A progressive sales tax.

[L00PY]

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy. As has been said before, someone making $10 million a year can live an extravagant lifestyle spending just 10% of their income, someone making $1 million a year can live very well spending only 20% of their income, someone making $100k a year can live a middle class life spending 50% of their income, and someone making the minimum wage will struggle to survive and spending every penny they earn.

Even if you give "prebates" back to everyone, it doesn't change the fact that the wealthy wouldn't be taxed at all on 80-90% of their income.

 

[Infohawk]

As mike pointed out, if you want to make a sales tax progressive you generally don't tax need goods. That would be easier than sending a rebate.

How about this alternative? If you want to qualify for low-income discounts, you would apply for a card (think social security card) that you would present to vendor and not tax you the higher rate. I'm not saying this is realistic though.

Originally posted by: piasabird
You are an idiot! What army of accountants will keep track of all of this? What line of intelligent thought led you to these ideas? The idea is to cut spending not increase it. Why do liberal socialists come up with all these ideas that create 10 tons of paperwork to save a few dollars?

Wow. Starting off directly with a personal attack. One might think you were some sort of salivating troll.

 

[Dr. Zaus]

Originally posted by: L00PY

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy. As has been said before, someone making $10 million a year can live an extravagant lifestyle spending just 10% of their income, someone making $1 million a year can live very well spending only 20% of their income, someone making $100k a year can live a middle class life spending 50% of their income, and someone making the minimum wage will struggle to survive and spending every penny they earn.

Even if you give "prebates" back to everyone, it doesn't change the fact that the wealthy wouldn't be taxed at all on 80-90% of their income.

Why is that a problem? If the money isn't being spent it's being invested and if it's being invested it is going to the betterment of everyone by increasing the amount being produced.

Those 10 millionaires don't pay anything near, say, 30%. One course corporate accounting should convince you of how easy it is to get around paying taxes.

The sick-sad truth is that the tax burden is, was, and forever will be on the backs of the upper-middle class. The super-rich don't pay nearly the percentage that our tax-code implies, it's those people making between 100 and 500k that end-up actual paying their taxes.

Once the bulk of your income stops coming from a pay-check you stop having to pay very much.

You are right, a refunded sales tax would create an inverted U shaped curve of percentage paid in taxes, but if you look at the actual income from taxation in % terms we see today you'll find the exact same thing.

The benefit is that the price/utility equilibrium for unnecessary products will change.

Originally posted by: blackangst1
It would almost be cheaper to buy overseas and ship it complared to estimates of 23-31%....trade deficit yay

Even people selling into the US would have to pay the sales tax, do you not pay sales-tax for Chinese items at wal-mart today?

Originally posted by: DrPizza
. Time that when faced with paying a 31% tax on my heating bill, will be spent splitting the firewood that I obtain for free. Faced with a 31% sales tax on food, you can bet that I'll stop buying most fruit, vegetables, and meat. (This fall, I froze & canned apples & applesauce; enough to last me for the year, with about 3 more bushels to take care of.) Faced with 31% tax on food, I'll end up canning & freezing about 80% of what I eat. Buy a new car? $6200 in tax on a $20,000 vehicle? F' that! You raise the price of my discretionary purchases that I make with extra money I have by 31% and you'll see me changing my mind about a lot of those non-necessities.

I was thinking about this before falling asleep last night:

if you spend your free time producing, then this is good for the economy. As long as the value of the produce you create is higher than the value you would have created using that time some other way, then your farming your own tomatoes is good for everyone.

If you could make more by not farming tomatoes, but rather doing a little extra PC-repair on the side, then it wouldn't make sense for you to want to spend your time farming instead of making the money to buy the food.

Originally posted by: Infohawk
As mike pointed out, if you want to make a sales tax progressive you generally don't tax need goods. That would be easier than sending a rebate.

How about this alternative? If you want to qualify for low-income discounts, you would apply for a card (think social security card) that you would present to vendor and not tax you the higher rate. I'm not saying this is realistic though.

