National Sales Tax

[netsecurity]

I wonder why raising tax on the rich is what Obama has been focused on all these years. We know raising tax on the rich isn't going to eliminate our deficit, let alone our debt. We need drastic change to our tax code with four goals: 1) Simplify, 2) Increase revenue, 3) Fairness, 4) Stimulate growth. Taxing the rich defies all but one of these goals.

The Internet is being used to purchase more and more goods each year without paying sales tax. We buy goods on Ebay, Amazon, etc. from out of state specifically to avoid local sales taxes. This is a drastic change in our economy, and is certainly indirectly causing states to borrow more from the federal government, increasing debt. This requires drastic change to meet the needs of our time.

A federal sales tax would be a "fair" tax, applied evenly to everyone, since you only pay when you buy things. Illegal aliens would pay it, rich would pay it, and the poor would pay it. But the rich would still end up paying far more, because they buy far more (currently they pay zero federal sales tax on each yacht, mansion, Ferrari...), and the poor would pay less inherently because they buy less. There is no need for graduated tax rates, exemptions, or any complexity whatsoever. It is precisely what this country needs to get back on its feet and modernize our economy forever.

To do this we must eventually ELIMINATE INCOME TAX altogether. And absolutely no one inside the country should be exempt, no 501C3, no government exemptions, and no exemptions for people with food stamps, no exemptions for business to business wholesales, etc...just keep it simple! If a business doesn't want to be taxed for buying it's parts, then it should make them.

When the income tax is eliminated our net pay would increase, while our employers could still pay us less, potentially making them more profitable. Best of all may be that our products would be far cheaper to export (the only exemption would rightfully be sales to other countries where they apply their own sales tax). Imported parts and products would be taxable (take that China)!

Okay, so tell me why this would not work? I know the transition would be technically difficult, but assume that is overcome, and tell me how this wouldn't accomplish all four goals?

 

[IndyBeerman]

When the income tax is eliminated our net pay would increase, while our employers could still pay us less, potentially making them more profitable. Best of all may be that our products would be far cheaper to export (the only exemption would rightfully be sales to other countries where they apply their own sales tax). Imported parts and products would be taxable (take that China)!

Okay, so tell me why this would not work? I know the transition would be technically difficult, but assume that is overcome, and tell me how this wouldn't accomplish all four goals?

You really believe that our net pay would increase, that is a falsehood, if a national sales tax was created, it would be drawn up in a fashion that more would be generated than the current system.

While this seems so simple to create, and would generate money from people who do not contribute now, it would be a nightmare because we would be penny-ed to death one cent at a time, and as we know legislators can not stop at having a tax that is just enough to pay off the debt, they want a financial windfall that fills the coffers and let's them spend more.

 

[IndyDave1776]

The reason why it wouldn't work is that they would insist on having it in addition to and not instead of income tax so we would lost both ways at the .gov spend-fest would get worse yet.

 

[beararms1776]

The reason why it wouldn't work is that they would insist on having it in addition to and not instead of income tax so we would lost both ways at the .gov spend-fest would get worse yet.

Yes, and it would take a conservative approach to balance all that loot, and who's really willing to do that?

 

[melensdad]

The reason why it wouldn't work is that they would insist on having it in addition to and not instead of income tax so we would lost both ways at the .gov spend-fest would get worse yet.

Yes, and it would take a conservative approach to balance all that loot, and who's really willing to do that?

IndyDave : AGREED. That is exactly what has happened in England and the European Union. Income Taxes + a VAT tax (Value Added Tax). A VAT tax is similar to a national sales tax, in that it is added to goods as they are sold at various levels in the sales cycle. Its been proposed here in the US as a national sales tax. The other problem is that it does not restrict spending so in "good economic times" the government has more $$$,$$$ flowing in and it spends it, but in "bad economic times" the government has fewer $ coming in but has incurred bills that need to be paid because the government is too short sighted to set money aside for bad times. Consequently, just like in England, the politicians raise the rate.


beararms : WTF does that mean? A true conservative approach would be to actually cut spending, not increase taxes. But beyond that, seriously, you write such incomplete thoughts with cryptic messages that its hard to understand your actual point. So please, what are you trying to say?

 

[Expat]

I wonder why raising tax on the rich is what Obama has been focused on all these years.

Because he is a true believer in what he says. Watch the movie 2016. He believes the rich are rich only because they took advantage of the minorities. So he wants to take those ill gotten riches and redistribute them to those that were taken advantage of. The movies makes the case on a country vs. country basis but I think it applies on a smaller more individual basis. That is what Reverend Wright preached for all those years that Obama was there cheering him on.

 

[Armed-N-Ready]

Fair is not what he really wants.

He doesn't care about being "fair" or reducing the debt. It's all about class warfare and wealth redistribution. Take from those that work give to those that will vote to keep him and his party in power.

