Read this real good. It would put an end to the irs for one thing. The ideas are real good in that no one escapes the tax even the illegal's aliens. It would remove the in bedded tax from manufacturing and would and should reduce the price of goods. I for one think it's a good idea. We really need a tax reform.
Yes, this is a very good idea. It has been out there for awhile now. Huckabee is a supporter of this. So is Neal Boortz. Mr Boortz and I agree more often than I agree with any other talking head. I can assure you that Most of government and the H&R Blocks etc. do NOT support this. Government - because it reduces the power of government. IRS and H&R Block etc - because of substantial reductions in the employee base of these. This is often misrepresented by it's opponents. "Oh My God, You don't really want a 25-30% sales tax?!?!?!?" Actually, yes we do. It sounds bad on the surface, but it isn't.
I will happily pay a 30 or even 35% user tax if all the other crap goes away!
Considering that the government is aware of the very large underground cash economy you'd almost think they'd be looking for a point of sale tax.
Suppose "Joe" works on "Bill's" car and Bill pays him $1000.00 cash. Joe sticks it in his pocket and doesn't declare it. He beats the big income tax bill. The Joe goes to the store and buys $1000.00 worth of goods. He pays 4, 5, 6, 7 (whatever) % sales tax. So he pays 50 or so bucks in taxes.
If there were no income tax Joe wouldn't have to "cheat". But if there were a big sales tax, 30/35% he would pay 350 bucks in taxes at the point of sale.
Now if you were the gubmet wouldn't you rather have 350 bucks instead of only 50???
I know this is an oversimplification and maybe I'm just simpleminded but it seems to make sense to me.
What's not to love about our current tax system? For example, this poor woman would have pay taxes on her purchase rather than deducting it. You guys are heartless! Notice, that she is from Chuck's part of the country.
"Just because a deduction is outrageous doesn't mean it's automatically disallowed.
In 1988, Cynthia Hess, a Green Bay, Wis., stripper known as "Chesty Love," claimed a $2,088 deduction for implants that enlarged her bust size. The IRS turned down her claim.
In 1994, however, Special Trial Judge Joan Seitz Pate ruled that the result of the implants increased Hess' income and allowed the deduction." (From an MSN article on outrageous tax deductions)
Seriously, my worry with this plan is that we would end up with both a 35% sales tax and an income tax.
Not. I'll pay 4725 in Federal Sales Tax plus 2187.50 (6.25%) Texas motor vehicle tax on a $35,000 truck? No. We're already at 10 months supply on housing, you gonna pay $20,000 tax on that $150K house? How much more of a wet blanket is that going to throw over the market. Does this mean my electic and gas rates go up by 13.5% too? A consumption tax is just that - on consumption. And just how do they plan to "police" this underground economy (that would grow like gang busters) when the gov't can't do it now? You already sell that 25,000 Mach One to the rich guy and when the title paperwork ends up at the county clerk it sold for $1250 - people ain't stupid. Anything before 1983 in Texas is off the Assigned Value radar, so there's a big hole already. Think people won't buy a 42" LCD TV for $700 out of the back of a truck if they can get out of paying 94.50 sales tax? Damn straight.
Is the system screwed up? You betcha. But a consumption tax is not the fix. First it's "the poor", then maybe housing needs some help, next is small business startups want to defer tax on assets so they can maybe start making money first, then remember that someone with $500K a year income is going to spend a lot less of that on stuff than someone making $50K, so maybe it sould have some progression in the tax and....you are right back where you started.
If this was implemented, there would have to be provisions to prevent the government from implementing both together. It would work and it would be a whole lot more transparency and accountability.
My $699 TV would cost $851.03 - %13.5 FCT + %8.25 local sales tax. I might can handle the $57 local tax, but the $94 is likely to keep that TV on the shelf.
You are missing the point. Currently there is 20 - 30% taxes embedded in everything you buy. In other words all the taxes along the way are passed to you. Competitive pressure will bring down the price of that TV if those embedded taxes are removed. That $699,00 tv would sell for $525 (approximate) Then if you added an 20 - 30% sales tax back to it, It would cost about what it does now. In other words - end users (individual and corporate) pay taxes on finished products and not on raw/semi raw materials.
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