ALL THIS "TAX" STUFF GOT ME THINKING

[GALAZIO]

WHAT IF...

There was NO income Tax? Zero, Nada... Federal, State & Local???

Would the country survive?

I say YES... What if we had a flat SALES TAX on goods and services? As a Business, your taxes would come from your purchases of goods & services from other businesses, not from Revenues of Sales. As a Consumer, your taxes are in direct relation to your SPENDING...not your EARNINGS.

Now I didn't spend too much time on this, but for example, lets say the number was 20% SALES TAX. As a country, we had approximately 4.5 trillion in retail sales last year. This equates to $900 Billion in Tax Revenue.

I don't know what the number is currently from Income Tax so that number is fluid, but it would be FAIR to all... It would get rid of "questionable" deductions and it would make the free trade market become competitive and in my opinion, be as streamline and fair as it can get. If I want a 50 footer and a new ferrari to drive to the marina... I am paying taxes that those whom choose not to make these expenditures or can't make these expenditures won't. If I choose to miser all my money into the market, great... when I decide to SPEND it, I'm getting taxed. It would drive our markets, in return create jobs which puts money in the pockets for those to spend...and the feds, state & locals would get their piece of the pie based on how that pie is sliced.

Take the Gulf region (ie: New Orleans)... after Katrina, the feds could say, all or a portion of dollars collected are to be re-distributed to the State & local markets. It would help an area immediately without the bickering of where the money is going to come from. It would be up to the state and Locals to do something to bring people to the area to stimulate spending and the collection of dollars. Sure, they might have to get more aggressive on their pricing to bring people in, but isn't that part of business today when they have "clearance sales"?

Think about it... and what do you think, would it work?

OH...and before the Moonbats say something like "Well, a family making $30,000 a year that spends $28,000 would be taxed $5,600 which is MORE %-wise than a guy making $1,000,000 spending $200,000 (which would be $40,000)... The lower income people would be taxed 17% +/- of their Income while the rich guy is only taxed 4%..." I say TOO BAD... Fair is fair...make more, spend less. This is based off of SPENDING, not MAKING. What say you?

[shoefish]

They say that it is "regressive" because of your last point of the poor being overburdened (percentage wise), but I like the idea. Also, it will help with all of the illegals that are in the country not paying income taxes- you buy something, you pay taxes. Simple. I would think that it would really streamline the IRS too, and probably cut down on overhead to run that department. I wonder if it has ever been done?

[Glenn W]

I don't know if it would be a good or bad metric. However, I am confident of one thing--- Polititians would soon screw it up and make it very complicated.
What would be exempt from sales tax?--- health care products?--- services?-(tax on goods only?), what about resale-- would they pay sales tax on items they resale?--- what about the poor--- would they pay the same rate.
Sales tax on food?---- what about food stamps?. What about international sales--- how do we tax this?. What about goods and services purchased from the government, such a college tuition?-- would that be tax exempt? What about products used in the manufacure of goods, how would we tax this? How would we tax exports? Would local and state governments be exempt from federal sales tax--- what about churcxhes and charities?

Oh, it would soon be more screwed up than what we have now. Plus, think of all the bean counters you'd put out of work.

[shoefish]

Oh, it would soon be more screwed up than what we have now. Plus, think of all the bean conters you'd put out of work.

I was hoping you'd chime in on this one- I needed the Glenn W point of view

You would think that a multi-volume tax code would no longer be needed for a flat sales tax, but I guess that when you think about it a little deeper, you could see how it would get out of hand. Still, it seems like it has some merit.

[flatbottom]

interesting #'s anything would help the current situation

[gottaflylee]

I'm looking forward to the day...There are some good books out on this...

[BigSteads]

I cannot see taxing labor, or services. If that were the case I would have charged a split hair under 7 digits worth of tax last year alone. The nation couldnt handle that right now. In a couple years, I could see maybe considering it, but not right now. I don't even think our own Government could afford to pay tax on sub-contractor services lol.

[Beatsworkin']

A "BLACK MARKET" for Tax free items would take over the economy.

[Gringo]

France has a system similar to that, and it works just fine. But I have even more experience with the system here in the Turks and Caicos Islands. There is no income tax of any kind. There is no property tax. There is no school tax, no vehicle excise tax. No inheritance tax.

There are essentially two taxes here, a sliding-scale tax on goods sold, and a one-time point-of-purchase real estate transfer tax. If I buy something that was imported, such as a recent purchase for some parts for the Land Rover, I pay 30% of the value of the imported parts as a customs duty. If I buy a tablesaw in the local Do-It Center, the price reflects the additional 30%. It's not a fixed tax. Boats, for example, only have an import duty of 11%. The country needs boats, and therefore makes it easier to import them. Automobiles have an import duty based upon the engine displacement. Want to import a big-ass Expedition with a Triton V-8? Sure. 40% duty. Wanna bring in a little suzuki? Much less tax.

The real estate stamp tax is a one-time 10% tax when the title changes hands. But after you pay that one time tax, there is not another tax on that property ever. Unless you sell it. Then the new owner pays his one-time 10% tax. If you pass that property to your heirs, they pay NO tax on it.

There are some meal and hotel taxes levied on the tourism industry. And that's about it.

Food is not taxed.

So, what does this do? Well, it gives you control of your own money. Don't like paying taxes? Don't buy a bunch of stuff you can probably do without. Lets say two guys, one a US resident, and one a TCI resident, each earn $100,000.
The US resident pays, what, 28% up front Federal, another 5% State, plus misc other little taxes when he earns the money. 35%, conservatively, across the board whether he spends that money or not, right? So, lets say he spends half of it to live. So he has paid $ 35,000 in taxes, plus an average of another say, 10% on the 50K he spends to live in sales, auto, property,school, other little taxes. So another 5K. So, after a year, what has he got left? 100K, minus 35K taxes up front, minus 50K spent to live, minus another 5K tax on the 50K, ....or basically, he ends up with $ 10,000 out of that 100K he earned, having spent 50K on himself. ( no major purchases that year)

Here, you start with 100K, pay no taxes up front. You spend 50K on consumer goods, during the year, and lets say the average duty on that ( 30% max, 0% minimum) comes out to around 20%. So at the end of the year, you have 100K, - 50K spent, - 10K taxes ( 20% of the 50K), or basically, you are left with $ 40,000. out of your 100K earned.

Government needs more money to fund something? Add 1% customs duty to something somewhere. It doesnt require reams of lawyers, economists, tax collectors, bean counters. Need to finance a war? Well, that gets expensive, doesnt it. These numbers are pretty simple, and I am sure I am wrong a percent here or there, but the system here does NOT require an H&R Block to figure it out for you every year. Neither does France's system, of a VAT ( Value Added Tax). You see it when you pay it, IF you decided to pay it. You don't have to.

The system works, it's simple, and most important to us, it gives you control over your taxes. You can decide whether you want to buy the new big-screen TV and pay the 30% this year, or not. In the US system, you are already taxed as though you bought the big screen up front, whether you do or not. Then you get taxed again when you actually buy it.

And what are you getting for those taxes? Ever look at the Federal Payroll? Do some Google searching. Look up Law Enforcement agencies in the US....you will be astounded how many people are hired to make you obey the law. And they gotta have guns, cars, trucks, training, uniforms, And of course, there is military spending....someone has to pay for the US to be the world 's unpaid police force...

Think about it.

[Green Machine]

I agree that it absolutely would work... and it would be better for everyone. Unfortunately I can't see it ever happening.