I don't know about these tax cuts and all, but...

[DesignDawg]

Hey all,

I don't know about this big tax cut thing.... I have a pretty good idea where I stand, but I won't say... But I do know one thing for SURE. WE HAVE TO GET RID OF THE DAMN MARRIAGE TAX PENALTY. It SUCKS HARD! This year was the first time I have had to deal with it, and it cost me a lot of money! I was expecting a pretty hefty refund. NOPE. I hope, while all the arguing and partisan bickering and fighting is going on, they can all agree to and just GO AHEAD AND FIX that part of tax law.

Ricky
DesignDawg

 

[yakko]

We need to get rid of income tax altogether and go with a national sales tax. A 1% national sales tax with absolutely no exemptions for anyone ever would make them more money than they get now and it would be fair.

 

[DesignDawg]

Federal sales tax, huh? So do you mean like, since my state tax is 7%, I would pay 8% on anything I bought? Sounds good, I guess. I have never heard the numbers that would result from this, but certainly it would take all the "the tax breaks benefit the rich" crap out of the picture. I'd like to hear more about this if you have any numbers. Also, though, I am pretty sure this will never happen.

Ricky
DesignDawg

 

[Ornery]

Well the penalty is nasty, but it shouldn't have hit you that hard. Did you figure your taxes separately? Did you both have enough withheld during the year? In other words, would your wife have gotten a refund filing single?

 

[wyvrn]

A group in Texas found that no income tax, with a 15% sales tax (as opposed to the 8% we pay now) would yield more money than our current system. It would size down the IRS and get rid of the stupid income tax system and all its 1000 different exemptions. Everyone would pay only on what they spend, so the rich would pay proportionate to what they consume, and down the line.


A sales tax sounds more fair, simple, and effective than our current stooopid system.

 

[Adul]

I agree about a national sale tax. But the rich would be oppose to it I would think. Basterdss...

 

[ArkAoss]

but man, 15% ??? would that be even across gas and cigs? or is that in addition to state? 6% here in ct is ok, and income was nice, getting back enough to cover my frickin rediclouous fedral bill.

 

[yakko]

wyvrn,

The reason that group is stating 15% is because they still want to give exemptions. Giving exemptions is not fair. Nobody should get an exemption. Churches, wholesalers, non-profits or businesses. Everyone pays everytime something is bought or sold. Period. I will try to get the number from the local group that is promoting this and post them or a link to their site. It probably never will get passed because companies would no longer get a tax write off for donating to political candidates so they would no longer contribute. If businesses no longer contributed where would politicians get the large amounts of money to spend on campaigning?

 

[Static911]

the way WE WERE going with clinton administration, i swear i saw deja vu with a socialist nation..hopefully, bush gets it right by consolidating some of the government and its expenditures

Static911

 

[JasonG]

Actually a national sales tax would hurt the poor more than the current system, I think. Since the rich can afford to pay the extra tax whereas the poor would be hit hardest. With the graduated tax system, the poor pay a lower percentage of their income in tax.

I do think the marriage tax penalty is stupid though.

Hopefully they'll get rid of the dealth (estate) tax as well.

Jason

 

[jjm]

A national sales tax hits the lower and middle income bracket harder since they spend more of their income (as a percentage) and save less.

Tax policy is both a revenue collection tool and a social policy tool. Both parties like it that way. For all the rhetoric in the recent past, nearly all tax policy attempts to target behaviors. Note the effort to increase charitable giving as an example.

 

[charrison]

It is a consumption tax. You choose to pay taxes at this point, not forced to pay taxes. This would be a much better system.

 

[yakko]

A national sales tax does not hit anyone harder except the people buying. It would actually help the poor if there were no exemptions because the percentage would be less than they are paying now and they would no longer pay inome tax.

 

[Eug]

It's very basic economics, taught even in high school. It DOES hit the poor more heavily, since even the bare necessities are taxed. So Joe Poor with no wife and kids probably needs 3 rolls of toilet paper for say a couple of weeks. Joe Rich with no wife and kids probably needs the same 3 rolls of toilet paper, and gets taxed the same amount.

