If you were president of your country...

[niky]

I love the idea of a single sales tax. Food expensive? There are ways around it... design the sales tax around the cost to feed one person for one year versus minimum wage (whether mandated or market-standard). That's it. Everything else is flat tax. With the savings from not having income tax, real estate tax or whatever, I don't think it'll push things into the negative.

What's wrong again with not taxing anything? Governments can set usage fees for the things they own (ie, infrastructure), and that should cover things.

We could do the One Tax, which is supposed to be a 1% or .1% VAT on everything.

The problem with infrastructure taxing is that, to be fair, you actually need to track usage.

Short of having toll-gates on every single sidewalk and roadway, the only way you can track usage of government roads, bridges and assorted highway infrastructure is via GPS tracking.

There's actually someone who suggested this. Problem is, people are too concerned about security rights to allow this to happen. Which is a shame... as it's the fairest way of assessing road use.

And we still haven't gotten to the part of fire, police and emergency services. There may be privately-run solutions for that, but you'll still need some amount of regulation to ensure that standards are met.

 

[wfooshee]

Anybody that thinks that food isn't taxed doesn't know how excise taxes work.

 

[Omnis]

The problem with infrastructure taxing is that, to be fair, you actually need to track usage.

Short of having toll-gates on every single sidewalk and roadway, the only way you can track usage of government roads, bridges and assorted highway infrastructure is via GPS tracking.

There's actually someone who suggested this. Problem is, people are too concerned about security rights to allow this to happen. Which is a shame... as it's the fairest way of assessing road use.

And we still haven't gotten to the part of fire, police and emergency services. There may be privately-run solutions for that, but you'll still need some amount of regulation to ensure that standards are met.

We are already taxed our infrastructure usage fees as fuel taxes. The fuel tax (usage fee) is probably the only justified tax that we have.

While we're on the subject of Anarcho-capitalism, talking about emergency services, the regulation for private services is whether or not they stay in business. If a police force is hired to protect a city, they will be fired by the city if they do a lousy job. Cities here have fired their police stations and replaced them with the county sheriff. It would work similarly, except there would be more security firms looking to do a better job. Same thing with fire and EM services, except EMS would have both hospital clients and fire station units.

 

[YSSMAN]

I think the current Transportation Secretary has been talking about your point here, Omnis. LaHood was suggesting a mileage tax, which the White House quickly rejected. I'm not a fan personally, particularly when the goal would be to increase infrastructure funding, going against the gas tax we already have.

Need more money? Increase the gas tax. Helps to curb consumption as well...

 

[Omnis]

Except that you should only increase the gas tax if you've already cut everything else.

 

[niky]

Interesting... didn't know that was how county sheriffs worked...

---

Yup. Untax everything else, then tax fuel. IMHO, fuel is the only fair thing to tax on cars. (Besides the straight sales tax). Simply because fuel used dictates actual pollution produced and miles driven... not the size of the car or the size of the engine.

 

[Keef]

Yup. Untax everything else, then tax fuel. IMHO, fuel is the only fair thing to tax on cars. (Besides the straight sales tax). Simply because fuel used dictates actual pollution produced and miles driven... not the size of the car or the size of the engine.

We were thinking more along the lines of that; fuel being the only way to regulate how much people use the road network the government has built at our expense. Environmentalism is nothing for the government to decide. That should be left to the innovations of the general public.

 

[niky]

Yeah... I merely added pollution because part of the tax on cars is ostensibly for pollution... which is insane, because any modern car meeting emissions standards will still emit the same amount of pollutants per gallon of fuel burned. And it's all up to the owner how much fuel they burn.

 

[Indigo Heron]

Sorry to say, but I definitely disagree abolishing the income tax in favour of a sales tax. Off the top of my head, the tax does not make a distinction between rich and poor. So, the super-rich get off with robbery while the the very poor suffer.

Also, the retailers are more than likely to maintain prices whilst implementing the tax; this means that the cost-of-living goes up.

If someone is up for an argument, I'm fine with it (don't expect me to get very far, though).

If I were President, I'd raise taxes by 1% on people earning 1 million and raise taxes by 2% on people earning 10 million dollars and more. I'd also implement a gas tax because the lack of one means that no one wants (or is motivated enough) to research for alternative fuel resources, and is why the air is so polluted.

I'd also support the construction of nuclear power plants. Nuclear energy is emissions-free, and is safe.

If it does make any difference, I'd never go to war over oil.

 

[FoolKiller]

Sorry to say, but I definitely disagree abolishing the income tax in favour of a sales tax. Off the top of my head, the tax does not make a distinction between rich and poor. So, the super-rich get off with robbery while the the very poor suffer.

