US National Sales Tax...

[drebo]

What would you have the government reduce spending on?

Everything?

Close some of the military bases we have in over 200 countries. End the ridiculous, pointless, worthless wars. Reduce the military size. Reduce non-compensation benefits to congressmen/senators and other government workers (they don't need private jets or multiple offices in multiple cities). Streamline welfare systems so that they are provided on a true need basis, and make welfare "in-kind" only (for example, WIC programs and soup kitchens). Close down/consolidate a large number of federal programs and departments. Etc. Etc.

There is a LOT of waste at the federal level of our government, and nearly everything should be cut. Literally nothing cannot be reduced without compromising the intended goal of the program.

 

[drebo]

Politics comes into play when determiing non-essential goods.

Cheese dip vs cheese slices
Salsa vs tomatoes
avacodoes

Parkas (New England - branded Patriots) vs (Miami - branded Dolphins)
as another stated, housing, transportation.

Face lift for Hollywood vs Jane Doe

Once you start to pick & choose, you can easily end up with the same mess we already have.

And the mess it would make for retailers that have to accomindate both items

Why? Go to California and buy something. Non-prepared food items are already exempt. So are services. The facilities are already there, and the precidents already exist. The federal government would have very little to do to implement such an exemption, and every single retail software package already has the ability to mark items as tax-exempt.

 

[dullard]

What would you have the government reduce spending on?

The big three are the only ones really worth considering: medicare, social security, and defense. Anything else is just a drop in the bucket. This will make both democrats and republicans mad. But the cuts need to be done.

Medicare is reduced by allowing the Medicare formula law to occur as passed (started in the 1980s I believe, last fixed in 1997). This will mean 25% less payments to doctors. Sorry, but your surgeon will now make $500,000 a year instead of $600,000. That is the pain that we will have to endure to fix medicare.

Social security was a good idea when it passed: the retirement age was HIGHER than the life expectancy. Only those who outlived what they had planed to live were given money. Now we expect nearly 20 years of living off of society in retirement. That has to be fixed dramatically.

Our yearly military spending: $663 billion (if you don't include spending on debt or interest) and $1.4 trillion (if you do). Rest of the world COMBINED : $904 billion. We simply can't keep spending the same as the rest of the entire world. The world needs to police itself. We have to admit that we don't need to win every war in every remote location. And then once we admit that, we will realize that we shouldn't be there militarilly in all cases.

 

[Brovane]

The big three are the only ones really worth considering: medicare, social security, and defense. Anything else is just a drop in the bucket. This will make both democrats and republicans mad. But the cuts need to be done.

Medicare is reduced by allowing the Medicare formula law to occur as passed (started in the 1980s I believe, last fixed in 1997). This will mean 25% less payments to doctors. Sorry, but your surgeon will now make $500,000 a year instead of $600,000. That is the pain that we will have to endure to fix medicare.

Social security was a good idea when it passed: the retirement age was HIGHER than the life expectancy. Only those who outlived what they had planed to live were given money. Now we expect nearly 20 years of living off of society in retirement. That has to be fixed dramatically.

Our yearly military spending: $663 billion (if you don't include spending on debt or interest) and $1.4 trillion (if you do). Rest of the world COMBINED : $904 billion. We simply can't keep spending the same as the rest of the entire world. The world needs to police itself. We have to admit that we don't need to win every war in every remote location. And then once we admit that, we will realize that we shouldn't be there militarilly in all cases.

The problem that I have with Medi-care and SS is that they are funded by payroll deductions. I would recomend that we actually remove medi-care and SS from the federal budget and place them on there own. They would need to be funded solely by payroll deductions. That way when there is a surplus the funds cannot be raided. We can then look at medi-care and SS on its own. The problem with cutting medi-care is that fewer and fewer doctors are taking medi-care patients. If you cut to much the doctors will just stop taking new patients.

