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Thread: National Sales Tax

  1. #1
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    National Sales Tax

    IS THE NATIONAL SALES TAX THE FAIREST PLAN?

    http://www.youdebate.com/DEBATES/TAX_NATIONAL_SALES.HTM

  2. #2
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    I;ll bite...

    This seems to simply depend on whether you believe that people with more and can afford to pay more should pay more. A national sales tax would shift much of the tax burden on the poor. I think there was something on the web site about offering a rebate, but that would seem to be incredibly complicated, and I thought one of the pros of this system would be to simplify taxation.

  3. #3
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    Quote Originally Posted by admin
    IS THE NATIONAL SALES TAX THE FAIREST PLAN?

    http://www.youdebate.com/DEBATES/TAX_NATIONAL_SALES.HTM
    Yes!
    fairtax.org

    It repeals the 16th amendment thus eliminating the income tax.

    No federal taxes are taken out of your check.

    Everyone will get a rebate (in advance) every month up to the poverty level, so that the poor will not pay any taxes at all.

    It will eliminate all corporate taxes, FICA, death taxes, gift taxes.

    Eliminates all "embedded" (hidden) taxes, thus lowering prices.

    It will bring jobs back to America.

    America will be "The Place" to do business again in the world.

    Corp. HQ's will relocate to the US.

    Economic growth will increase dramtically.

    April 15th will be just another spring day... no more income tax form to fill out.

    ...and there are many more positives benefitting EVERY individual and EVERY business in America

    For more info, see www.fairtax.org

  4. #4
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    At first look the pro seem to outweigh the cons. It certainly sounds simplier and would effectively stop tax evasion.

    Do you think it would cause a temporary decrease in the purchase of new goods? Used items would be considerable cheaper. Of coarse they wear out and would need to be replaced with new items that get taxed.
    I appoligize for nothing but my spelling.

  5. #5
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    How would they end up working with online purchases? They would almost have to tax online purchases if this were in effect.
    Hail to the ones who came before us

  6. #6
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    I have a couple of questio9ns for ValiantForTruth’s statements
    Everyone will get a rebate (in advance) every month up to the poverty level, so that the poor will not pay any taxes at all.
    Are you saying that the government would send a check to the poor families on the first of the month, for exactly the amount of tax they will pay in that month? And how would the government know the right amount?

    It will bring jobs back to America.
    why, the corp’s can still pay the workers $1 a day in other countries.

    [/QUOTE]Economic growth will increase dramtically. [/QUOTE]
    Once again, why? The government will still need the same amount of money (or as history shows more)
    I ONLY APPOLIGE FOR MY SPELLING!

    federal code defining the militia, look it up for your self.
    Title 10, Subtitle A, Part I, chapter 13, Sec. 311.

    “To announce that there must be no criticism of the president, or that we are to stand by the president, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.” — Theodore Roosevelt.

  7. #7
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    I've watched, participated in and heard this type of debate subject for more years than I can remember. Regardless of what form tax reform speculation takes, it always comes down to what would make it happen.

    I'm sure most posters are aware that as a nation we're currently in a somewhat precarious financial position, deficit spending now accounting for a major portion of the annual federal budget and foreign entities purchasing those treasury issues required to keep our leaky boat afloat. Investments such as bonds are floated on a combination of credit worthiness, ability to service the debt and market demand. That requires constant monitoring of our economy, the dollar and political circumstances (what we're doing) by any prudent investor. They all know us well and any change would have to offer them a premium to go through that change. Commerce doesn't like change without benefit. That just cuts earnings. Our IRS, a mature bureaucratic monster, would be a nightmare for at least three years.

    My opinion is that revenue would require an increase in taxation, at least 20% to pay for the administrative changeover the first year, to make it fly. Then an upward progression to meet established goals that would satisfy the investors. You're talking about changing the largest non-military system we have, still not completely networked. Any idea of how massive that is?

    A national, all-encompassing, internet being the easy one, single tax collection will require some changes, and this country is still clinging to many traditional values like constitutional rights. Any decent system will be able to trace every sale from manufacturer/seller to consumer. Human nature being what it is, that will create a substantial black market. And a new class of criminal to service it. Random, official checks to dertermine if the tax was paid? Some big adjustments.