Actually it does distinguish between rich and poor, by taxing their lifestyles. It also removes the ability for the rich to use tax shelters. Nothing the rich can do with their money will hide it from a sales tax.

Also, the retailers are more than likely to maintain prices whilst implementing the tax; this means that the cost-of-living goes up.

But so does your pay check if no taxes are taken from it. I would get about $800 extra per month in my paycheck if there was no income tax.

If I were President, I'd raise taxes by 1% on people earning 1 million and raise taxes by 2% on people earning 10 million dollars and more.

Why do you feel people who make more should pay more? Isn't that the opposite of equality. Is it OK to treat the rich unfairly but not the poor?



I don't think you understand the point of switching to a sales tax. It treates everyone equally, and fairly. No one can hide their money from taxes. Poor people buy less, so they pay less in taxes. And if I choose to save or invest my money I am not punished for it by having it taxed when I take it back out.

A sales tax does not give people bonuses for stupid things like being married or having children.

A sales tax would be the only guaranteed way to make sure everyone pays taxes and it does not discriminate in any way whatsoever.

 

[Danoff]

Sorry to say, but I definitely disagree abolishing the income tax in favour of a sales tax. Off the top of my head, the tax does not make a distinction between rich and poor. So, the super-rich get off with robbery while the the very poor suffer.

Why does treating everyone equally mean that the rich are robbing the poor?

Also, the retailers are more than likely to maintain prices whilst implementing the tax; this means that the cost-of-living goes up.

Yup - but your income goes up.

If I were President, I'd raise taxes by 1% on people earning 1 million and raise taxes by 2% on people earning 10 million dollars and more.

That, of course, would be unconstitutional - as is the current income tax structure. According to the constitution, the government is to treat citizens equally under the law. That means charging one guy differently for the same government is in violation of the constitution.

It's also a human rights violation, but I think I've made my point.

 

[Omnis]

Heron, I think you have a flat rate confused with a flat fee. A flat rate across the population is fair (1% = $1 out of $100; $5 out of $500). A flat fee is regressive, and unfair on the poor ($50 = $50 out of $100; $50 out of $500).

 

[Danoff]

A flat fee is regressive, and unfair on the poor ($50 = $50 out of $100; $50 out of $500).

Well... I don't agree with that, but for the point you were trying to make it works.

A flat fee should be the goal.

 

[Omnis]

Well... I don't agree with that, but for the point you were trying to make it works.

A flat fee should be the goal.

Not for a consumption tax.

 

[Keef]

Speaking of rates or fees, what would be your plan to structure the sales tax? Would you tax a certain percentage of price across the board? Say, 10% or my $1 stick of gum would be 10 cents, and 10% of that rich guy's $100,000 luxury car would be $10,000.

The poorer people would make less, but consume less and be taxed less, whereas the wealthy people--who would most likely not give up their lifestyle to an extent--would make more money, buy more, and be taxed more. At the same rate.

And if people didn't want to get taxed they'd simply buy less or buy cheaper, whether they're rich or poor.

That fact right there would spur competition between businesses because companies know people would avoid higher taxes, so they would all fight to make products more cost effective in an effort to gather as many customers as possible. That would be capitalism at its finest.

 

[FoolKiller]

The poorer people would make less, but consume less and be taxed less, whereas the wealthy people--who would most likely not give up their lifestyle to an extent--would make more money, buy more, and be taxed more. At the same rate.

I'm thinking this is just an error in tense, but are you saying the tax would mean poorer people make less (which it doesn't), or are you talking about poorer people who make less already?

 

[PeterJB]

Here's what I'd do:

Make UK part of the Schengen Agreement

Bring British Troops out of Iraq and Afghanistan

Ban Cigarettes

Make Rugby our National Sport (Unless it already is!)

Ban Battery Farming

Lower the minumum Driving age to 16

Ban School Uniform

 

[YSSMAN]

I'm thinking this is just an error in tense, but are you saying the tax would mean poorer people make less (which it doesn't), or are you talking about poorer people who make less already?

I think he is referring to poorer people who are making less cash already, and would continue to make less money comparatively to those in a better position.

Something I hadn't really thought about until then, but what are we doing about state sales taxes afterward? Say we're dropping a 30% federal tax, and adding to that a 11% sales tax in Chicago... Wow. Talk about high prices on goods.

Or are we all assuming that states would shift from an income tax to that of a consumption one as well?

 

[Keef]

I'm thinking this is just an error in tense, but are you saying the tax would mean poorer people make less (which it doesn't), or are you talking about poorer people who make less already?

The latter. By nature of income the poorer people make less money than the rich and buy less than the rich. With a sales tax they would also get taxed less than the rich.

