A progressive sales tax.

[Dr. Zaus]

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.

I have a solution: a progressive sales tax.

On a monthly basis the government refunds a portion of the taxes collected, this refund is regardless of actual income or money spent. For example: If we determine that being impoverished means you should be spending a minimum of $2000 a month and we further determine that the sales tax should be 10%.:

Then each month everyone in America would get a check for $200 to compensate them for the taxes paid on the first $2000 each month.

 

[Farang]

How much does it cost to print the checks?

 

[Dr. Zaus]

Originally posted by: Farang
How much does it cost to print the checks?

if this replaces the IRS it'll net a great deal of savings.
if we give people bank-accounts for this to be direct-deposited into it'll cost next to nothing.

 

[Zorba]

My wife and I make a lot of money and we almost never spend more than 2K a month on things that have sales tax. Mortgage, car payment, insurance and utilities have no sales tax. Charging sales tax on houses would massively discourage buying houses, imho.

Edit: Typo

 

[Farang]

hehehe.... "massively discharge"

 

[sandorski]

Too complicated.

 

[miketheidiot]

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.

I have a solution: a progressive sales tax.

On a monthly basis the government refunds a portion of the taxes collected, this refund is regardless of actual income or money spent. For example: If we determine that being impoverished means you should be spending a minimum of $2000 a month and we further determine that the sales tax should be 10%.:

Then each month everyone in America would get a check for $200 to compensate them for the taxes paid on the first $2000 each month.

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.

 

[StageLeft]

Sounds somewhat similar to that simple tax plan that some people keep touting about sales taxes paying for basically everything, but the lower classes get monthly rebates.

 

[DrPizza]

If you're suggesting this as a replacement to the income tax, once again I'll have to point out the obvious that the "fair tax" people keep forgetting:

The people who make the most money, aka the people who are able to invest the most money because they have the most leftover after purchasing what they need, will benefit from this by having reduced taxes. You might be thinking "that's great! they can invest the money in our economy and help it to grow, thereby benefiting everyone." But, there are two fallacies to that: 1. Our gov't isn't going to spend less. If the uber-rich pay less in taxes, YOU're going to be paying more. 2. Who said they had to invest in OUR economy? My 403B had a pretty significant percentage invested in foreign stocks (til my advisor advised me to pull out of stocks & stick my money into bonds & guaranteed interest savings.)

Simply put, the gov't is going to take in the same amount of taxes, regardless of the tax plan. Any attempt at a new tax plan is simply a re-distribution of how those taxes are going to be collected.

 

[Engineer]

Originally posted by: sandorski
Too complicated.

This.

 

[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?

 

[Zenmervolt]

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.

I have a solution: a progressive sales tax.

On a monthly basis the government refunds a portion of the taxes collected, this refund is regardless of actual income or money spent. For example: If we determine that being impoverished means you should be spending a minimum of $2000 a month and we further determine that the sales tax should be 10%.:

Then each month everyone in America would get a check for $200 to compensate them for the taxes paid on the first $2000 each month.

Doesn't even have to be that complicated. Tax based on whether an item is a luxury good or not and then on how "luxurious" it is. We already do something similar with staple food items. Basic foods like chicken, beef, etc (foods that are not prepared for consumption) are not taxed at all. Why not a system where a car like a Yaris is taxed less than a Camry and where there are higher taxes on optional items for things like cars (the base model is taxed at X%, higher trim levels are taxed at higher percentages, and option packages are taxed at a higher rate as well)?

This would also encourage fiscal responsibility since unnecessary things like TV's or other electronics would carry higher taxes and therefore people would be discouraged from spending money on things like iPhones because the extra taxes would discourage it.

That omits the complications of having to issue a fixed refund while still maintaining a graduated system.

ZV

 

[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.

 

[Dr. Zaus]

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?

the state of Texas, not a communist country, has a sales tax which does not require an 'army of accountants'.

I don't see as how a sales tax is all that complex, and we already have a system by which we send everyone in the country checks.

