Switching to Flat Sales Tax

[gumOnShoe]

I may be incorrect, but one of the reasons I'm opposed to getting rid of the income tax and then adding a 25% sales tax to everything is because I feel like we are loosing out on money already made.

Money that has already been made and taxed 1/3 then gets taxed an extra 25%, pretty much negating all of your savings. Sure you get more money in the long run, but I feel a switch like that would only hurt our economy by grabbing even more of our savings away from us.

If you made 1000 dollars in the month preceding a change like this. You'd get about $666.67 of it in your pay check. Then if tax code changes take out an additional 167.67 in sales tax away from your amount to purchase goods. So now, you have 500 dollars left. Then add in your counties 5-8 percent sales tax. It only gets worse.

Switching the tax code means you only have half the money you originally made to spend on goods. Does this suck or is it just me?

How long would it take to make that money back? More importantly, what would the initial shock to our economy cause?

[Drakim]

At 3/11/08 10:17 AM, gumOnShoe wrote: I may be incorrect, but one of the reasons I'm opposed to getting rid of the income tax and then adding a 25% sales tax to everything is because I feel like we are loosing out on money already made.

Money that has already been made and taxed 1/3 then gets taxed an extra 25%, pretty much negating all of your savings. Sure you get more money in the long run, but I feel a switch like that would only hurt our economy by grabbing even more of our savings away from us.

If you made 1000 dollars in the month preceding a change like this. You'd get about $666.67 of it in your pay check. Then if tax code changes take out an additional 167.67 in sales tax away from your amount to purchase goods. So now, you have 500 dollars left. Then add in your counties 5-8 percent sales tax. It only gets worse.

Switching the tax code means you only have half the money you originally made to spend on goods. Does this suck or is it just me?

How long would it take to make that money back? More importantly, what would the initial shock to our economy cause?

Maybe you could have a tax free month predating the switching month to compensate?

Although, it would suck if somebody has saved one million dollars, and paid tax for every time they earned some for that sum, only to be forced to pay tax again when the sales tax goes into effect.

[JackPhantasm]

Are they really going to fucking do that.

Say goodbye to the poor...

[gumOnShoe]

At 3/11/08 10:22 AM, JackPhantasm wrote: Are they really going to fucking do that.

Say goodbye to the poor...

I've heard talk of it recently, more from republican candidates, though I don't know what McCain's stance is on the subject. I should probably look it up as it would be a deciding factor. Its an issue being discussed, though it isn't a bill, so I'm raising it here.

Maybe if the government credited you so much allowance on savings before you had to pay the new tax it would be cool, but I really don't like the idea of taxing savings extra when our economy is already shaky.

[ThePretenders]

It doesn't sound like a good idea to me. The proposed tax reform will shift the tax burden from the rich to the poor, since poor people spend a higher percentage of their income on necessities and therefore will benefit the least. A more modest proposal would be to cut taxes for the poor and introducing tax bands for goods progressively increasing by a bit, depending on the value of the good.

[Elfer]

Bad assumptions you've made:

- People spend 100% of their income on goods (i.e. nobody saves money or pays rent)
- All goods are equally taxed, including food, books, and clothing (this is lies)

[gumOnShoe]

At 3/11/08 01:08 PM, Elfer wrote: Bad assumptions you've made:

- People spend 100% of their income on goods (i.e. nobody saves money or pays rent)
- All goods are equally taxed, including food, books, and clothing (this is lies)

I'm sorry, could you elaborate? I know all of the money doesn't go to buying goods, but a significant portion does. Gas, Food, Clothing, etc. The basic neccesities of getting around from day to day, neglecting power, water, and heat, are all goods. And I did say people save money, and thats where the problem comes in. That money is worth less than it should be after the tax code is switched. All of those savings, if spent on goods is worth less!

A flat sales tax of 25% on everything is what I'm talking about. I'm not assuming everything as that is the proposition I'm talking about, which I read about somewhere (not sure where in the multitude of political articles I've read in the past 2 months).

Please elaborate as to where I messed up.

[MobilnaReakcija]

Huckabee wanted to get rid of income tax and impose a 25% sales tax. I say: Fuck you asswipe! Good thing he was knocked out of the race...he had some radical ideas that even extreme right wing people were nervous about.

[FUNKbrs]

A flat tax isn't a bad idea, it's just never going to happen and is the last bastion of a failing party.

YES. I WENT THERE.

The truth is that there are these really rich people. They're called Acountants, or sometimes Tax Attourneys if they're REALLY rich. Basically, it's in their best interest to keep tax laws WAY complicated, to create a separation between laymen and tax law so regular people will have to hire a specialist just to not go to jail.

YES. THIS IS A FORM OF SLAVERY. IT'S NOT MY FAULT. I'M ONLY EXPLAINING IT.

Anyways, these are the kinds of people who have a pervasive grip on campaign finance, because, well, THEY'RE FILTHY FUCKING RICH FROM SAVING CORPORATIONS BILLIONS ON TAXES EACH YEAR.

