Would you be in favor of a federal sales tax that replaced (dollar for dollar) the current federal income tax system?
Fair tax = Poor tax
Exactly, the income tax has a bracket system, while sales tax does not protect the impoverished and hurts businesses.
From Buffalo as well.
I'd take it over our current tax code any day of the week, easily. But I'm not oblivious to the fact that it isn't perfect.
A large sales tax would be devastating for poor people, so no.
Using a sales tax, those that don't pay any taxes would now pay their fair share!
This fails to mention the prebate that's outlined in the proposed FairTax, making it a progressive system rather than regressive. Read more at fairtax.org.
Let's replace a flawed Progressive system with a repressive regressive system.
The flaw is the fact that it is progressive.
As I recall from Econ classes a sale tax would be a far greater burden on those with lower incomes if all purchases were taxed equally. Making food, prescriptions and perhaps other necessities exemptions would help even the burden out, maybe...
You needed a college class to tell you that? Let's see...10% of $30K = $3K. 10% of $300K = $30K. So...the"rich" pay 10 X what "poor" people pay. Not fair?
joabsquash, Your statement assumes each income level spends all of their income in a given year. The reality has the lower income groups will spend nearly 100% (sometimes more through borrowing), but the upper income groups do not spend 100%. Therefore, a sales tax is a regressive tax.
And your point is?
Taxing spending only to raise revenues for the rightful role of government is fine. Taxing income in order to spend on anything other than limited government is obscene!
Taxing income sucks!
Incentivize success, not failure.
If the goal were equal taxes, the poor would be broke.
The only "fair tax" is a tax on spending. Not income.
Here's fair... I'm beautiful, healthy and rich. You're beautiful, healthy and rich. Shut up idiots. Fair is not the goal!
Repeal the 16th amendment!
It was the 16th amendment that added the tax on income. Simply repeal it!
No way. It would unfairly tax middle and lower class people who spend a larger percentage of their money on goods and services.
So what? Let them get on with it.
I don't think you understand how our economy works. Without the middle and lower class no one is buying. If no one is buying then the upper class crumbles and you are left with a broken system. This is all very simple. I don't see where you're confused.
Of course you don't.
hells, yes! then everyone literally pays their fair share, unlike the system now where nearly half pay zero federal income tax.
The tax would have to be at least 50%!
False, if it only replaces income tax like it says in the question it would be very low, less than 10%.
Not so sure and economics would agree with you on that one. Might even be 60%, look at Norway.
It wouldn't help. The government would continue to find ways to get more money so that they could waste it.
Yeah, maybe, but it would have to be very transparent.
It would make everyone pay their fair share, even people collecting money through a black market.
That way, you would be taxed on what you consume, not on what you earn. It's not perfect, but it's better by a long shot than all this progressive bs.
If its a sales tax instead of an income tax we'll essentially be punishing people for having children because they will be forced to buy more things to take care of their child.
More than that, we would be punishing people for spending their money, therefore encouraging them to save. Personal debt would be less of a problem, but the economy would quickly spiral into devastating descent that would immensely raise the national debt to the point that we couldn't pay it back.
By the way, more spending => bigger economy => more money in taxes => less national debt.
Less spending => smaller economy => less money in taxes => more national debt => panic from the whole country => even less spending => never ending death spiral
That is a doomsday scenario, but the point is that the question isn't whether or not a sales tax would hurt the economy, its how much it would hurt the economy.
It'd make me second guess the bullshit that I buy and help me save $$
It would end up hurting the poor
People wouldn't purchase as much which would cause tax rates to increase, which would cause spending to decrease, Which would cause tax rates to rise...
If so, people might do a lot of saving rather than spending. Might be a huge but temporary impact toward shrinking the economy that we would need to get past.
We should have both
If you think about it, so is income and all other types. I get taxed on what I make and then those taxed dollars (my taxed income) gets taxed again on purchases.
By the state not federally.
If it's easier than filling out those obnoxious forms, I'm all for it!
Absolutely not. That would disincentivize consumption and further ruin the economy.