If Joe Rich gets paid 10 times as much salary, that means Joe Poor is being taxed at 10 times the rate for toilet paper.

This way the tax system works so that the poor are the most heavily taxed and the rich are least heavily taxed on the basic stuff. For luxury items obviously the rich are paying more, but overall, the rich can end up being in the lowest tax bracket effectively.

This is why the concept of exemptions exist.

By the way, we already have this in Canada, in addition to income tax.

 

[Linflas]

Actually it would hit Joe Rich harder because in addition to buying 2 or 3 rolls of toilet paper he most likely will be buying expensive cars, yachts, planes, jewelery etc. The problem here is more one of perception. The single most attractive feature of a national sales tax to me is that it taxes anyone that purchases something no matter where the money comes from.

 

[Fingers]

I think they should legalize pot and put a %200-%300 tax on it. that should make a sizable sum of money.

 

[Napalm381]

Another way of viewing the issue is that it hits poor people harder because they, out of necessity, must spend more money on goods. If you make 15000 dollars a year, you need to spend a pretty hefty portion of that income just on basics such as food, housing, etc. Wealthier people have much more discretion in their spending habits. Some can spend extravagantly, while some don't.

 

[classy]

Yea the marriage penalty is rough. But I think they will do away with it here in the near future.

 

[Linflas]

That is a good point and one there is no real answer to when discussing the idea of a national sales tax replacing the income tax. That is why there are flat tax proposals floating around that do have a minimum cut off level. Decide what the minimum amount of income a person/family needs to survive and exempt it from taxation. Then apply a single rate to all earned income above that amount. The problem then becomes that politicians of any persuasion love to use the tax code to try and influence behavior in various ways. I am afraid if we had a simple flat tax it would not last very long before someone tacked just one thing on it in the name of "insert pet cause/peeve here".

 

[Parrotheader]

The marriage penatly is rough, but more often than not you can work around it by filing separately. Like somebody else above said, what they REALLY need to get rid of is the death/estate tax. How anyone can justify that kind of cruel taxation is beyond me (and I'm one of those 'cold' Republicans). When you say 'estate' tax, people always think of lavish millionares and figure 'screw em' they deserved to be taxed. But that tax alone has absolutely obliterated the small farming community. It hurts everyone and at one of the worst possible times.

 

[jjm]

The poor already pay zero tax. A national sales tax would make them pay more than they pay now.

The reason that this debate will go on forever is because people have different ideas as to what constitutes "fairness."

The most rigid is the notion that everyone should pay the same percentage, regardless of income level.

An alternate view is to adjust the tax impact so that a level of basic income (for a minimum standard of living) escapes taxes, but the revenue shortfall is made up for by taxing larger bands of income at progressively higher rates.

I tend to agree with the latter. And politicians like being able to use tax policy to coax behaviors they want to encourage, so this will not change soon.

EDIT

Parrot: No need to eliminate it, just raise the limit. At the end of the last session the Ds proposed a compromise that would have exempted 80%+ of those who would currently be hit by it. But the Rs insisted on full repeal of the estate tax or nothing. Interestingly, GWB is trying to supress talk of full repeal because his own figures show he can't do that along with missle shields, prescription drugs, etc.

 

[vi edit]

For me a federal sales tax would be far more beneficial than the current method. I'll use an 8% federal sales tax on top of the standard state tax of 6% for this example.

At 45,000 I fall into about the 25% federal tax bracket. 25% of that is about $11,000. That's $11,250 of my earnings going to unkie sam. That leaves me with about $34,000. Out of that 33k, 8k of it is invested and another 7k goes to rent for the year. I've got roughly 18k left over to spend. Basically $11,000 gets shipped off to federal piggy.

Now, if there was a federal sales tax, I would keep my 45,000(not counting state). I would invest my $8,000 and pay my rent for another $7,000. So now I'm down to 30,00. Assuming that I spent every single dime of that 30,000 the feds would only get $2,400 off of me(.08 * 30000).

Oversimplified? Probably