    What crisis will it take to make it happen?
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  8. #8
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    Quote Originally Posted by emclean
    why, the corp’s can still pay the workers $1 a day in other countries.
    I think it is suggested that a simpler tax code and paying less in taxes will be helpful in attracting companies here. Sure you still have the $1 a day labor camps in other countries but helping the business environment here sure won't hurt.

    Once again, why? The government will still need the same amount of money (or as history shows more)
    Or maybe a bit less if we don't have to fund our IRS any longer. And maybe companies will spend less wasted money on their tax accounting and be able to improve their products or lower their prices instead.

    This raises another question. Think of the number of jobs that would be lost in the accounting and legal fields alone to this. Wonder if it would be at all significant?
    Hail to the ones who came before us

  9. #9
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    Quote Originally Posted by emclean
    I have a couple of questio9ns for ValiantForTruth’s statements

    Are you saying that the government would send a check to the poor families on the first of the month, for exactly the amount of tax they will pay in that month? And how would the government know the right amount?
    Yes, the government would provide EVERY "American" family (rich and poor) with a rebate of the sales tax equal to spending up to the federal poverty level. This rebate would be paid in advance and updated according to the Department of Health and Human Services poverty guidelines.

    For example, based on the 2003 guidelines, a family of four would be able to spend $24,240 annually tax free. Therefore, every family of four would receive a rebate check of $465 each and every month ($5,575 annually).

    $24,240 times 23% = $5,575
    $5,575 divided by 12 months = $465

    The rebate is simply an annual amount divided into 12 equal payments. The amount depends on the size of your family, and the poverty level.


    Economic growth will increase dramtically.

    Once again, why? The government will still need the same amount of money (or as history shows more)
    With the penalty (INCOME TAXES) for working harder and producing more, removed, Americans are free to keep every dollar they earn, and a new era of economic growth and job creation is unleashed. How? Hidden taxes will be history, Employees will bring home 100% of their paycheck, Americans will be able to save more, and businesses will be able to invest more. Thus, Capital formation (the real source of job creation and innovation) will be facilitated. Gross domestic product (GDP) will increase by an estimated 10.5 percent in the first year alone.

    The FairTax as proposed will raise the economy’s capital stock by 42 percent, its labor supply by four percent, its output by 12 percent, and its real wage rate by eight percent.

    repatriate - (def.) To bring home assets that are currently held in a foreign country. Domestic corporations are frequently taxed on the profits that they repatriate, a factor inducing the firms to leave overseas the profits earned there.

    U.S. companies with investments or plants abroad will bring home overseas profits without the penalty of paying income taxes, thus resulting in more U.S. capital investment.

    As U.S. companies and individuals repatriate (on a tax-free basis) income generated overseas, huge amounts of new capital flood into the United States. With such a huge capital supply, real interest rates will remain low. Additionally, other international investors will seek to invest here to avoid taxes on income in their own countries, thereby further spurring the growth of our own economy.

    Since all U.S. exporters will immediately see an average 20-percent reduction in their production costs (because of the missing hidden taxes), they will experience an immediate boost in their competitiveness overseas. American companies doing business internationally will be able to sell their goods at lower prices but similar margins, and this will bring jobs to America.

    Also, imports and domestic production will be on a level playing field. Exported goods will not be subject to the FairTax, since they are not consumed in the U.S. But imported goods sold in the U.S. will be subject to the FairTax, at the retail point of sale, because these products will be consumed domestically.

    The Fair Tax is simple, and will resolve many economic problems. This is because taxing INCOME is like trying to run a Marathon into a 50mph headwind... it holds you back. Getting rid of the INCOME tax will be like turning that headwind into a tailwind. It will be a "boost" to every American.

