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Post by aztec70 on Apr 22, 2011 18:14:21 GMT -8
Does anyone have any thoughts on replacing federal income tax with a federal sales tax? Is it a good idea or a bad idea? Some of both?
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Post by aztecwin on Apr 23, 2011 6:20:00 GMT -8
First blush is that it is regressive and therefore a good idea. Might want some things tax free like food to get liberals to agree.
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Post by Deleted on Apr 23, 2011 6:34:44 GMT -8
It could be less regressive if there were a standard exemption applied. I think it's a good idea. It captures revenue from the underground economy. It gives citizens control over their earnings.
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Post by aztecwin on Apr 23, 2011 6:43:28 GMT -8
It could be less regressive if there were a standard exemption applied. I think it's a good idea. It captures revenue from the underground economy. It gives citizens control over their earnings. I agree, but think when taxes are paid at the point of sale any kind of exemption would be hard to keep track of. I like the idea of exempting some things like food and medicine as a means of implementing an exemption better, but your point is understood and agreed with. Just the mechanics would be hard. |
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Post by aztec70 on Apr 23, 2011 7:06:04 GMT -8
Happy to see that aztecwin is onboard for a federal sales tax instead income tax. If that happens my distributions from my pretax retirement accounts will be tax free. Cool.  |
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Post by Bob Forsythe on Apr 23, 2011 7:11:41 GMT -8
Well, I'll offer my idea that I came up with for paying for health care - a 5 cent tax on everything we buy over a buck. Just as an example, Americans spend 8 billion a year on cosmetics and more than 48 billion on their pets: petfoodindustry.com/newsletter/petenews/6896.htmlSo it's a nickel if you buy a bottle of gatoraide or if you buy a Ferrari. Yeah, it's regressive and in general I hate regressive taxation but a nickel ain't all that impactive and paying it on most every purchase adds up to a ton of bucks. =Bob |
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Post by aztecwin on Apr 23, 2011 7:11:58 GMT -8
Happy to see that aztecwin is onboard for a federal sales tax instead income tax. If that happens my distributions from my pretax retirement accounts will be tax free. Cool. You have to have the alacrity to act as conditions and laws change. If we were to get this kind of tax, where would your business be? I was wondering why you would float such an idea. |
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Post by JOCAZTEC on Apr 23, 2011 9:00:56 GMT -8
There are quite many Californians getting murdered by the State Board of Equalization today over the old Use tax which as been expanded to include any one in California with any savings whatsoever. All of us in California are now MANDATED (the libels really love this word), and nearly all don't understand what a, "qualified purchaser" label is. It is now time that the State offset machine will start seizing paychecks, bank accounts, refunds etc. to apply to the State's guess as to what your Use tax was for the past five years. Since you failed to file that Use tax return irregardless whether you bought a stick of gum, you'll be shocked, and mad, and livid, and ready to rip the heads off...
For those who want regressive taxes...DUH. Nine of the ten income taxes are already regressive and this has destroyed the American economy for a long time.
Two reasons you shoud never apply any...ANY...consumption tax past that it's regressive (regressive taxes the working class into bankruptcy), one you can't prove a negative in an audit, and two, the State will argue non-taxable labor is fabrication labor and assess a tax on you, with penalties and twelve percent per year interest, that will put you into debtor's prison.
National sales tax? That would be insane. Sure, the government would love another tax. But you know that the government will never replace a tax for another tax, ever! DUH.
However, if you eliminated the sales taxes, you'd get the economy going, very quickly. Follow that with an 18 year accelerated write off and no passive rules on real estate, commercial or residential, and stop the real estate market decline.
Oh, what ever happened to the promise that the one percent increase in sales tax, increased after the SF quake, would be lowered?
HAM
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Post by inevitec on Apr 24, 2011 7:13:02 GMT -8
A guy making $40,000.00 buys $32,000.00 worth of taxable stuff at a 15% tax rate for a total tax of $4,800.00. His effective tax rate is 12%.
A guy making $400,000.00 buys $200,000.00 worth of taxable stuff at a 15% rate for a total tax of $30,000.00. His effective rate is 7.5%.
The well to do are already at an advantage. A federal sales tax will just intensify the screwing. In-elasticity of demand suggests that low income people (No matter the exemptions for food and other things which the rich guy also gets-presumably-unless you means test every frigging shopper.)
As a percentage of income, the high income person will spend proportionally less, making his effective tax rate lower. The burden will fall on people who have to spend a larger portion of their income to live.
This means that each dollar the poorer guy has is worth less than than each dollar the rich guy has, because the rich guy's exposure to the tax is smaller.
