 'tighten our belts'...but what happens when they cut police protection, fire dept services, educational funds...Homeland Security??? "

All the items you listed are state responsibilities with some exceptions for homeland security and education. States make ends meet and most do it primarily with sales tax, some states don't even have an income tax and they pay for everything.

Why would we cut police and fire first? We wouldn't but it sounds dramatic.