The issues with military funding are fairly complicated. However as a % of GDP (4.6%) we are not that high. We need to police the world since we are the sole remaining super power. Who else is going to do it? We cannot just stick or heads in the sand and pretend that everything will be ok. We tried that between WW1 and WW2 and it didn't work out to well. The US is a global trading partner. Could you imagine the effects on the world economy if Iran decided to close the Persian Gulf to tanker shipping? Only the US has the ability to project the power necessary to make sure that everyone plays nicely in the sand-box. We need to be able to do this. We cannot just walk away from Iraq and Afghanistan, we need to finish what we started. It will cost us much more down the road if we walk away. I just don't see the US military being able to take huge cuts without comprimising its ability to protect US interests around the world.

Unfortunately we have been living on borroweed money to long. The politicians promise us that we can have all this cool stuff but we don't have to pay for it in taxes. Bush 43 inherited a budget surplus in 2000. We then had tax cuts and increases in medi-care benefits and global war on terror with the politicians telling us we can have it all. We cannot have it all.

 

[EagleKeeper]

Why? Go to California and buy something. Non-prepared food items are already exempt. So are services. The facilities are already there, and the precidents already exist. The federal government would have very little to do to implement such an exemption, and every single retail software package already has the ability to mark items as tax-exempt.

When something goes national, I have faith in the government to foul it up and also have tweaks put into place for lobbyists.

CA also has an income tax. so they are not as harsh.

 

[CPA]

I am all for a tax on consumption rather than a tax on production. It is illogical to me to tax productivity. You penalize risk, effort and hard work.

 

[CPA]

Dullard has some good points. The black market would be ridiculous...I'd go as far as to say organized crime would become a super power.

What's more likely to happen is a 5% national sales tax will be enacted, three quarters of its revenue being spent on an over-complicated system to administer it followed by the government increasing spending twice as much as the amount of new revenue brought in.

Do states have organized crime problems related to state sales taxes?

 

[fskimospy]

Do states have organized crime problems related to state sales taxes?

It's pretty standard social science. When sales tax rates are relatively low, the cost of compliance is lower than the gain from avoidance. As you increase them, these motivations change. If we're talking about the ~34% sales tax that would be required to replace the income tax (on top of state taxes, so really 40%+), at that point you likely will. At least in terms of creating a black market, and that helps OC.

Great example is cigarettes in NYC.

 

[dullard]

The problem that I have with Medi-care and SS is that they are funded by payroll deductions. I would recomend that we actually remove medi-care and SS from the federal budget and place them on there own. They would need to be funded solely by payroll deductions. That way when there is a surplus the funds cannot be raided. We can then look at medi-care and SS on its own. The problem with cutting medi-care is that fewer and fewer doctors are taking medi-care patients. If you cut to much the doctors will just stop taking new patients.

The issues with military funding are fairly complicated. However as a % of GDP (4.6%) we are not that high. We need to police the world since we are the sole remaining super power. Who else is going to do it? We cannot just stick or heads in the sand and pretend that everything will be ok. We tried that between WW1 and WW2 and it didn't work out to well. The US is a global trading partner. Could you imagine the effects on the world economy if Iran decided to close the Persian Gulf to tanker shipping? Only the US has the ability to project the power necessary to make sure that everyone plays nicely in the sand-box. We need to be able to do this. We cannot just walk away from Iraq and Afghanistan, we need to finish what we started. It will cost us much more down the road if we walk away. I just don't see the US military being able to take huge cuts without comprimising its ability to protect US interests around the world.

Unfortunately we have been living on borroweed money to long. The politicians promise us that we can have all this cool stuff but we don't have to pay for it in taxes. Bush 43 inherited a budget surplus in 2000. We then had tax cuts and increases in medi-care benefits and global war on terror with the politicians telling us we can have it all. We cannot have it all.

SS is essentially its own fund. But, at the moment federal law states that it must spend its surplusses to buy govermental bonds. True, it is a safe investment. But, that investment is paying next to nothing at the moment. I don't know about medicare, what does it do with its surplusses?