YSSMAN, all sorts of income tax would be abolished. They would all be replaced by a sales tax.

But I don't think Danoff has mentioned what share of this sales tax would be split between state and federal, and whether or not states have the right to adjust their percentage of the sales tax.

 

[Danoff]

Not for a consumption tax.

Right, but in general I'd prefer a flat fee for all individuals over a consumption tax - but a consumption tax is far better than income.

We'll never get a flat fee until we downsize the government a ton.

Something I hadn't really thought about until then, but what are we doing about state sales taxes afterward? Say we're dropping a 30% federal tax, and adding to that a 11% sales tax in Chicago... Wow. Talk about high prices on goods.

Or are we all assuming that states would shift from an income tax to that of a consumption one as well?

I would propose making it unconstitutional to tax income (it already is, but I'd like people to observe that) - so no, states can't do it either.

We levy a 30% federal sales tax (or something like that), and states would levy whatever tax they saw fit or necessary on top of that. States would also use a flat fee model.

One thing that I hadn't thought of - but which is a minor issue with switching to a sales tax is that it penalizes people who have already accumulated a large quantity of money. If you have $100,000 in the bank right now, you can buy products with that money paying your current tax rate. If a sales tax is instituted, you'll have the same amount of money to buy things at a much higher tax rate - you've effectively lost purchasing power. You're getting taxed on that money twice - once when you made it, once when you spend it.

This would be particularly difficult for retirees who have accumulated a lifetime of wealth and paid tax on it - but then would have to pay tax again when they spend that wealth.

Unfortunately the transitional generations will have the hardest time with this - but I think it's still necessary. Again, unfortunately, I'm not sure I see a good way to phase this into place either. I wouldn't be willing to institute a simultaneous sales and income tax.

To phase it in, it might be necessary to offer retirees a kickback for a period - but it would definitely be a finite period, like 5 years.

 

[Keef]

Sometimes a government does have to break its own rules in extreme times I suppose. After the transitional generation of people went away, though, everything would be fine and dandy. All you could do would be to qualifying people compensation, sort of an apology for that illegal income tax they've been paying for so long.

EDIT: I was just watching CSI, and they were doing some sort of facial recognition search on the computer. I noticed the result for this guy had his picture and name and whatnot, and it also had his employer. Now, I'm not sure if they can actually do that that easily, but I still had a thought.

With this sales tax, if the government had no record of ones employment, does that mean we would have to sacrifice safety--in the form of it being harder for police to find info on criminals--for anonymity?

 

[YSSMAN]

We levy a 30% federal sales tax (or something like that), and states would levy whatever tax they saw fit or necessary on top of that. States would also use a flat fee model.

Hmmm. I get the feeling it would very unbalanced somehow. Particularly in states like California, Florida, or Illinois. The thought of a 40% sales tax on a bag of M&Ms is just weird. Sure, that extra $50 in a paycheck goes a long way, but when I'm paying two more dollars for that same bag of M&Ms... It feels like something isn't "connecting."

(Yes, I like M&Ms. And I'm talking about the $3.80 bags)

Surely, all problems that can be worked out.

 

[Danoff]

With this sales tax, if the government had no record of ones employment, does that mean we would have to sacrifice safety--in the form of it being harder for police to find info on criminals--for anonymity?

...fringe benefit. Government shouldn't be keeping track of every aspect of our lives the way it does.

 

[Keef]

There would have to be a lot of math done to calculate appropriate percentages and whatnot. My state income tax is less than half the federal rate, any my local tax is about the same as state.

If I had no federal, state, or local income tax on my last check from work, I'd have gained over $20, and that's from my decidedly low wage and only 40 hours. My Employee OASDI (whatever that is) was $19 by itself.

Danoff I suggest your next epiphany be about how to get rid of that one. Also, I'd suggest it'd be plausible that crime in general would actually go down without an income tax. Having money stolen from people might be one of the motivators that makes them try to steal it back. Wouldn't it be spectacular if a change like this had that broad an effect?

 

[Omnis]

One thing that I hadn't thought of - but which is a minor issue with switching to a sales tax is that it penalizes people who have already accumulated a large quantity of money. If you have $100,000 in the bank right now, you can buy products with that money paying your current tax rate. If a sales tax is instituted, you'll have the same amount of money to buy things at a much higher tax rate - you've effectively lost purchasing power. You're getting taxed on that money twice - once when you made it, once when you spend it.

This would be particularly difficult for retirees who have accumulated a lifetime of wealth and paid tax on it - but then would have to pay tax again when they spend that wealth.

Unfortunately the transitional generations will have the hardest time with this - but I think it's still necessary. Again, unfortunately, I'm not sure I see a good way to phase this into place either. I wouldn't be willing to institute a simultaneous sales and income tax.

