Tax Reform

[Bogart]

I can see a number of problems with both VAT and any kind of sales tax. If the goal is to provide some sort of equity in the tax code, I can't see you the inherent regressive nature of either type of tax would be a good idea. True, you can exempt certain types of products, but for those that you don't exempt, you will see the lower incomes paying a higher portion of their income to taxes. I can't see an effective tax code that isn't means tested in some way. Yes, you could provide a refund at the end of the year for lower incomes, but is this really a comfort to those who live paycheck to paycheck.

Honestly, I think the main flaw in the current tax code is the complexity. In theory, I think it is the best way to tax. I think that the first place to start is to eliminate all exemptions and then start from scratch. Children...mortgage...education...medical expenses.... eliminate capital gains... exemption for small business losses...These are the types of exemptions that should be put back in. I think they would effect the greatest number of people and are fairly straight-forward.

[A18]

The idea is to pay people up front, so the sales tax doesn't matter if you're living paycheck to paycheck.

I agree with you that complexity is the main flaw, but as a libertarian-leaning Republican, I don't really like having to report my income to the government every year.

[Brutus]

A little fact from today's Yahoo Finance page daily quiz:

61% of US corporations paid no federal taxes between 1996 and 2000.

[A18]

Corporate taxes just get passed on to consumers (and/or lower employee wages).

We need to adopt a uniform method of taxation, whether it be sales, income, or whatever.

[MODU]

A little fact from today's Yahoo Finance page daily quiz:

61% of US corporations paid no federal taxes between 1996 and 2000.

That's it.  Impeach Clinton!

Oh wait, we already did.  My bad.  hahaha

[Fmr. Gov. NickG]

All of these ideas are horrible, and if Bush even proposes one of them, it will constitute a betrayal of the American's people's trust in him.   He never mentioned any of them during the campaign, because to do so would have meant losing in a landslide.

[A18]

All of these ideas are horrible, and if Bush even proposes one of them, it will constitute a betrayal of the American's people's trust in him.   He never mentioned any of them during the campaign, because to do so would have meant losing in a landslide.

Reactionary liberals...

[Brutus]

All of these ideas are horrible, and if Bush even proposes one of them, it will constitute a betrayal of the American's people's trust in him.   He never mentioned any of them during the campaign, because to do so would have meant losing in a landslide.

Remember, every candidate platform implicitly carries the disclaimer:  "Promises subject to change without notice."

[MODU]

All of these ideas are horrible, and if Bush even proposes one of them, it will constitute a betrayal of the American's people's trust in him.   He never mentioned any of them during the campaign, because to do so would have meant losing in a landslide.

No fear, Nick.  It would take the government over 4 years to scrap and install any of the above new tax systems, since they would have to re-educate the citizens of how it works and what their responsibilities are.  That alone would take two years, of course, after the Congress runs all conceivable problems and revenue income from such a change.

[Bogart]

The idea is to pay people up front, so the sales tax doesn't matter if you're living paycheck to paycheck.

I agree with you that complexity is the main flaw, but as a libertarian-leaning Republican, I don't really like having to report my income to the government every year.

Then I would think you'd disapprove of giving the government an interest free loan for a good part of the year.

[A18]

The idea is to pay people up front, so the sales tax doesn't matter if you're living paycheck to paycheck.

I agree with you that complexity is the main flaw, but as a libertarian-leaning Republican, I don't really like having to report my income to the government every year.

Then I would think you'd disapprove of giving the government an interest free loan for a good part of the year.

It's not a loan. It's yours to keep.

[frenger]

I voted flat tax.
But altough I think the slaes tax is less preferable, I think some of you are making too much of a deal out of it. Here in Portugal we have a sales tax of 19% over non-essential goods(I think the tax on essential is either 13% or 7%, but not sure), and still people are able to buy stuff, even with a top income tax rate of 40%.

[○∙◄☻¥tπ[╪AV┼cVê└]

You get to keep your whole check though so you'd have more disposable income to purchase your goodies.

What about payroll taxes?

I think the sales tax abolishes federal corporate and payroll taxes.

You mean that it generates about $2 trillion a year in revenue? What's the tax rate? 75%?

I believe it is proposed to be 23%

The math doesn't work.
A lot of the GDP would be exempt (since only personal spending is counted). The GDR is $10 trillion a year. We need $2 trillion a year

[??????????]

JFRAUD

Keep the Income tax for businesses (WHAT IT WAS REALLY CREATED For). Sales tax for all citizens. Sales tax would NOT be regressive as food would be exempt obviously. You wouldn't be paying anymore payroll taxes either so that makes up a large part of the sales tax. We get along just fine here in FL without a Income tax and our economy is booming. I have no reason to see why it wouldn't work nationally.

www.fairtax.org

[IDS Judicial Overlord John Dibble]

We get along just fine here in FL without a Income tax and our economy is booming. I have no reason to see why it wouldn't work nationally.

As much as I hate to play devil's advocate, being a supporter of the national sales tax, do consider that Florida gets lots of tourists - non-tourist states wouldn't get that kind of tax income(though, on the other hand, they may not need it as their infrastructure wouldn't have to handle the tourists).

[A18]

There are a bunch of different sales tax proposals floating around.

Here's an overview: http://www.cato.org/pubs/pas/pa-272es.html

How to make it non-regressive: http://www.cato.org/pubs/pas/pa-289.html

[angus]

Actually, the Flat Tax idea has been floating around for decades, and is a major stated goal of many conservative thinkers and politicians and writers.  Grover Norquist, for example.  So much time was spent on foreign policy during this campaign that lots of folks seemed to ignore domestic policy, but I'd imagine with a favorable majority in both houses of congress, if the right has the president's ear, then they may well get moving in that direction.  Of course, that assumes enough Democrats and Republicans support a Flat tax.  I do not believe they do, and I do not believe such a proposal would go down along party lines.  Arlen Specter, for example, might not support the idea while Harry Reid might. 