Yes, some doctors threaten to drop patients. That can be fixed with a simple law, or just let them drop patients. They will be dropping the hand that feeds them just as a massive quantity of people join medicare. Doctors earning too much money and ordering too many proceedures are the root problem. The only way to fix it is for them to make less. Sad for them, but it must be done.

Why do you think 4.6% isn't high? China is 2%, the United Kingdom is 2.5%, Germany is 1.3%. We are about double as a percent of GDP as what most of the rest of the big countries spend. And at 1/3rd to 1/6th of the entire federal budget (depending on if you count military debt spending), then that is where lots of the fat lies.

 

[bruceb]

National sales tax is fine, if they eliminate local state sales taxes.

 

[spidey07]

National sales tax is fine, if they eliminate local state sales taxes.

Problem with that is the states would have little to no revenue and would lead to federal government having all the money/power. Do not want.

If it's money going to the federal government then only federal taxes should be lowered.

 

[sandorski]

Replacing Income Tax will not happen. Lowering Income Tax is a possibility, eventually. Too many of you are still living in Denial about Taxes. They need to be raised in order to fix your Deficit/Debt problems and continuing the mantra of Less Taxes is Fail. Spending/Service Cuts and Increased Taxes will need to be implemented for at least 5-6 years(ya, pulled from ass, but it will not be overnight by any stretch) before that issue is solved. Short term Pain, for Long term gain, but it will only happen when you're willing to finally get to it.

 

[drebo]

Replacing Income Tax will not happen. Lowering Income Tax is a possibility, eventually. Too many of you are still living in Denial about Taxes. They need to be raised in order to fix your Deficit/Debt problems and continuing the mantra of Less Taxes is Fail. Spending/Service Cuts and Increased Taxes will need to be implemented for at least 5-6 years(ya, pulled from ass, but it will not be overnight by any stretch) before that issue is solved. Short term Pain, for Long term gain, but it will only happen when you're willing to finally get to it.

Like has been said a hundred times before: I have no problem with temporarily increased taxes for the sole purpose of paying down the debt. However, the government needs to prove to me that it is fiscally responsible enough to initiate such a plan before I can, in good conscience, agree to pay higher taxes.

The government has, as yet, not proven that it can live within its means. Thus, there is no guarantee that higher taxes will make that any less of a reality.

 

[sandorski]

Like has been said a hundred times before: I have no problem with temporarily increased taxes for the sole purpose of paying down the debt. However, the government needs to prove to me that it is fiscally responsible enough to initiate such a plan before I can, in good conscience, agree to pay higher taxes.

The government has, as yet, not proven that it can live within its means. Thus, there is no guarantee that higher taxes will make that any less of a reality.

That's the problem, you have just put it into a Catch 22. Sorry, you'll need to just accept Higher Taxes without the Proof. First you need to Elect Politicians who openly Campaign on a workable solution and not some "Tax Cuts" policy doomed to fail.

So far the closest to that solution are the Democrats, unfortunately they're too diverse/independent and buckle under Political pressure too easily to see any such plan through.

 

[CPA]

It's pretty standard social science. When sales tax rates are relatively low, the cost of compliance is lower than the gain from avoidance. As you increase them, these motivations change. If we're talking about the ~34% sales tax that would be required to replace the income tax (on top of state taxes, so really 40%+), at that point you likely will. At least in terms of creating a black market, and that helps OC.

Great example is cigarettes in NYC.

34%? How about 23%. With state taxes you are talking about 30-31%.

 

[drebo]

That's the problem, you have just put it into a Catch 22. Sorry, you'll need to just accept Higher Taxes without the Proof. First you need to Elect Politicians who openly Campaign on a workable solution and not some "Tax Cuts" policy doomed to fail.

So far the closest to that solution are the Democrats, unfortunately they're too diverse/independent and buckle under Political pressure too easily to see any such plan through.

A huge step will be the government actually talking about revising the social welfare programs. Right now, they refuse to even discuss them. I understand that they are not discretionary spending items, but they can still be modified.