The poorer guy cannot limit the proportion he spends as easily as the rich guy, because a greater % of his purchases are necessary to keep him employed warm and functioning. The poorer guy cannot reduce the quality of what he buys, either, as he already consumes lower priced goods (see Hyundai). So he is forced to pay this tax.
The richer guy forgoes some unnecessary purchases and buys a Lexus instead of a high end Mercedes. He can adjust his tax. The rich guy, if he wanted, could spend the same amount to live as the poorer fella. That gives him the option, when ever he wants to use it, of paying negligible taxes.
The rich guy has choices, the poor one does not have that choice. A national sales tax, as doctors would say, is contraindicated.
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Post by aztecwin on Apr 24, 2011 7:57:25 GMT -8
A guy making $40,000.00 buys $32,000.00 worth of taxable stuff at a 15% tax rate for a total tax of $4,800.00. His effective tax rate is 12%. A guy making $400,000.00 buys $200,000.00 worth of taxable stuff at a 15% rate for a total tax of $30,000.00. His effective rate is 7.5%. The well to do are already at an advantage. A federal sales tax will just intensify the screwing. In-elasticity of demand suggests that low income people (No matter the exemptions for food and other things which the rich guy also gets-presumably-unless you means test every frigging shopper.) As a percentage of income, the high income person will spend proportionally less, making his effective tax rate lower. The burden will fall on people who have to spend a larger portion of their income to live. This means that each dollar the poorer guy has is worth less than than each dollar the rich guy has, because the rich guy's exposure to the tax is smaller. The poorer guy cannot limit the proportion he spends as easily as the rich guy, because a greater % of his purchases are necessary to keep him employed warm and functioning. The poorer guy cannot reduce the quality of what he buys, either, as he already consumes lower priced goods (see Hyundai). So he is forced to pay this tax. The richer guy forgoes some unnecessary purchases and buys a Lexus instead of a high end Mercedes. He can adjust his tax. The rich guy, if he wanted, could spend the same amount to live as the poorer fella. That gives him the option, when ever he wants to use it, of paying negligible taxes. The rich guy has choices, the poor one does not have that choice. A national sales tax, as doctors would say, is contraindicated. Just what do you think our present tax code does? We have pages after pages of tax exemption and loopholes designed for the influential rich. We would be much better off and much fairer with this kind of tax with the proper thought going into what is exempt. To think otherwise is naive. |
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Post by inevitec on Apr 24, 2011 9:10:49 GMT -8
A guy making $40,000.00 buys $32,000.00 worth of taxable stuff at a 15% tax rate for a total tax of $4,800.00. His effective tax rate is 12%. A guy making $400,000.00 buys $200,000.00 worth of taxable stuff at a 15% rate for a total tax of $30,000.00. His effective rate is 7.5%. The well to do are already at an advantage. A federal sales tax will just intensify the screwing. In-elasticity of demand suggests that low income people (No matter the exemptions for food and other things which the rich guy also gets-presumably-unless you means test every frigging shopper.) As a percentage of income, the high income person will spend proportionally less, making his effective tax rate lower. The burden will fall on people who have to spend a larger portion of their income to live. This means that each dollar the poorer guy has is worth less than than each dollar the rich guy has, because the rich guy's exposure to the tax is smaller. The poorer guy cannot limit the proportion he spends as easily as the rich guy, because a greater % of his purchases are necessary to keep him employed warm and functioning. The poorer guy cannot reduce the quality of what he buys, either, as he already consumes lower priced goods (see Hyundai). So he is forced to pay this tax. The richer guy forgoes some unnecessary purchases and buys a Lexus instead of a high end Mercedes. He can adjust his tax. The rich guy, if he wanted, could spend the same amount to live as the poorer fella. That gives him the option, when ever he wants to use it, of paying negligible taxes. The rich guy has choices, the poor one does not have that choice. A national sales tax, as doctors would say, is contraindicated. Just what do you think our present tax code does? We have pages after pages of tax exemption and loopholes designed for the influential rich. We would be much better off and much fairer with this kind of tax with the proper thought going into what is exempt. To think otherwise is naive. Just what do you think our present tax code does? We agree, although not to the degree you do.. If we went back to 1999 and never saw Bush, it would be better. An income tax cannot be avoided by spending less. The rich have more flexibility than a guy who spends his whole income getting by. Thus, the high income earners have less wiggle room. |
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Post by aztecwin on Apr 24, 2011 19:19:02 GMT -8