Therefore, as long as there's money to be made in keeping the tax code complex so regular people can't run businesses without paying exorbitant fees to accountants and tax professionals, lobbyists will have plenty of cash to maintain the status quo regardless of justice. If the Reps are pulling out of this scheme, it means that money has ALREADY been pulled out from under them, and they have little chance in the upcoming elections.

BTW, a flat tax can still be partially graduated to compensate for the poor, like our current bracket system is, so don't even bring that stupid shit up. Also, a flat sales tax is OBVIOUSLY retarded; it should be a flat INCOME tax. Sales tax should be and IS reserved for states and local municipalities.

[Al6200]

At 3/11/08 10:22 AM, JackPhantasm wrote: Are they really going to fucking do that.

Say goodbye to the poor...

Poor people would get a rebate check.

It's identical in every way to the income tax except that it's flat, and charges people based on their purchases. So why not just have a flat income tax. Harder to cheat, easier to enforce.

[kidray76]

At 3/11/08 04:01 PM, Al6200 wrote:

At 3/11/08 10:22 AM, JackPhantasm wrote:

It's identical in every way to the income tax except that it's flat, and charges people based on their purchases. So why not just have a flat income tax. Harder to cheat, easier to enforce.

Valid point, just forgot one thing. Now, you've given even more incentive for people to find other ways to get something cheaper. So crime rate will go up definetly just because tempting for employees to take something, and then sell it to someone at a cheaper rate.

[Al6200]

At 3/11/08 04:08 PM, kidray76 wrote:

Valid point, just forgot one thing. Now, you've given even more incentive for people to find other ways to get something cheaper. So crime rate will go up definetly just because tempting for employees to take something, and then sell it to someone at a cheaper rate.

Yeah, I honestly don't understand any benefit of the sales tax over the income tax. Supposedly, the sales tax is fairer, since income can be distorted and cheated by the very wealthy, but I'd imagine too that the very wealthy can find a way of cheating the sales tax too (think subtle bartering).

The flat income tax is definitely the way to go in my mind, with a cap that protects the lowest-income individuals (i.e., lower than $20,000).

[reviewer-general]

At 3/11/08 10:17 AM, gumOnShoe wrote: I may be incorrect, but one of the reasons I'm opposed to getting rid of the income tax and then adding a 25% sales tax to everything is because I feel like we are loosing out on money already made.

Money that has already been made and taxed 1/3 then gets taxed an extra 25%...

But, wait. Didn't you just say, Getting RID OFF the income taz and THEN adding a 25% sales tax..."?

Meaning there WOULDN'T be about 1/3 gone + another 25% on everything you buy. There would just be the 25% on everything you buy...

;

[reviewer-general]

At 3/11/08 04:55 PM, reviewer-general wrote: But, wait. Didn't you just say, Getting RID OFF the income taz and THEN adding a 25% sales tax..."?

* But, wait. Didn't you just say, "Getting RID OF the income tax and THEN adding a 25% sales tax..."?

OUCHY. TYPOS ARE TEH BAD THINGS.

;

[MobilnaReakcija]

At 3/11/08 04:57 PM, reviewer-general wrote:

At 3/11/08 04:55 PM, reviewer-general wrote: But, wait. Didn't you just say, Getting RID OFF the income taz and THEN adding a 25% sales tax..."?

* But, wait. Didn't you just say, "Getting RID OF the income tax and THEN adding a 25% sales tax..."?

OUCHY. TYPOS ARE TEH BAD THINGS.

;

Easy...

[gumOnShoe]

At 3/11/08 04:55 PM, reviewer-general wrote: But, wait. Didn't you just say, Getting RID OFF the income taz and THEN adding a 25% sales tax..."?

Meaning there WOULDN'T be about 1/3 gone + another 25% on everything you buy. There would just be the 25% on everything you buy...

No, the money you have already earned before the switch. The money you have in your savings account at this very moment has already been taxed for the income tax. That money you already have will be taxed twice. The money that you earn after the switch only gets taxed at the time you spend it, which is the 25%, on the federal level anyway.

[reviewer-general]

At 3/11/08 06:13 PM, gumOnShoe wrote:

No, the money you have already earned before the switch.

Oooooh, I'm sorry!

I hadn't fully comprehended what you meant.

Carry on. :)

;

[Elfer]

At 3/11/08 01:24 PM, gumOnShoe wrote: A flat sales tax of 25% on everything is what I'm talking about. I'm not assuming everything as that is the proposition I'm talking about, which I read about somewhere (not sure where in the multitude of political articles I've read in the past 2 months).

Please elaborate as to where I messed up.

You messed up in not providing a link explicitly stating the plan. I seriously doubt that they were suggesting sales tax on things like produce.

[SmilezRoyale]

A flat tax isn't a tax on trade, it's LITERALLY where everyone pays equal percentages in taxes. [usually low percentages]

You are thinking of the fairtax, which is proposed by paleoconservatives like Ron paul, where the income tax is removed and replaced with a 20% tax on whatever a person buys.

My major qualm with the fair tax is that it doesn't take bartering into consideration.