It is clear that the priority of our government is not the wellbeing of us citizens, but rather its own wellbeing. Were the opposite true, we would have much more transparency and a budget much closer to being balanced. If we can start to see inklings toward this type of government, it might be the proof some need that the government will finally start to make much needed changes to spending.

As we see every two years, campaign promises mean nothing. The government needs to act to demonstrate a good faith effort to address these problems. Until they do that, they will never have the popular support needed to increase taxes to levels that will aid us against our deficit problems.

 

[dullard]

34%? How about 23%. With state taxes you are talking about 30-31%.

Care to dispute the math that I posted above (33.7% without any non-taxed items or help for the poor) or the link that eskimospy posted (34%)? Then do you care to dispute the likely effects of politicians giving breaks to special interests all of which must then raise the rate further?

The 23% number that is floated around assumes the federal government slashes spending by far more than it ever has and likely ever will.

 

[halik]

Replacing Income Tax will not happen. Lowering Income Tax is a possibility, eventually. Too many of you are still living in Denial about Taxes. They need to be raised in order to fix your Deficit/Debt problems and continuing the mantra of Less Taxes is Fail. Spending/Service Cuts and Increased Taxes will need to be implemented for at least 5-6 years(ya, pulled from ass, but it will not be overnight by any stretch) before that issue is solved. Short term Pain, for Long term gain, but it will only happen when you're willing to finally get to it.

Dude what's with the random caps? Cruise control for cool broken?

 

[fskimospy]

34%? How about 23%. With state taxes you are talking about 30-31%.

http://www.factcheck.org/taxes/unspinning_the_fairtax.html

Nope, 34%. As I linked before, fairtax proponents use a novel (read: bullshit) way of counting income taxes that hides how much the tax actually is. Basically, they look at the math backwards. To paraphrase the example used in the link, their argument is that if something costs $100, $77 will be the price, and $23 of that is tax. They call that a 23% tax rate. Under the way we actually do sales taxes in the US, $23 in tax on a $77 item is actually an ~30% tax rate.

Then it comes down to reality, which is that their 23% (actually 30%) figure assumes ZERO tax evasion, and it taxes everything, even things we don't tax today like rent payments. When President Bush's own tax advisors looked at it (and that's an awfully sympathetic team, don't you think?), they came up with a 34% rate. Other estimates are higher. THEN you add state sales taxes on top, and we're easily talking 40%+.

 

[sandorski]

Dude what's with the random caps? Cruise control for cool broken?

Not broken, just On.

 

[piasabird]

If you buy gasoline, Liquer/beer, or cigarettes or maybe even use a phone you are paying a federal tax.

 

[piasabird]

In the real world the state, the county and the municipality can also add taxes onto any federal tax. Look at your GAS tax. Federal tax is only 18% a gallon. Cant wait for a 47% tax on a new car???

 

[dullard]

Federal tax is only 18% a gallon.

Probably a typo on your part. But I'll fix it. Federal tax is 18.4 cents per gallon, not 18 percent per gallon.

Average gas price now without federal tax: $2.796/gallon
Average gas price now after federal tax: $2.98/gallon.

The the current percentage is 0.184/2.796 = 6.58%. But that percentage changes daily since isn't really a percentage that is being charged.

 

[Darwin333]

I would support implementing a sales tax on non-essential goods providing the income tax were abolished. I much rather have a consumption tax than an income tax. I would also support some credit system that the taxes would only start past a certain amount of money that someone spent per year. Food, clothing, medicine, shelter, etc would be exempt from the tax. no VAT either, just simple retail.

The % of tax must be low as well, no more than 5-10%.

That wouldn't even cover the interest on the debt and .mil spending alone on the low end.

 

[Anarchist420]

What they ought to do is reinstate the Articles of Confederation. Contrary to pop belief, that'd work fine. No more FDRs/Obamas trying to trick people into firing the first shot.