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Why Not National Sales Tax.

Discussion in 'Political Discussion' started by JR4, Mar 15, 2006.

  1. JR4

    JR4 In the Starting Line-up PatsFans.com Supporter

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    Instead of income tax why not national sales tax on goods/services
    purchased?

    Why would I be in favor of such a thing.

    1. with one in 20 workers being illegal they would pay taxes also
    2. people can control the amount of taxes they must pay by regulating
    how much they spend on non essential items.
    3. People may tend to save more.
    4. In the long run it could lead to a healthier economy ... as this nation
    moves way from being a debtor nation.
    5. Government would save a lot by not have to maintain the IRS monster.
    6. People's privacy would be better secured as no detailed income reporting
    would be neccessary.
    7. if properly done it would be harder to evade paying taxes.

    Any thoughts
  2. scout

    scout Rookie

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    #15 Jersey

    I think it has merit. Would have to be done by a third party as neither the Dems or Rep. would pass it. It would also greatly reduce the amount of cheating (thus, loss of revenue). The problem would be the loopholes and political helping hands. For instance, right now you can get better tax breaks with a big gas guzzling Hummer then you can with a terrorist hurting hybrid. In this tax scenario, I could see higher cost automobiles, yachts, mansions, etc. getting perferred a tax treatment of some kind. The government needs to rid itself of what is now the IRS. Change its function under this new tax plan. While they are at it, they can also start phasing out the U.S. Post Office, or change its dynamics. I don't see any of this happening soon. Look how long it took Congress to stop delivering ice at each politicians door.
  3. Pujo

    Pujo Rookie

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    Scout touched on it. A national sales tax system wouldn't allow for tax breaks, and there are too many special interests looking for tax breaks. It would also be a "flat tax" and go against the liberal ideolagy that the rich should pay a higher % of taxes. My belief is that it's simply too good of an idea to pass in Washington.
  4. JR4

    JR4 In the Starting Line-up PatsFans.com Supporter

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    It really isn't a Flat tax if you consider what low income vs high income people buy.
    as an example:
    High Income beople buy $40,000 Cars
    Low Income people by second hand $5000 cars
    In this case high income people would pay 8 times as much as low income.

    But if you can afford a $40,000 car you probaly can afford the associated
    national sales tax.
    Last edited: Mar 15, 2006
  5. Pujo

    Pujo Rookie

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    It's still considered a flat tax because both people pay the same percentage.

    Same with income tax. If we had a flat tax, say 20%, someone making $1 million a year would pay 20 times as much as someone paying $50,000 a year, but they are still both paying 20%. Under or current system, you pay one percentage for income up to a certain level, then another for the next bracket, and so forth.
  6. scout

    scout Rookie

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    #15 Jersey

    Certain items should be exempted, for example drugs and anything doing with medical as it pertains to health. Cosmetic surgery would not be exempted unless it was in the best interests of health. Groceries would have to be in certain categories. For example, milk, bread and baby formula taxed at a lower rate then caviar and fine wine. Homes would be the greatest tax liability and you can be sure there would be lobbyist holding this tax formula hostage. I would be interested in more discussions pertaining to this system.
  7. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    This proposal along with Steve Forbes proposal makes the most sense, this way everyone chips in evenly. There are so many loopholes for business and personal expenses a lot of folk I know do not pay near as much as I do for the same income, there needs to be a drastic change. I wonder if one of the parties adopted this as their platform plank it could help them get elected?

    On the other hand it is very difficult to change something as institutionalized as the IRS.
  8. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I think the sales tax has some merit, but it also raises a lot of issues and it's also regarded as a regressive tax since the poor have no choice but to spend a larger share of their income. Also,
    - What would the sales tax have to be?
    - How would such a tax affect consumption?
    - For people already in the 10% tax bracket, who more than likely spend every penny they have, would a sales tax actually put a larger burden on them?
    - How would we prevent the rise of a mightier black market and a barter economy?
    - Would stocks and bonds be subject to the tax? How about rent? How about health care?
    - Would the IRS be any better if it was now charged with monitoring sales tax fraud, rather than income tax fraud?
    - Would businesses pay the same sales tax and, if so, would their inability to write off losses or depreciation, etc., have far reaching consequences on their viability?
    - Would the fact that wealthy people often save more than they spend mean that their tax burden (on income and investments) would actually decline, and would that push the consumption tax rate even higher?

    It's an interesting idea, and maybe it could be fairer than an income tax, but I think it simply introduces a new set of inequities and other problems, as well as a daunting set of implementation issues.
  9. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I'm in favor. You'd have to have different rates, though (to be "fair").

    Necesseties for life (food, clothing) wouldn't be taxed.
    Run of the mill things (TVs, CDs) would get the standard rate.
    Luxury items (Mercedes, yachts) would be taxed at a higher rate.

    Bang. Done. No more f'n IRS.
  10. gomezcat

    gomezcat It's SIR Moderator to you Staff Member PatsFans.com Supporter

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    Beware. We have a 17.5% Sales tax on many things and it is simply seen as a way of the Government getting more money out of people. It is worth bearing in mind that things like health insurance might end up attracting the tax, which I understand would add to an already astronomical bill. There IS a way to dodge the tax. You just pay people in cash for a discount and they don't declare the income.
  11. Turd Furguson

    Turd Furguson Rookie

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    The left is against this because it doesnt penalize successful people enough.

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