    Don
    www.fairtax.org

  10. #10
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    I can see some of the pros with a system like this, but my biggest concern would be that people would stop spending as much because of huge taxes on items (they would be huge because the government would need/want as much revenue as they did before this system.) If this did happen, the economy would actually worsen.
    And, like emclean, I don't think that this would encourage businesses to have their HQs here because the benefits of being elsewhere would be exactly the same, seeing as most of these companies hardly pay any taxes anyway and the labor is cheaper. There wouldn't be any real incentive to move back here.
    Truth gains more even by the errors of one who, with due study and preparation, thinks for himself, than by the true opinions of those who only hold them because they do not suffer themselves to think.
    -John Stuart Mill

  11. #11
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    Since all U.S. exporters will immediately see an average 20-percent reduction in their production costs (because of the missing hidden taxes), they will experience an immediate boost in their competitiveness overseas. American companies doing business internationally will be able to sell their goods at lower prices but similar margins, and this will bring jobs to America.
    why would the goverment let 20% of the tax money they get from US exporters just go away? the goverment loves to spend, they would find uses for the money.
    I ONLY APPOLIGE FOR MY SPELLING!

    federal code defining the militia, look it up for your self.
    Title 10, Subtitle A, Part I, chapter 13, Sec. 311.

    “To announce that there must be no criticism of the president, or that we are to stand by the president, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.” — Theodore Roosevelt.

  12. #12
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    How to restore health to the economy

    Here’s the way to generate (inside the U. S. economy) "heaps & gobs" of money that will be looking for a place to be spent or invested.

    America is currently plagued by the problem of joblessness, and in spite of the best efforts of those in charge of remedying it, little, if any, progress is being made. Other countries such as China, Japan, Korea, and others seem not to have this problem to the great extent that the U. S. A. does. America’s retail shelves are stacked with cheaper foreign goods that have driven American manufactured goods out of the market. Americans no longer provide many services in the U. S. A. because they have been outsourced to foreign countries such as India because labor costs are much cheaper there.

    Methods of taxation in other countries also contribute to the American unemployment problem. Most Americans do not realize the Europeans, Australians, and Canadians (with their GST----Goods and Sales tax), and countless others with a VAT (Value Added Tax) have had a discriminatory tax on American goods and services for decades! This discriminatory tax is 15 to 25% in Europe.

    It works like this: every business has many costs, one of which is taxes (payroll taxes, profits taxes, etc.). In the U. S. A., these costs, like all other costs, are included in the prices of our products, but we don’t itemize (clearly showing) the specific increment that is taxes. When we ship that product to Europe, etc., they add the VAT to the already tax-laden American product.

    Companies in the VAT countries, like American companies, have to pay taxes, but they keep track of the taxes as the product proceeds along the production process. They call the incremental taxes VAT. When the product is put on the retail shelf in Europe, etc., it includes the VAT, and the VAT is revealed to the customer.

    Now it gets interesting: when a tax-laden American product (about 22% on average) is put on the shelf next to the EU product, in Europe, the VAT is added to the American product. Now the American product is 20+% more expensive than the comparable EU product! Guess which one sells?

    Conversely, when the EU product is exported, they remove the VAT! When that EU product is exported to the US, it sits on the retail shelf in the US with no taxes included right next to the American product with all the taxes included! So, once again, the American product is 20+% more expensive than the comparable EU product, and on our own shores! Guess which one sells?

    We have put up with this nonsense for decades, while we debate tariffs on foreign steel and other like products produced domestically in the U. S. A. that must be protected from foreign competition if our domestic industry is to survive. Tariffs and other protectionism measures have not proven to be a satisfactory solution in protecting our domestic job market. The Smoot-Hawley tariff of 1930 was enacted to protect the American farmer from competition from much cheaper imported farm products. It represents the high-water mark of U.S. protectionism in the twentieth century, and it precipitated negative results (retaliation by other countries).

    There is a plan all ready to go that, if enacted into law now, will produce the kind of super-rapid economic growth and new job-creation that is sorely needed, plus generate many additional good results for our nation! It is H.R. 25, the Fair Tax Act of 2003. This bill has bi-partisan sponsorship, widespread support among the hard-working taxpayers/voters, and fast growing support within the House of Representatives (over 55 co-sponsors) and Senate.
    The Fair Tax will produce these highly desirable results:
    · Our nation will enter a period of many years of sustained economic growth with new job-creation unequalled by anything in our past history.
    · The Fair Tax plan will bring back a measure of fairness and freedom to America that has been sorely trampled-upon by the Income Tax System (and IRS) for many, many years.
    · Receipts from the Fair Tax will be more than sufficient to fund the Social Security System and Medicare, plus enable the government to meet its needs and steadily pay-down the national debt.