A VAT is effectively the same as flat tax in this regard. Since all savings is eventually consumption it doesn't really matter if it's taken out before you touch it or after you give it away.
If prices are, lets say, 20% higher cause of VAT, it doesn't really matter if everyone is getting paid 20% more cause they aren't paying a flat income tax. It's all relative.
Toes matter when you take money away. If its immediately gone (income tax) then its just kind of "boo hoo, I'm over it" and you go about your day. If its when you purchase you will notice that you could just not purchase instead and save a lot more money. Income tax is punishing people for having a job, sales tax is punishing people for spending their money. We've gotten used to the income tax and its never really incentivized people to not have a job. I mean, have you ever heard someone say "I'm not getting a job until they get rid of the income tax"? But sales tax you have a choice whether or not to participate in that tax (you either buy or don't buy something). You'll still pay for the essentials like food and bills and such, but you'll be incentivized to not buy anything else. That would hurt the economy which would lead to fewer jobs which leads to even worse economy which leads to even fewer jobs and you can see the death spiral.
Person A makes $1000/week, has $10,000 in savings, wants to buy a flat screen TV for $1000. What would be the difference if they made $1200\week, had 12,000 savings, and wanted to buy a flat screen TV for $1200? The price is only nominally different.
What's the purpose of earning income you don't ever want to spend?
Murray ... some of us came from nothing, and want the money we've saved to work for us. We don't have to spend it.
You don't have to spend it, but if you don't then you worked and invested for nothing. Most aren't motivated to do that. My point is since it has the same spending power, the incentives must also be the same.
Better than income tax. Then at least I would have SOME control...
No, sales tax should be abolished everywhere.
As long as necessities aren't taxed, absolutely.
This is one of those things that sounds good from far away, not sure it stands up to a closer inspection though
Nope. Too regressive.
All taxation is theft
What governments do not have taxes?
Sales tax is not theft because you consent to paying it when you buy the item
Switzerland doesn't have income tax, and up until 1913 the us had no form of taxes whatsoever. In fact the first consistent tax was in 1861, the first year of the civil war to pay the soldiers and pay for the gear. It has been demonstrated throughout history that taxation is unneeded.
Switzerland has income tax, property tax, and VAT.
Cyan, I think sales tax is theft as well since there is a threat to the sellers to give the percentage from goods sold.
If food, beverages, medical drugs and devices, and healthcare services aren't taxed, the sales tax actually becomes more progressive than the income tax. The rich would then pay more for the non-necessities than the poor and middle class.
I hate the income tax system with an absolute burning passion. That being said. A sales tax is, by definition, a regressive tax, meaning it hits the poor hardest. That's not something we need.
Not if items such as food, and services such as medical, were at a lower rate.
A higher percent of a person salary is spent on food, shelter, medicaL, transportation and other necessities of life the lower their respective income is. The rich would make out like bandits, which they are.
Just don't tax the things you need to live, like food, rent, or healthcare.
1948 ... when you say that the rich would "make out like bandits" you mean because they get to keep more of what they earned, or because they give you less of what you didn't earn?
Not a fan of this idea.
While I agree that it's be a more fair approach, we could never trust politicians. I'm confident that they'd reinstitute an income tax and we'd end up paying both.
Absolutely. Totally fair. Like state sales tax.
Yes on a more and philosophical level.
On a practical level, I do like that the income tax is fairly easy to avoid once you reach a certain point.
No it's not.
That would be the most punitive tax on anyone making less than 100k per year. Since most of their purchases would be for necessities.
It would give you back all of your sales tax below a certain income level.
Liam "necessities" like alcohol, tobacco and drugs?
No. Like food and shelter.
Replace the bad tax code with another less bad tax code?
Only if an amendment was added to the constitution stating that income tax is abolished. The last thing we need is to implement a sales tax and then let someone bring the income tax back and then get stuck with both.
Yes. Just like the says. You can't have both.
Yes. I agree.
The fair tax act would abolish the IRS and the income tax to prevent double taxation.