What the Bushies want to do, if they're serious about pushing through a flat tax, is rally the GOP troups around the cause, as much as possible, with committee-appointment assignments, and various means/ways promises, where applicable.  Then, to fill in any gaps left, run commercials in the districts of Democrats where the folks could be persuaded to push for flat taxes by calling or writing their congressmen.  Maybe show recently unemployed young internet gurus writing huge tax checks to uncle sam while they're living at home with mom & dad.  (if you made 200 grand for most of 2001, but got laid off at the end and had to move back home, you're not likely to forget the experience.  sadder still to watch it die than never to have known it.)  Meanwhile, play some melancholy song with both youth- and yuppie-appeal, such as Beatles' Tax Man.  This would be a great commercial to push voters in Democrat districts into contacting their legislator.

Let me tell you how it will be
There's one for you, nin'teen for me

   Cause I'm the tax man
   Yea I'm the tax man

Should five percent appear too small
Be thankful I don't take it all

   Cause I'm the tax man
   Yea I'm the tax man

If you drive a car-car I'll tax the street
If you try to sit-sit I'll tax your seat
If you get too cold I'll tax the heat
If you take a walk I'll tax your feet
Tax man

   Well I'm the tax man
   Yea I'm the tax man

Don't ask me what I want it for
If you don't want to pay some more

   Cause I'm the tax man
   Yea I'm the tax man

Now my advice for those who die (tax man)
Declare the pennies on your eyes (tax man)

   Cause I'm the tax man
   Yea I'm the tax man

And you're working for no one but me.

[Huckleberry Finn]

I'm for flat tax, in principle.

I'm not sure about America, but it could work in Finland.

[○∙◄☻¥tπ[╪AV┼cVê└]

JFRAUD

Keep the Income tax for businesses (WHAT IT WAS REALLY CREATED For). Sales tax for all citizens. Sales tax would NOT be regressive as food would be exempt obviously. You wouldn't be paying anymore payroll taxes either so that makes up a large part of the sales tax. We get along just fine here in FL without a Income tax and our economy is booming. I have no reason to see why it wouldn't work nationally.

www.fairtax.org

If all this stuff is exempt, how the hell are you going to come up with the $2 trillion per year needed? Argue one way or the other.
Either
1. It will pay for the entire federal budget
2. It will be only 23%
3. It will be extremely regressive

You can't win them all.

[??????????]

JFRAUD

Keep the Income tax for businesses (WHAT IT WAS REALLY CREATED For). Sales tax for all citizens. Sales tax would NOT be regressive as food would be exempt obviously. You wouldn't be paying anymore payroll taxes either so that makes up a large part of the sales tax. We get along just fine here in FL without a Income tax and our economy is booming. I have no reason to see why it wouldn't work nationally.

www.fairtax.org

If all this stuff is exempt, how the hell are you going to come up with the $2 trillion per year needed? Argue one way or the other.
Either
1. It will pay for the entire federal budget
2. It will be only 23%
3. It will be extremely regressive

You can't win them all.

Well if you think that the government will no longer take any payroll taxes you will save a few hundred dollars a month there. It balances out. Plus the income tax should be kept for corporations as thats what the 16th Amendment was ACTUALLY intended for. This mafia IRS is a disgrace and disgusting.

[A18]

The corporate tax should remain until we can kill off about half of the federal government's spending.

[??????????]

The corporate tax should remain until we can kill off about half of the federal government's spending.

No, it should always remain in place.

[A18]

All corporate taxes get passed on to consumers. We just need to leave it in place for a while so people don't realize they're being taxed during the transition period.

[Ats]

Strongly opposed to all of the above.

agreed.  at the risk of sounding like a left-wing nut, I think all those are pretty damned regressive.  In BRTD's example, a person making ten grand would probably pay more with a federal sales tax, since he's pay for purchases because he'd ending up spending his whole income (hard to save any on that salary.)

Not sure what form this domestic agenda will take, but I can't imagine that the Grover Norquist model will fly, even with a 55/45 republican congress.

A regressive tax is one where the poor pay a higher % than the rich.

How can a flat tax be regressive? If income under $35,000 is exempted, then the tax is definitionally progressive. The sales tax is another issue.

Also, the only people that make $10k a year are illegal immigrants. The Cato Institute estimates (http://www.cato.org/pubs/pas/pa-240.html) a person on welfare recieves a minimum of $11,500 and a maximum of $36,400 a year in state benefits alone, not to mention local and federal ones. People that make that little pay almost no taxes to begin with.

[Ats]

JFRAUD

Keep the Income tax for businesses (WHAT IT WAS REALLY CREATED For). Sales tax for all citizens. Sales tax would NOT be regressive as food would be exempt obviously. You wouldn't be paying anymore payroll taxes either so that makes up a large part of the sales tax. We get along just fine here in FL without a Income tax and our economy is booming. I have no reason to see why it wouldn't work nationally.

www.fairtax.org

If all this stuff is exempt, how the hell are you going to come up with the $2 trillion per year needed? Argue one way or the other.
Either
1. It will pay for the entire federal budget
2. It will be only 23%
3. It will be extremely regressive

You can't win them all.

You'd still have business taxes, you'd save $150 billion a year in IRS expenses. Plus people will be more cognizant of the taxes they pay and thus will be more willing to reduce the scope of government.