    The Fair Tax draws on a much larger tax base (our GNP, gross national product each year, when it is sold) than does the income tax; virtually no one will be able to evade paying at the "check-out" register. This will lighten the load for all of us. Under the Fair Tax the "sticker price" of all that you buy will fall 20-30%. So, even with the 23% Fair Tax added on, the cost of living would be no more than it is now, more likely it would be less.

    The Fair Tax will:

    · Replace the current complex and unfair federal tax system with a simple sales tax.

    · Eliminate personal and corporate income taxes and Social Security, Medicare, gift and estate taxes.

    · Save taxpayers $250-$600 billion now being wasted in complying with the current tax code.

    · Lower "sticker" prices 20-30% by removing the cost of business compliance with the current tax code.

    · Make American products more competitive with foreign products. Thus, hurling American manufacturing levels to dizzying heights not seen within recent memory.

    · Provide a more stable revenue source and raise the same amount of money for the federal government with the imposition of a 23% sales tax with no loopholes.

    · Dramatically lower tax rates for lower and middle-income Americans by pre-bate payments to households to offset the sales tax on necessities.

    · Protect and ensure the funding of Social Security and Medicare.

    · Repeal the 16th Amendment and eliminate the Internal Revenue Service as we know it. Taxes on income will no longer be constitutional.

    · Bring capital investment flooding onto American shores. Business, no longer being taxed, will enjoy America as the most “business-friendly” nation on earth.

    Whole-heartedly support House Resolution #25---the Fair Tax reform proposal as a curative solution to relieve the American people of the tyranny of our present tax system (income tax IRS) and put Americans back to work. That would be a great legacy to leave the American people.

    The current 7-million-word tax code requires 1,168 pages (2 volumes) to publish, and an additional 6,439 pages of Federal Tax regulations that apply to income taxes. The IRS has created 480 tax forms with an additional 280 to explain how to fill out the 480. More Americans work in tax compliance occupations (CPAs, tax attorneys, etc.) than serve in the entire U.S. Armed Forces. The IRS is twice as big as the CIA and five times the size of the FBI. The compliance costs dwarf the amount of the tax collected. In addition to that, the IRS spends a yearly $10 billion budget. The total national cost of compliance (not counting the taxes paid) is $250 billion yearly. That's $850 per capita of U.S. population.

    The Fair Tax reform proposal, which may be fully understood at the website www.fairtax.org, is the best alternative to replace the IRS. It is a simple (retail only) national sales tax. It is not a VAT (value added tax---applied at every level of the production process). Business-to-business transactions, not being retail, are not taxed. Nothing is deducted from the employee’s paycheck. He has to spend it on new goods only, not used goods, for it to be taxed. Thus, one is in charge of one’s own "tax destiny.”

    The individual person is allowed to spend the first $8,860 of his yearly income tax-free (he will get monthly reimbursement refund checks for taxes paid on that amount), $17,720 (for a couple), $20,800 (household of 3), $23,880 (h.h. of 4), $26,960 (h.h. of 5), $30,040 (h.h. of 6), $33,120 (h.h. of 7), $36, 200 (h.h. of 8).

    Under this system, "sticker" prices would fall 20-30%, thus, giving our exports a much better competitive edge when sold abroad. This would "kick" the economy into high gear. Businesses (no longer having to send the IRS any money at all) would simply pass the savings on to the consumer, their shareholders, and their employees as higher wages. Forty-five of the fifty states use a sales tax to generate revenue because they know that it is the fairest, simplest, easiest, most cost-effective, most problem-free method of taxation. The state taxing authority in each state would assume the duty of collecting the national sales tax for the U. S. government. Only the retailers file a tax return stating the amount of their sales for the year. For everyone else, April 15 is just another spring day.

    Each taxpayer gets a monthly refund check in the amount taxed on his spending up to the poverty line. So, in effect, he is only taxed on his spending above the poverty line. In no case will anyone sacrifice more than 23% of his total income to the sales tax, even if he spends all his income on retail purchases.