Originally posted by: piasabird
You are an idiot! What army of accountants will keep track of all of this? What line of intelligent thought led you to these ideas? The idea is to cut spending not increase it. Why do liberal socialists come up with all these ideas that create 10 tons of paperwork to save a few dollars?

Wow. Starting off directly with a personal attack. One might think you were some sort of salivating troll.

This is a very good thought. We could have a sales tax based on income. Your employer gives you a 'tax card' which is scanned at the end of every purchase. If your purchases exceed your income then the government will know that there is fraud going on.

 

[Rainsford]

Originally posted by: bozack

Originally posted by: miketheidiot

isn't this normally accomplished by making 'need' goods like food tax free?

also i don't really like sales taxes in general. I would prefer a single, simplified, progressive income/dividend/capital gains tax, with lower base rates and fewer deductions. A sales tax is still much better than property taxes, which i think are the worst taxes externality wise of all, and probably the most regressive.

I agree with your first point, food and basic clothing should be either taxed lightly or tax free, but un-necessary luxury purchases (Most electronics, jewelery, designer clothing, luxury vehicles) should be taxed higher.

Though personally I would rather a higher sales tax and higher property tax and either low or no income...prop tax I know goes to my town, and sales tax I can always avoid by not buying things.

And that's why pretty much any plan that increases sales tax is a terrible idea. It provides a disincentive to buy things, which hurts the economy in the long run.

 

[her209]

What? Wait. So two people who spend the same amount per year will pay the same taxes regardless of how much each person makes?

 

[winnar111]

Originally posted by: L00PY

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy.

So what? Does the lower middle class not benefit from schools, roads, and police?

 

[Rainsford]

Originally posted by: winnar111

Originally posted by: L00PY

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy.

So what? Does the lower middle class not benefit from schools, roads, and police?

Of course they do, and if we rely more on the lower middle class to fund schools, roads and police, we'll have crappy schools, falling apart roads and a terrible police force. When it comes to taxes, there is a point at which practicality must come in. You can talk about what's fair and what's not, but the problem is that the poor people simply don't have any money. Increasing their taxes while lowering the taxes of the wealthy, while it might satisfy some element of fairness, just isn't going to work.

 

[winnar111]

Originally posted by: Rainsford

Originally posted by: winnar111

Originally posted by: L00PY

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy.

So what? Does the lower middle class not benefit from schools, roads, and police?

Of course they do, and if we rely more on the lower middle class to fund schools, roads and police, we'll have crappy schools, falling apart roads and a terrible police force. When it comes to taxes, there is a point at which practicality must come in. You can talk about what's fair and what's not, but the problem is that the poor people simply don't have any money. Increasing their taxes while lowering the taxes of the wealthy, while it might satisfy some element of fairness, just isn't going to work.

If they're buying products that have a sales tax on them (not food, simple clothing, etc), by definition they simply do have money to spend.

More importantly, sales tax is a lot more transparent than the income tax, which a solid proportion of the public doesn't even pay. People notice the effects of it since its not 'that other guy' paying it. I have to laugh at all the whiny college brats who complain about paying another $.06 on their Subway footlong while cheering the idea of taxing millionaires to the tune of hundreds of thousands of dollars.

People will consume and buy things eventually. A better argument can be made about Amazon and company dodging the tax.

 

[Rainsford]

Originally posted by: winnar111

Originally posted by: Rainsford

Originally posted by: winnar111

Originally posted by: L00PY

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy.

So what? Does the lower middle class not benefit from schools, roads, and police?

Of course they do, and if we rely more on the lower middle class to fund schools, roads and police, we'll have crappy schools, falling apart roads and a terrible police force. When it comes to taxes, there is a point at which practicality must come in. You can talk about what's fair and what's not, but the problem is that the poor people simply don't have any money. Increasing their taxes while lowering the taxes of the wealthy, while it might satisfy some element of fairness, just isn't going to work.

If they're buying products that have a sales tax on them (not food, simple clothing, etc), by definition they simply do have money to spend.

