Having a flat sales tax on all consumption with no income tax is a
bad idea . The proposal coming out included a 29-cent flat sales tax
rate on *everything(?)*.....
But the folks who have this idea certainly won't be picking up any
economic awards anytime soon, for it would cause a significant
decline in purchases of discretionary consumer goods and start to
shrink the GDP....this is something we definitely do not need. Sure,
it would encourage more people to save money and lead frugal
lifestyles (no pun intended, Jean Scott)....but it would send our
economy into the crapper since the corporations that produce
discretionary goods would experience a marked decline in
sales/revenues/earnings.....which would be bad for the stock
market...which further slows the US's economic engine...and so forth..
Mark my words, the flat sales tax idea will die in the House once the
more widely-respected economists in the country reviews the proposal
(if it even makes it THAT far!).
A Flat Sales Tax With No Income Tax.....Bad Idea!
I do agree that it has almost ZERO chance of becoming a reality. The
current tax code has way too may "pet deductions" protected by special
interests. While Bush has the balls (or more presisely doesn't have
further political ambitions to protect) to push the idea, Congress
does not. The idea will die as special interests pound Congress.
But I disagree about your conclusions. As I said in separate post a
few minutes ago, the proposal I saw would replace both personal income
tax and corporate tax. The latter would significanly reduce costs to
prduce goods, thus reduce prices (pre-tax). Yes, after tax goods
would cost more, but since people have way more money in the pockets
(due to no income tax), they can afford it. It would still collect
the same amount of overall tax revenue, just shifted from income to
consumption.
It would create a totally different paradigm. The biggest losers
would be current benefactors of tax breaks/deductions. But that's a
good thing. There are WAY too many of those now. It would force us
to start from scratch and decide on the (hopefully small) number of
things that would be tax free or tax rebatable (groceries, charitable
constributions, etc.). A vast majority of the current tax deductions
are unworthy and simply raise the overall rates on everything else to
make up for them.
···
--- In FREEvpFREE@yahoogroups.com, "Psychophysical" <jimb777@w...> wrote:
Having a flat sales tax on all consumption with no income tax is a
bad idea . The proposal coming out included a 29-cent flat sales tax
rate on *everything(?)*.....
But the folks who have this idea certainly won't be picking up any
economic awards anytime soon, for it would cause a significant
decline in purchases of discretionary consumer goods and start to
shrink the GDP....this is something we definitely do not need. Sure,
it would encourage more people to save money and lead frugal
lifestyles (no pun intended, Jean Scott)....but it would send our
economy into the crapper since the corporations that produce
discretionary goods would experience a marked decline in
sales/revenues/earnings.....which would be bad for the stock
market...which further slows the US's economic engine...and so forth..
Mark my words, the flat sales tax idea will die in the House once the
more widely-respected economists in the country reviews the proposal
(if it even makes it THAT far!).
While I'm sure there are greatly differing projections of what the
rate would need to be for a National Sales Tax, all the ones I've seen
say a total of about 23%. And that INCLUDES the replacement of Social
Security and Medicare taxes (both the employee AND employer
contributions which total 15.3%). Many people mistakenly think it
would only replace the FEDERAL TAX line on their paychecks. 23% would
seem high if it only replced that. But the SS and MEDICARE taxes
would also be eliminated with this change.
It also replaces all corporate taxes. So with businesses not having
to pay corporate tax or the employee SS/Medicare contribution, their
costs go down significantly. That means consumer product prices would
go down. It also prices US-made products much more competitively for
exporting, allowing us to compete better overseas (which is hard to do
now because of high US labor costs).
Here are a few websites with more info if anyone wants to learn more.
The top one shows a good quick synopsis:
http://www.fairtaxvolunteer.org/smart/sketch.html
http://www.fairtax.org/
http://www.cato.org/pubs/pas/pa-272es.html
···
--- In FREEvpFREE@yahoogroups.com, "Psychophysical" <jimb777@w...> wrote:
Having a flat sales tax on all consumption with no income tax is a
bad idea . The proposal coming out included a 29-cent flat sales tax
rate on *everything(?)*.....
--- In FREEvpFREE@yahoogroups.com, "Psychophysical" <jimb777@w...>
Iwrote:
Having a flat sales tax on all consumption with no income tax is a
bad idea . The proposal coming out included a 29-cent flat sales
tax
rate on *everything(?)*.....
But the folks who have this idea certainly won't be picking up any
economic awards anytime soon, for it would cause a significant
decline in purchases of discretionary consumer goods and start to
shrink the GDP....this is something we definitely do not need.
Sure,
it would encourage more people to save money and lead frugal
lifestyles (no pun intended, Jean Scott)....but it would send our
economy into the crapper since the corporations that produce
discretionary goods would experience a marked decline in
sales/revenues/earnings.....which would be bad for the stock
market...which further slows the US's economic engine...and so
forth..
Mark my words, the flat sales tax idea will die in the House once
the
more widely-respected economists in the country reviews the
proposal
(if it even makes it THAT far!).
I totally agree. First of all this is totally unfair. The poorest
would have the greatest tax burden. They would pay a higher
percentage of their income than anyone else. The fairest way would
be to give evryone the basic necessities of life by not taxing any
income until you are at the minimum level above poverty, after
allowing for how many you have to support. This might be at about
$30K for 1, $35K for 2 (and this would apply whether you are
officially "married", civil union, or domestic partnership). and
then taxing at a rate to cover the countries expenses, with some
progression so that all those above the minimum would end up paying
an equal share of their income to taxes, once the allowance for
basic existence is taken care of.