 

[beararms1776]

IndyDave : AGREED. That is exactly what has happened in England and the European Union. Income Taxes + a VAT tax (Value Added Tax). A VAT tax is similar to a national sales tax, in that it is added to goods as they are sold at various levels in the sales cycle. Its been proposed here in the US as a national sales tax. The other problem is that it does not restrict spending so in "good economic times" the government has more $$$,$$$ flowing in and it spends it, but in "bad economic times" the government has fewer $ coming in but has incurred bills that need to be paid because the government is too short sighted to set money aside for bad times. Consequently, just like in England, the politicians raise the rate.


beararms : WTF does that mean? A true conservative approach would be to actually cut spending, not increase taxes. But beyond that, seriously, you write such incomplete thoughts with cryptic messages that its hard to understand your actual point. So please, what are you trying to say?

There's no cryptic message there.
Balancing a budget is part of cutting spending. A conservative approach.

 

[melensdad]

beararms Didn't get that from what you wrote.

 

[beararms1776]

How would one deal with the inflation rate that's putting everyone in the poor house?

 

[NathanJefferson]

How would one deal with the inflation rate that's putting everyone in the poor house?

With the same stuff that's already been mentioned in the posts above: tax the rich and give to the poor...

Yes that doesn't SOLVE it, but that's how they deal with it .

 

[spec4]

The big problem I see with a nation sales tax or VAT is what will the percentage be? I would be OK with 10% and eliminate the income tax and all other federal taxes on tobacco, booze, etc. Yet I'm sure that if they got it, they would want much more than 10% and then they could increase it as spending increases. Only a Constitutional amendment to keep it at 10% would satisfy me.

 

[inxs]

It would require a Constitutional amendment for a sales tax as the Constitution had no provision for any direct taxes except imposts and excises until the 16th Amendment, which us how we got into this mess in the first place.

 

[NathanJefferson]

The big problem I see with a nation sales tax or VAT is what will the percentage be? I would be OK with 10% and eliminate the income tax and all other federal taxes on tobacco, booze, etc. Yet I'm sure that if they got it, they would want much more than 10% and then they could increase it as spending increases. Only a Constitutional amendment to keep it at 10% would satisfy me.

I would like to see a 1-2 page income tax that sets rates similar to the nominal rates we have now but without 99.99% of deductions/credits/loopholes.

I would like it to include both sides of SS and Medicare/aid, no more you pay half and another half gets hidden on the employers side.

This would look something like 10% for the first $20,000, 20% for 20,000-50,000, 30% 50,000-100,000, 40% 100,000-250,000 and 49% for everything above $250,000. (those numbers are only to illustrate the concept and I have no idea what the real workable rates/levels would be)

After that, you get a variable sales tax that will be apportioned to pay off the previous years deficit. They blow 1,000,000,000,000 that we don't have then you get an 'in your face' double digit sales tax next year. They balance the budget and next year you get no additional sales tax.

No more hiding and cheating. No more pandering to people with all your free money. You spend it, everyone is going to pay for it next year!

 

[beararms1776]

beararms Didn't get that from what you wrote.

Sorry you took it that way.

1.) The reason why it wouldn't work is that they would insist on having it in addition to and not instead of income tax so we would lost both ways at 2.) the .gov spend-fest would get worse yet.

Here's a better breakdown of my post.

1.) Yes meant in agreement with the blue text.
2.) A conservative approach was meant for the red text.

 

[Leo]

I keep seeing this "tax free" internet thing. That is so bogus. In the 39 years I have been filling out tax returns, I have never lived in a place where the tax forms do not have a blank for out of state sales. You are required by law to declare these purchases and pay state sales or "use" tax on them. If the government does not get these taxes, it simply means they are not doing their job.

 

[poptab]

There are so many reason why this will never happen.
1. Congresspeople are incentivized to make the tax code complicated. What better way to attract lobbyist donations than tax exemptions.

2. Congresspeople are incapable of cutting government services. Its political suicide.

3. Raising more revenue wont fix the debt problem because we dont have a debt problem. We have a spending problem. See #2. Until we fix the spending problem raising more taxes is just going to make the problem worse.

 

[melensdad]

I keep seeing this "tax free" internet thing. That is so bogus. In the 39 years I have been filling out tax returns, I have never lived in a place where the tax forms do not have a blank for out of state sales. You are required by law to declare these purchases and pay state sales or "use" tax on them. If the government does not get these taxes, it simply means they are not doing their job.

New Hampshire and a couple other states do not charge this. But for as long as I know we have been paying a 'use' tax in the State of Indiana.

 

[beararms1776]

I keep seeing this "tax free" internet thing. That is so bogus. In the 39 years I have been filling out tax returns, I have never lived in a place where the tax forms do not have a blank for out of state sales. You are required by law to declare these purchases and pay state sales or "use" tax on them. If the government does not get these taxes, it simply means they are not doing their job.

Maybe it's for purchase amounts over a certain dollar figure.

 

[melensdad]

Maybe it's for purchase amounts over a certain dollar figure.

NOPE. It is right on your Indiana tax form. It applies to ANY and EVERY purchase you make that is shipped into Indiana without the sales tax collected. Its called "use" tax. Almost every state has this law. The tax is owed to the state. The only question is who is the party that is responsible for paying it. If you buy goods from out of state and have them shipped to you then its typical that YOU are the responsible party.