 

[Zorba]

Originally posted by: Zenmervolt
We already do something similar with staple food items. Basic foods like chicken, beef, etc (foods that are not prepared for consumption) are not taxed at all.

This depends on the State. In Oklahoma everything is taxed, except for vehicles, which have excise tax.

 

[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?

 

[DrPizza]

on second thought...

I've read all the fair tax stuff before. A national sales tax is an idiotic (in my opinion) idea. The country saves only a few billion dollars (if they eliminate the IRS.)

The U.S. gov't is going to need to collect the same amount of money. A different scheme for collecting that money isn't going to change the amount they need to collect. But sure, go ahead and try.

Honestly, though, I've seen the figures for a national sales tax. It's a bit higher than your 10% estimate. the main group pushing for this = 23% But, I can't believe people fall for that hair-brained scheme. Sure, I'll save more money & spend less. People with less money than me won't be able to spend quite as much less. And, (this is the important one), people with much more money than me will be able to save much much more.

Seriously, a 23% federal sales tax, on top of an 8% sales tax (in this state) = 31% sales tax??! Without me having to pay the fair tax on the first $20,000 of my purchases?? That sounds great to me. Of course, since that group is pushing for the "fair tax", it's quite reasonable to conclude their 23% estimate is their best case scenario; or at least leaning in the direction of "as low as we think it could possibly be and still work." Personally, I can be a rather thrifty person. I realized that the television shows I typically watched are all available online. For 5 months, I haven't had directv; and I'm getting more and more used to not having any television in the house at all. I'm more active & waste a lot less time. 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.

This is like a poker game. If you're at the table and you don't know who the sucker is, it's you. The government is going to collect the same amount of taxes. Some people are going to pay more than before; some people are going to pay less than before. And a lot of people are claiming that their group is going to be paying less.

From the Fair Tax people:

Who will win under the FairTax? We all will become winners.

<cough> bullshit </cough>
So, we'll all pay less tax, yet the government will collect just as much? People are gullible enough to believe that?? OMG!!! I kept reading some more on one of the fair tax pages. Because corporate income taxes will be dropped, the price of goods will drop by as much as 30%. So, a $100 item will now sell for $70, because the gov't isn't collecting taxes from the corporation. Then, you'll pay $70 + 23% = $86.10 , and you don't pay income tax. Yet, the gov't collects the same amount of money? People are that naive??

 

[Thump553]

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. * * *

Any authoirty for this statement? It certainly is news to me.

As said above, your system would discourage economic activity (consumption) and thus lead to a shrinking, rather than growing, economy.

Your system would also be biased towards those who undeerconsume-like the elderly-and hurt those at the stage of life who consume more than the usual, such as young couples (and individuals) just starting out.

What happens to people in an emergency-such as having to replace a lifetime's worth of goods because of a natural diaster, or huge uninsured medical bills? Nothing.

I think this is an unnecessarily complicated system, probably unworkable, based upon a faulty premise.

 

[smack Down]

Originally posted by: DixyCrat

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?

the state of Texas, not a communist country, has a sales tax which does not require an 'army of accountants'.

I don't see as how a sales tax is all that complex, and we already have a system by which we send everyone in the country checks.

The only reason state sales tax works is because of the IRS. Get ride of the IRS and all state sales taxes would fall apart.

 

[Capt Caveman]

Originally posted by: smack Down

Originally posted by: DixyCrat

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?

the state of Texas, not a communist country, has a sales tax which does not require an 'army of accountants'.

I don't see as how a sales tax is all that complex, and we already have a system by which we send everyone in the country checks.

The only reason state sales tax works is because of the IRS. Get ride of the IRS and all state sales taxes would fall apart.

How is the IRS involved with state sales taxes?

 

[Dr. Zaus]

Originally posted by: smack Down

Originally posted by: DixyCrat

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?

the state of Texas, not a communist country, has a sales tax which does not require an 'army of accountants'.

I don't see as how a sales tax is all that complex, and we already have a system by which we send everyone in the country checks.