Except they'll spend less because the increased tax burden will impact their disposable income by quite a bit. They might have money to spend on things NOW, but they don't have a lot of extra money to spend paying more taxes.

More importantly, sales tax is a lot more transparent than the income tax, which a solid proportion of the public doesn't even pay. People notice the effects of it since its not 'that other guy' paying it. I have to laugh at all the whiny college brats who complain about paying another $.06 on their Subway footlong while cheering the idea of taxing millionaires to the tune of hundreds of thousands of dollars.

You're arguing fairness again, which is great, except it has nothing to do with reality.

 

[winnar111]

Originally posted by: Rainsford

Originally posted by: winnar111

If they're buying products that have a sales tax on them (not food, simple clothing, etc), by definition they simply do have money to spend.

Except they'll spend less because the increased tax burden will impact their disposable income by quite a bit. They might have money to spend on things NOW, but they don't have a lot of extra money to spend paying more taxes.

More importantly, sales tax is a lot more transparent than the income tax, which a solid proportion of the public doesn't even pay. People notice the effects of it since its not 'that other guy' paying it. I have to laugh at all the whiny college brats who complain about paying another $.06 on their Subway footlong while cheering the idea of taxing millionaires to the tune of hundreds of thousands of dollars.

You're arguing fairness again, which is great, except it has nothing to do with reality.

Where's the proof that they'll spend less? You scoff at the idea that people might not earn as much income because of a higher income tax, but you believe that people who have $1000 to buy Xmas presents this year won't spend that $1000?

And a sales tax is about more than fairness. That's part of it, but transparency in the tax system helps society have a debate on what tax level is desirable. And its the easiest to collect.

 

[brandonbull]

Originally posted by: Zorba
Sales tax discourages spending, which hurts the economy as well. That is the good thing about an income tax no matter the rate, you'll always want to make more money. If I all of sudden had to pay a 30% tax on a TV or car, I would never buy a new one.

I also don't see how people think the Feds could get all the money they needed with a reasonable sales tax, cities in Oklahoma charge over 9%. In Arkansas there are cities over 10%. If cities need to charge 9+% sales tax, plus high property taxes to balance their budgets, how much would the fed have to charge?

You would never buy a car if it had a high sales tax? Wow! Must be nice to live in an area with great mass transportation.

 

[Brainonska511]

A progressive sales tax seems pretty oxymoronic, seeing as sales taxes are inherently regressive.

 

[Genx87]

The sick-sad truth is that the tax burden is, was, and forever will be on the backs of the upper-middle class. The super-rich don't pay nearly the percentage that our tax-code implies, it's those people making between 100 and 500k that end-up actual paying their taxes.

Once the bulk of your income stops coming from a pay-check you stop having to pay very much.

This is the fugly truth a lot of people dont seem to grasp when they yap all day long about the rich not paying their "fair share" of income taxes.

 

[Modelworks]

Taxes are already complicated enough.
I go to the grocery store and have 3 different tax rates .

I also never understood why people that get checks from the government like social security have to pay taxes on what they buy. Isn't that like the government paying itself a portion of everyones check ?

 

[dmcowen674]

The people with the most money will never pay their fair share.

How do you think they got the most money?

 

[winnar111]

Originally posted by: Zorba
Sales tax discourages spending, which hurts the economy as well. That is the good thing about an income tax no matter the rate, you'll always want to make more money. If I all of sudden had to pay a 30% tax on a TV or car, I would never buy a new one.

I also don't see how people think the Feds could get all the money they needed with a reasonable sales tax, cities in Oklahoma charge over 9%. In Arkansas there are cities over 10%. If cities need to charge 9+% sales tax, plus high property taxes to balance their budgets, how much would the fed have to charge?

Why do people want to make more money? To stuff it under a mattress?