Just what do you think our present tax code does? We have pages after pages of tax exemption and loopholes designed for the influential rich. We would be much better off and much fairer with this kind of tax with the proper thought going into what is exempt. To think otherwise is naive. Just what do you think our present tax code does? We agree, although not to the degree you do.. If we went back to 1999 and never saw Bush, it would be better. An income tax cannot be avoided by spending less. The rich have more flexibility than a guy who spends his whole income getting by. Thus, the high income earners have less wiggle room. I agree that the rich have more options, but the tax code just makes it more complicated for some and easier for the rich to arrange their affairs to avoid some tax. As bad and inept as Bush was, we dodged a couple bullets by being smart enough to not elect Kerry or Algore. Either one of them would have been disasters much as Obama is turning out. We need some sort of regressive tax to replace the current tax code with some exemptions to favor the poor and working poor. |
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Post by JOCAZTEC on Apr 26, 2011 7:16:37 GMT -8
A guy making $40,000.00 buys $32,000.00 worth of taxable stuff at a 15% tax rate for a total tax of $4,800.00. His effective tax rate is 12%. A guy making $400,000.00 buys $200,000.00 worth of taxable stuff at a 15% rate for a total tax of $30,000.00. His effective rate is 7.5%. The well to do are already at an advantage. A federal sales tax will just intensify the screwing. In-elasticity of demand suggests that low income people (No matter the exemptions for food and other things which the rich guy also gets-presumably-unless you means test every frigging shopper.) As a percentage of income, the high income person will spend proportionally less, making his effective tax rate lower. The burden will fall on people who have to spend a larger portion of their income to live. This means that each dollar the poorer guy has is worth less than than each dollar the rich guy has, because the rich guy's exposure to the tax is smaller. The poorer guy cannot limit the proportion he spends as easily as the rich guy, because a greater % of his purchases are necessary to keep him employed warm and functioning. The poorer guy cannot reduce the quality of what he buys, either, as he already consumes lower priced goods (see Hyundai). So he is forced to pay this tax. The richer guy forgoes some unnecessary purchases and buys a Lexus instead of a high end Mercedes. He can adjust his tax. The rich guy, if he wanted, could spend the same amount to live as the poorer fella. That gives him the option, when ever he wants to use it, of paying negligible taxes. The rich guy has choices, the poor one does not have that choice. A national sales tax, as doctors would say, is contraindicated. What does "contraindicated" mean? HAM |
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Post by The Great Aztec Joe on Apr 26, 2011 7:18:54 GMT -8
Does anyone have any thoughts on replacing federal income tax with a federal sales tax? Is it a good idea or a bad idea? Some of both? It would be an outrageous attack on the middle class which is now, for the most part, the lower 70 percent of society as the tax would fall more heavily on them than on the rich (the upper 30% of society). NOPE! to that idea. Riots would ensue if any gang of nincompoops tried to force that upon the families of America. What we need is a national tax of 50% of all income in excess of $33,000 per individual. |
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Post by AztecBill on Apr 26, 2011 9:11:39 GMT -8
Does anyone have any thoughts on replacing federal income tax with a federal sales tax? Is it a good idea or a bad idea? Some of both? It would be an outrageous attack on the middle class which is now, for the most part, the lower 70 percent of society as the tax would fall more heavily on them than on the rich (the upper 30% of society). NOPE! to that idea. Riots would ensue if any gang of nincompoops tried to force that upon the families of America. What we need is a national tax of 50% of all income in excess of $33,000 per individual. 50% over 33K. Talk about an "attack on the middle class". Let me guess Joe, you make 33K.
One problem that someone obliquely referred to above is the effect on long term planning by folks effected by the new tax. There is a boatload of folks who have taken advantage of Roth IRAs instead of contributing to a standard IRA. They did this so they could have "Tax Free" retirement funds. If you suddenly change to a national sales tax, they would all be screwed. The real question is what does the national sales tax replace? If it is all taxes including Social Security, Medicare, and corporate Taxes, then the question about the "poor" is answered. They would be better off, especially if non-prepared food is exempted. Taxing consummation instead of income would encourage savings and investment. Who cares if the rich don't get taxed on half their income if that income is banked or invested? Savings and investment are very good for the economy (we have too little of each). The rich are only better off because of the extra money they actually spend. The big problem is government. They would promise to replace taxes with the new tax but when the smoke clears we would still have all the previous taxes too. |
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Post by inevitec on Apr 28, 2011 18:10:10 GMT -8