The only reason state sales tax works is because of the IRS. Get ride of the IRS and all state sales taxes would fall apart.

Huh? Texas enforces it's own sales tax without need to look at income tax returns.

Originally posted by: DrPizza
on second thought...

I've read all the fair tax stuff before. A national sales tax is an idiotic (in my opinion) idea. The country saves only a few billion dollars (if they eliminate the IRS.)

The U.S. gov't is going to need to collect the same amount of money. A different scheme for collecting that money isn't going to change the amount they need to collect. But sure, go ahead and try.

Honestly, though, I've seen the figures for a national sales tax. It's a bit higher than your 10% estimate. the main group pushing for this = 23% But, I can't believe people fall for that hair-brained scheme. Sure, I'll save more money & spend less. People with less money than me won't be able to spend quite as much less. And, (this is the important one), people with much more money than me will be able to save much much more.

Seriously, a 23% federal sales tax, on top of an 8% sales tax (in this state) = 31% sales tax??! Without me having to pay the fair tax on the first $20,000 of my purchases?? That sounds great to me. Of course, since that group is pushing for the "fair tax", it's quite reasonable to conclude their 23% estimate is their best case scenario; or at least leaning in the direction of "as low as we think it could possibly be and still work." Personally, I can be a rather thrifty person. I realized that the television shows I typically watched are all available online. For 5 months, I haven't had directv; and I'm getting more and more used to not having any television in the house at all. I'm more active & waste a lot less time. 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.

This is like a poker game. If you're at the table and you don't know who the sucker is, it's you. The government is going to collect the same amount of taxes. Some people are going to pay more than before; some people are going to pay less than before. And a lot of people are claiming that their group is going to be paying less.

From the Fair Tax people:

Who will win under the FairTax? We all will become winners.

<cough> bullshit </cough>
So, we'll all pay less tax, yet the government will collect just as much? People are gullible enough to believe that?? OMG!!! I kept reading some more on one of the fair tax pages. Because corporate income taxes will be dropped, the price of goods will drop by as much as 30%. So, a $100 item will now sell for $70, because the gov't isn't collecting taxes from the corporation. Then, you'll pay $70 + 23% = $86.10 , and you don't pay income tax. Yet, the gov't collects the same amount of money? People are that naive??

Great post.

Here's the deal: do you think it is bad to consume less? if you do, you've been brainwashed into thinking that the economic power of america is in it's willingness to mindlessly buy-buy-buy.

This is false.

we would all have more if we didn't allocate so many resources to things we throw-away.

Originally posted by: Thump553

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. * * *

Any authoirty for this statement? It certainly is news to me.

There? s a limited amount of land labor and human capital. If people where saving their money then the government could put more into helping people: IE we would have more free resources for education. Every taco you by is allocating the wealth of the nation in a way that encourages taco production. If we saved more then everyone can buy a house for less money.

If the price of crap-items goes up then the cost-to-utility ratio may make some items less worthy of the market and thus re-allocate the market towards items we find ?worth the money?.

 

[Siddhartha]

Originally posted by: sandorski
Too complicated.

And who would keep track of a progressive sales tax? The IRS maybe...

 

[Kirby]

I guess they could have a higher sales tax rate for Mercedes and arugula.

 

[cubby1223]

Originally posted by: DrPizza
on second thought...

I've read all the fair tax stuff before. A national sales tax is an idiotic (in my opinion) idea. The country saves only a few billion dollars (if they eliminate the IRS.)

The U.S. gov't is going to need to collect the same amount of money. A different scheme for collecting that money isn't going to change the amount they need to collect. But sure, go ahead and try.

<snip>

I kept reading some more on one of the fair tax pages. Because corporate income taxes will be dropped, the price of goods will drop by as much as 30%. So, a $100 item will now sell for $70, because the gov't isn't collecting taxes from the corporation.

That lower price tag to retailers will improve the competitiveness of domestically produced products compared to the international competition. But that has no benefit for our country, right?

 

[blackangst1]

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