 

[PingSpike]

Originally posted by: winnar111

Originally posted by: Rainsford

Originally posted by: winnar111

Originally posted by: L00PY

Originally posted by: DixyCrat
Any reasonable economic advisor will tell you that a sales tax is the best way to allow for the government to do the most good. The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

Actually, the problem with replacing the income tax with a sales tax is that the tax burden shifts downwards because the wealthy spend less of their income than the less wealthy.

So what? Does the lower middle class not benefit from schools, roads, and police?

Of course they do, and if we rely more on the lower middle class to fund schools, roads and police, we'll have crappy schools, falling apart roads and a terrible police force. When it comes to taxes, there is a point at which practicality must come in. You can talk about what's fair and what's not, but the problem is that the poor people simply don't have any money. Increasing their taxes while lowering the taxes of the wealthy, while it might satisfy some element of fairness, just isn't going to work.

If they're buying products that have a sales tax on them (not food, simple clothing, etc), by definition they simply do have money to spend.

More importantly, sales tax is a lot more transparent than the income tax, which a solid proportion of the public doesn't even pay. People notice the effects of it since its not 'that other guy' paying it. I have to laugh at all the whiny college brats who complain about paying another $.06 on their Subway footlong while cheering the idea of taxing millionaires to the tune of hundreds of thousands of dollars.

People will consume and buy things eventually. A better argument can be made about Amazon and company dodging the tax.

This is another good reason that this will never happen. The income tax is complicated so that when people open their mouth to complain about it they have a brain fart and go home instead. The sales tax is very transparent, so people will get pissed because its actually clear how bad they're getting raped!

Also, this plan will fuck old people that paid income tax their whole lives and would now have to pay higher prices for goods with their earnings that were effectively reduced during their earning years by taxation.

 

[piasabird]

Maybe I am a little too overzealous in my handling of this sales tax issue.

I am really against forcing states to have to go ask the federal government for their own money back. Instead keep most of the money at the state level and this reduces the number of federal employees needed. In fact I am even against sending tax money to the State as well and keeping more of it at the city level, and the county level.

One issue is that when times get rough, people spend only the money they need to survive. So when things get rough, that is when the least tax is collected from sales receipts. Then there is the so-called sin tax issue with items like Tobacco and Liquer. I never understood this sin tax concept and why the federal government gets to tax it? Who gave them the right to control everything. How come we dont have a marriage Tax?

 

[SagaLore]

Originally posted by: dmcowen674
The people with the most money will never pay their fair share.

How do you think they got the most money?

Well they already pay well over their equal share. How do you define fair?

 

[EagleKeeper]

Originally posted by: SagaLore

Originally posted by: dmcowen674
The people with the most money will never pay their fair share.

How do you think they got the most money?

Well they already pay well over their equal share. How do you define fair?

Dave definition:
Anyone that pays more than he does because they have more than him.

 

[Dr. Zaus]

Originally posted by: RainsfordExcept they'll spend less because the increased tax burden will impact their disposable income by quite a bit. They might have money to spend on things NOW, but they don't have a lot of extra money to spend paying more taxes.
.

How does spending less mean less economic wealth? Would money spent on investment instead of consumption be a bad thing?

 

[Insomniator]

Wait, what do you invest in if people aren't buying anything?


Also, on a side fantasy note, how about we just cut all taxes in half and force our crappy institutions to be efficient instead of incredibly wasteful.

 

[Jack Ryan]

Originally posted by: DixyCrat
The only problem is that, with a sales tax, those who can least afford to pay for the taxes end-up paying the most in taxes.

What? How so?

The people who buy the most stuff pay the most tax. Ohhh maybe you mean the people that continue to buy on credit?

 

[Jack Ryan]

Originally posted by: dmcowen674
The people with the most money will never pay their fair share.

How do you think they got the most money?

Oh my goodness. "Fair share"

Please tell me how 1 human paying more actual dollars than another is fair in any logic system.

Everyone paying 10% isn't even "fair" although it is better than the crap we have now.

For goodness sake people, wake the f up and stop thinking that everyone who makes more money than you is evil and must pay a higher share of the taxes "because they have it".