A guy making $40,000.00 buys $32,000.00 worth of taxable stuff at a 15% tax rate for a total tax of $4,800.00. His effective tax rate is 12%. A guy making $400,000.00 buys $200,000.00 worth of taxable stuff at a 15% rate for a total tax of $30,000.00. His effective rate is 7.5%. The well to do are already at an advantage. A federal sales tax will just intensify the screwing. In-elasticity of demand suggests that low income people (No matter the exemptions for food and other things which the rich guy also gets-presumably-unless you means test every frigging shopper.) As a percentage of income, the high income person will spend proportionally less, making his effective tax rate lower. The burden will fall on people who have to spend a larger portion of their income to live. This means that each dollar the poorer guy has is worth less than than each dollar the rich guy has, because the rich guy's exposure to the tax is smaller. The poorer guy cannot limit the proportion he spends as easily as the rich guy, because a greater % of his purchases are necessary to keep him employed warm and functioning. The poorer guy cannot reduce the quality of what he buys, either, as he already consumes lower priced goods (see Hyundai). So he is forced to pay this tax. The richer guy forgoes some unnecessary purchases and buys a Lexus instead of a high end Mercedes. He can adjust his tax. The rich guy, if he wanted, could spend the same amount to live as the poorer fella. That gives him the option, when ever he wants to use it, of paying negligible taxes. The rich guy has choices, the poor one does not have that choice. A national sales tax, as doctors would say, is contraindicated. Just what do you think our present tax code does? We have pages after pages of tax exemption and loopholes designed for the influential rich. We would be much better off and much fairer with this kind of tax with the proper thought going into what is exempt. To think otherwise is naive. " loopholes designed for the influential rich" The largest tax deductions and exemptions by dollar value are: The home mortgage deduction
The deduction for 401ks
Medical insurance payment by employers exemptions
The deduction for charitable contributions.(Source: National Taxpayer Advocate's Report to Congress) |
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Post by inevitec on Apr 28, 2011 18:17:56 GMT -8
A guy making $40,000.00 buys $32,000.00 worth of taxable stuff at a 15% tax rate for a total tax of $4,800.00. His effective tax rate is 12%. A guy making $400,000.00 buys $200,000.00 worth of taxable stuff at a 15% rate for a total tax of $30,000.00. His effective rate is 7.5%. The well to do are already at an advantage. A federal sales tax will just intensify the screwing. In-elasticity of demand suggests that low income people (No matter the exemptions for food and other things which the rich guy also gets-presumably-unless you means test every frigging shopper.) As a percentage of income, the high income person will spend proportionally less, making his effective tax rate lower. The burden will fall on people who have to spend a larger portion of their income to live. This means that each dollar the poorer guy has is worth less than than each dollar the rich guy has, because the rich guy's exposure to the tax is smaller. The poorer guy cannot limit the proportion he spends as easily as the rich guy, because a greater % of his purchases are necessary to keep him employed warm and functioning. The poorer guy cannot reduce the quality of what he buys, either, as he already consumes lower priced goods (see Hyundai). So he is forced to pay this tax. The richer guy forgoes some unnecessary purchases and buys a Lexus instead of a high end Mercedes. He can adjust his tax. The rich guy, if he wanted, could spend the same amount to live as the poorer fella. That gives him the option, when ever he wants to use it, of paying negligible taxes. The rich guy has choices, the poor one does not have that choice. A national sales tax, as doctors would say, is contraindicated. What does "contraindicated" mean? HAM Who knows? It sounded good though! Doctors always say it when they think something is bad for you. ;D |
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Post by tuff on Apr 28, 2011 19:00:12 GMT -8
I don't mind paying a fair shre for this country. But everytime I think about who is collecting and how they are spending I get angry. Govt's answer is to always look to the outside( raising taxes) and never to the inside(spending accountability). The tumor just keeps growing. I wish they would spend as much effort on controlling their spending habits as they do in finding new ways to tax.
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Post by Bob Forsythe on Apr 29, 2011 11:12:50 GMT -8
What does "contraindicated" mean? HAM Who knows? It sounded good though! Doctors always say it when they think something is bad for you. ;D
v. con·tra·in·di·cat·ed , con·tra·in·di·cat·ing , con·tra·in·di·cates
To indicate the inadvisability of something, such as a medical treatment.
From dictionary.com. =Bob |
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Post by aztecwin on Apr 29, 2011 11:39:34 GMT -8
Just what do you think our present tax code does? We have pages after pages of tax exemption and loopholes designed for the influential rich. We would be much better off and much fairer with this kind of tax with the proper thought going into what is exempt. To think otherwise is naive. " loopholes designed for the influential rich" The largest tax deductions and exemptions by dollar value are: The home mortgage deduction
The deduction for 401ks
Medical insurance payment by employers exemptions
The deduction for charitable contributions.(Source: National Taxpayer Advocate's Report to Congress) I was thinking more along the lines of the way big business and the super rich avoid taxes through special targeted loopholes like the oil companies get. I do get your drift however. I think that many home owners even with those deductions do not get enough of a break to beat the standard deduction. I don't have a mortgage so even though I own homes, I don't get the benefit that folks who are still paying their mortgage get. I guess that is fair, but if my other deductions and the property tax that I pay do not get big enough to overcome the standard deduction, I don't get the benefit of that either. I will not complain about that, just point out that some kind of flat tax or sales tax would be more fair for most of us. |
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