National sales tax: Pros and cons?
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National sales tax: Pros and cons?
| 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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The problem is that government is entirely too bloated and we are entirely too dependent. During times of feast the gov't should learn to be responsible and save tax revenue for the times of famine. The problem is we are use to the gov't spending every penny it receives every year and in some cases more. There are 100s of special interest groups that get taken care of each year, people receive services that shouldn't be supplied by the federal gov't and we expect it.
This is another reason we'll never see the Income tax done away with. People are too dependent on the gov't and the gov't needs ungodly amounts of money to take care of these people.
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.
Some states have nothing but income tax...no sales tax.
So if the state is doing it why cant the feds? It is a matter of being responsible. Like I said this is a pipe dream, gov't doesn't shrink it always grows.
"Also, just pointing out that those are also often cut - and police & fire are usually paid for on a local level, not a state level. So, when the cities aren't getting enough tax money for their budgets from the state, those services always see cuts. "
True, I didn't clarify spending to state vs local. However, police and fire are always threatened by politicians when they need to raise taxes. Our mayor in Baltimore has done just that. Not 2 months ago he threatened that without a tax increase firehouses would close and police would be laid off. Bull. He was lying and everyone knows it. Today they are talking about 3% raises for both fire and police. There are a TON of services and waste in gov't that could be cut if they wanted to. In Baltimore there are so many examples of waste it is unbelievable. And Baltimore isn't unique.
Did you miss post #9 in this thread?
I'll repeat my questions, as yet unanswered...........
What about taxes on unearned income? (interest on investments, invested
I did answer your question. Did you miss post number 10??? There is no tax on unearned income, nor on citizens that work overseas. Its a CONSUMPTION tax. If you had read the link I provided you would have seen that.
What is so unfair about paying taxes on what you CHOOSE to consume???
Why should I care?Q. What is Income Distribution?
A. Income distribution is who makes how much money.
They don't plan on doing away with all taxes just the income tax. So most of those taxes would remain. I'll have to do some more reading on this now.
"What about citizens that work overseas? "
I believe they are already income tax exempt on most/all income
I don't think there is anything deceptive about it. They make no bones that it is a sales tax system. But it certainly seems more fair to me then our current system.
Off to re-read info.
What is it?Q.What does "flat" mean?
A. "Flat" simply means "no graduation", or everybody pays the same rate. If you graph income levels with tax rates, there is no rise -- it is "flat."
Q.What is "graduation?"
A.
"Q. Doesn't "flat" mean "no exemptions/deductions" as well?
A. No. "
True, but most people who support a flat tax support one with absolutely no deductions. You earn it, it is taxed at x%. Simply, clean, and fair.
"Q. Who would benefit from a flat tax?
A. People with high incomes. "
Not entirely true. Everyone who files a tax return would. No need to pay for accountants, tax preparation, wondering about deductions, etc.
"Q. Who would benefit from the elimination of exemptions/deductions?
A. The middle class and the poor."
I support elimination of all deductions and excemptions providing the tsx code is a flat tax. However as is, I would venture to say that the vast majority of middle class people would be severly hurt if you took away their mortgage interest write off. A $5000 write off to a person making $80,000 a year means a whole lot more than a $100,000 write off to a person making millions.
"Q. What about the claim that some poor people will pay no tax at all under a flat tax?
A. If this provision is added to the flat tax package, then poor people will live outside the income tax system. In many people's minds, they will become second class citizens who contribute nothing to our country"
They contribute virtually nothing now. I can't stand to see someone loading groceries paid for by a welfare car into a lexus. I wonder how much they contribute now.
"Q. What about a national sales tax?
A. This would be an even bigger punishment for the poor. Rich people spend only a tiny proportion of their incomes in stores. "
Wealthy people have more disposable income and thus spend it more freely. Therefore they pay tremedously more in sales taxes. And I agree property and stocks, etc should be taxed.
"Under a national sales tax, local communities now using the sales tax would have to look for a new tax (an income tax?), otherwise, the total sales tax would double"
Not true, the income tax would be gone so consumers would actually benefit from a sales tax.
"What is really needed is a constitutional amendment eliminating exemptions/deductions permanently."
What? Now this is jus way out there.
"As for a national sales tax, to make this proposal acceptable, no purchases "should be excluded, including securities, real property, and services."
I agree with this.
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