To phase it in, it might be necessary to offer retirees a kickback for a period - but it would definitely be a finite period, like 5 years.

That's true. That could be financed by cutting the world empire, and paid out to people included as part of their return on what they put into social security.

Our national debt is growing exponentially, though-- literally. All of this is a pipe dream until the government stops spending money and destroying private capital.

 

[FoolKiller]

One thing that I hadn't thought of - but which is a minor issue with switching to a sales tax is that it penalizes people who have already accumulated a large quantity of money. If you have $100,000 in the bank right now, you can buy products with that money paying your current tax rate. If a sales tax is instituted, you'll have the same amount of money to buy things at a much higher tax rate - you've effectively lost purchasing power. You're getting taxed on that money twice - once when you made it, once when you spend it.

This would be particularly difficult for retirees who have accumulated a lifetime of wealth and paid tax on it - but then would have to pay tax again when they spend that wealth.

Unfortunately the transitional generations will have the hardest time with this - but I think it's still necessary. Again, unfortunately, I'm not sure I see a good way to phase this into place either. I wouldn't be willing to institute a simultaneous sales and income tax.

To phase it in, it might be necessary to offer retirees a kickback for a period - but it would definitely be a finite period, like 5 years.

Retirees with no further recorded income coming in, or already at the Social Security point get a card that exempts them from the sales tax in some way. Then the IRS knows what we all paid in taxes and so everyone else gets a card that acts as a debit card to cut that from our sales tax in an amount that accumulates into the total. We could make that total amount only the amount you paid out last year, and then offer an opt-in program for people wanting to reveal their already taxed savings. No one has their privacy violated unless they chose to. So their choice is getting double taxed a bit or reveal information about their savings.

I am sure there are holes in this, but I am just thinking off the top of my head. The information necessary for the government to work this out is there, it is just getting it put together in a plan without loopholes.

With this sales tax, if the government had no record of ones employment, does that mean we would have to sacrifice safety--in the form of it being harder for police to find info on criminals--for anonymity?

I fail to see the problem here.

Sure, that extra $50 in a paycheck goes a long way,

If I had no federal, state, or local income tax on my last check from work, I'd have gained over $20, and that's from my decidedly low wage and only 40 hours. My Employee OASDI (whatever that is) was $19 by itself.

What the? Am I getting robbed or do I just make more money than you guys? YSSMAN, I'm aware you are doing part-time jobs in college, so that may make the difference. But I could have swore I had more come out than that when I was doing that in college.

And before someone asks, I actually have them take out so little that I owe taxes every year. However, we still get a refund because my wife has it in her head that a big refund is better than a big paycheck.

 

[YSSMAN]

What the? Am I getting robbed or do I just make more money than you guys? YSSMAN, I'm aware you are doing part-time jobs in college, so that may make the difference. But I could have swore I had more come out than that when I was doing that in college.

It was a rough guess as to what was coming out of all of my federal taxes, plus state and city as well. It used to be more than double that for every check at Steve and Barry's, this is based off my Old Navy income.

 

[Keef]

What the? Am I getting robbed or do I just make more money than you guys? YSSMAN, I'm aware you are doing part-time jobs in college, so that may make the difference. But I could have swore I had more come out than that when I was doing that in college.

I just averaged the deductions of my biggest and a pretty smallish check from the last 6 months or so, and about 26% of my earnings were taken out. The big check was about a quarter percent more, which means that yes, you are being punished for making more money that me. Booyah!

Anyways, that 26% encompasses all, including my insurance payment. Local, State, and Federal income taxes only accounted for about 8.6 percent of either check. I found out what OASDI is--social security--and that accounted for 5.5 percent of my big check. Together they were 14.1%, or just over $59.

Fifty-nine dollars per check? Jesus, I can't imagine how much I'd save if I made buckets like FK. That's almost worth getting up off my ass and starting a revolution!

 

[FoolKiller]

Fortunately I just got paid today and have a stub in front of me. And I am paid salary, so this does not change week to week. But this does reflect my 5% paycut. I don't have a pre-paycut statement handy.

Total taxes (Fed, state, soc. sec., county, medicare) ~ $240
~19%

Taxes + insurance (w/spouse) ~$445.
~35%

Throw in my 401k and you get over $500/40% removed from my check before it touches my bank.

So, if we moved away from income tax I would have nearly an extra $500 a month in my bank account. I should also reiterate that I have it set up so that I owe taxes at the end of the year as well, so my year end total savings would actually be more than this shows.

 

[Danoff]

My wife and I pay over $1000/month in taxes alone. That would go a long way toward handling sales tax.