[gumOnShoe]

Yeah, when I originally made this I didn't have all the facts but was operating off of newsclips and articles that didn't talk about the whole picture. The fair tax is what I originally heard about, and usually it has rebates for under the poverty line.

I'm still not excited, as they are rebates, and you still don't necessarily have the money you need when you need it.

Additionally, your saved money is still worth less as I pointed out, so I wasn't all wrong. Checking your facts is a good thing. :/

[Elfer]

At 3/11/08 09:44 PM, SmilezRoyale wrote: My major qualm with the fair tax is that it doesn't take bartering into consideration.

It doesn't take any form of non-commercial sale into consideration. The government doesn't have the resources to track whether or not you paid your twelve dollars of tax on that vintage Regis Philbin advertising cutout that you bought on eBay.

[MortifiedPenguins]

At 3/11/08 09:44 PM, SmilezRoyale wrote:

My major qualm with the fair tax is that it doesn't take bartering into consideration.

Most economies can't take bartering into account due to it's nature.

But thankfully, the fair tax plan only takes it's creatoin and initial purchase taxation into account.

[Al6200]

At 3/11/08 09:44 PM, SmilezRoyale wrote: A flat tax isn't a tax on trade, it's LITERALLY where everyone pays equal percentages in taxes. [usually low percentages]

He said "Flat Sales Tax", which is the same as the fairtax.

You are thinking of the fairtax, which is proposed by paleoconservatives like Ron paul, where the income tax is removed and replaced with a 20% tax on whatever a person buys.

Ron Paul doesn't support the fairtax, Mike Huckabee does. And a lot of Republicans are for it.

[SmilezRoyale]

At 3/12/08 03:22 PM, Al6200 wrote:

Ron Paul doesn't support the fairtax, Mike Huckabee does. And a lot of Republicans are for it.

Oh snap... i made that mistake again.

[JayBirdSlim]

Ok... here's my two cents on a flat tax and a flat sales tax

A flat tax, based on what I know and anyone feel free to correct me if I'm wrong, is that it levies a single rate against everyone no matter what their income with the thinking that everyone pays an equal share compared to their income. Which on one hand is a really good thing if you make a ton of money 25% sent to the government is relatively larger than someone who mkaes little money. So, in essence the government gets more money from people who have more. Here's what I see as a problem with it.. let me set up some fictitious $$ amounts to play with.

Let's say a poor person makes $120 a year and has rent and bills of $10 a month and an average rich person makes $10,000 a year and pays $500 a month in bills. ( my thinking there is the less money you make the more goes towards necessities ) so if we take 25% of the those the poor person is then left with $90 that year leaving them 3 months short for a full year of living and the rich person is left with $7500 dollars which covers them for the year and leaves money left over for savings and increasing wealth.
( that is how it works right? )

So essentially the divide between the two most distnce classes gets bigger.

As for a Flat Sales tax, again, based on what I know, that is just a bunch of crazy talk. Simply because all that would do is make the gap get wider even quicker. (if there's no income tax) If you think about it with the above numbers who is impacted greater by that kind of system? The guy making $120 of course...

no?

[Elfer]

At 3/12/08 05:21 PM, JayBirdSlim wrote: If you think about it with the above numbers who is impacted greater by that kind of system? The guy making $120 of course...

no?

No. Sales tax is not applied to necessities like food or rent. In this system, there is less tax for people who spend less on luxury goods and leisure.

[gumOnShoe]

At 3/12/08 07:58 PM, Elfer wrote: No. Sales tax is not applied to necessities like food or rent. In this system, there is less tax for people who spend less on luxury goods and leisure.

It depends on the state and the tax. Who knows what it would actually be until it is proposed in the form of a bill. For instance, the state of pennsylvania doesn't have tax on clothing or unprepared food. Prepared food (even food from the grocery store that has been "fiddled" with) is taxable. On top of that, there are some states that do tax clothing.

So, it is possible such a tax might be on necessities. And there are some necessities that the tax will be on.

[Elfer]

At 3/12/08 08:07 PM, gumOnShoe wrote: It depends on the state and the tax. Who knows what it would actually be until it is proposed in the form of a bill. For instance, the state of pennsylvania doesn't have tax on clothing or unprepared food. Prepared food (even food from the grocery store that has been "fiddled" with) is taxable. On top of that, there are some states that do tax clothing.

So, it is possible such a tax might be on necessities. And there are some necessities that the tax will be on.

The solution is to not vote for people who will vote for a stupid, unfair bill that taxes necessities.

A federal sales tax has worked out pretty well here in Canada.

[JayBirdSlim]

At 3/12/08 08:11 PM, Elfer wrote:

A federal sales tax has worked out pretty well here in Canada.

cool....explain it to me (I've never fully understood why people are so in love with a flat tax or a flat sales tax and always figured I was missing some key info that turns the light on type of thing)

So I'm interested.

[gumOnShoe]

At 3/12/08 11:50 PM, JayBirdSlim wrote: So I'm interested.

I think the allure is that its really simple to understand and there isn't a lot of paper work required to get anything done, but I'm not sure.