    Unspent income remains tax-free and available for investment or education expenses. Compliance cost of administering the Fair Tax is only $8 billion yearly. That is a big savings compared to the $250 billion we now pay. The IRS, with all the taxpayer support services that it has made necessary, is intolerably burdensome and expensive.

    At the Fair Tax website, don't stop with the first frame. Click on each of the major headings for more complete information. It will take awhile to do all this, but it is well worth it. You will learn everything you've always wanted to know about the economy and taxation, but were afraid to ask!

    See also:
    http://www.fairtaxvolunteer.org/mate...omparison.html
    and http://www.geocities.com/cmcofer/fca3.html.
    Then go to www.congress.org and tell your congressmen that you
    want the Fair Tax Act, HR 25, passed into law ASAP!
    America, producing an endless supply of high quality, competitively priced goods and services, will have a behemoth-size trade surplus. An ever-expanding economy will shift the balance of payments in favor of the U. S. A. America will be a lender to many, a debtor to none. There will be jobs and income for all who will work.

    “There is nothing more powerful than an idea whose time has come.” ---Victor Hugo.

    Sincerely Yours,

    John Paul McDaniel

  13. #13
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    What's the cost and compliance impact for changeover on this one? I've seen many proposed tax reform packages and few include even estimates on that monster or list the premiums that our investors insist must accompany any change to accommodate their analytical model changes.

    There are two schools of thought on tax reform regarding the IRS (or whatever name is used to identify revenue collection). The restructuring of such a giant bureacracy boggles my mind, much less the systems networking and administrative policies. A new bureacracy is even more frightening considering how much carry-over from existing code would be involved. I assume you have a trust containing tax-deferred and tax free investments and have taken some of those factors into consideration. No more tax free bonds? Guess where that massive amount of capital will go.
    These are my principles. If you don't like them I have others. ~Groucho Marx~

  14. #14
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    Quote Originally Posted by chugalugalug
    .

    Methods of taxation in other countries also contribute to the American unemployment problem. Most Americans do not realize the Europeans, Australians, and Canadians (with their GST----Goods and Sales tax), and countless others with a VAT (Value Added Tax) have had a discriminatory tax on American goods and services for decades! This discriminatory tax is 15 to 25% in Europe.

    It works like this: every business has many costs, one of which is taxes (payroll taxes, profits taxes, etc.). In the U. S. A., these costs, like all other costs, are included in the prices of our products, but we don’t itemize (clearly showing) the specific increment that is taxes. When we ship that product to Europe, etc., they add the VAT to the already tax-laden American product.

    Companies in the VAT countries, like American companies, have to pay taxes, but they keep track of the taxes as the product proceeds along the production process. They call the incremental taxes VAT. When the product is put on the retail shelf in Europe, etc., it includes the VAT, and the VAT is revealed to the customer.

    Now it gets interesting: when a tax-laden American product (about 22% on average) is put on the shelf next to the EU product, in Europe, the VAT is added to the American product. Now the American product is 20+% more expensive than the comparable EU product! Guess which one sells?

    Conversely, when the EU product is exported, they remove the VAT! When that EU product is exported to the US, it sits on the retail shelf in the US with no taxes included right next to the American product with all the taxes included! So, once again, the American product is 20+% more expensive than the comparable EU product, and on our own shores! Guess which one sells?
    The GST and VAT are sales taxes, it is not discriminatory, the problem with american manufaturing is that it is not competitive for the most part. High costs, not directly tied to wages on the factory floor are driving manufacturing out of the US.
    Admittedly, the concept of the Straussian text is one susceptible to intellectual mischief in the form of wild claims about the esoteric meaning of texts, not to mention rather off-putting for anyone who doesn’t like know-it-all elites.
    Orthodox Judaism, not to mention other religions: there is a small number of men who know the detailed truth; the masses are told what they need to know and no more

  15. #15
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    Quote Originally Posted by emclean
    why would the goverment let 20% of the tax money they get from US exporters just go away? the goverment loves to spend, they would find uses for the money.
    If the product doesn't sell (because it costs more), then they aren't getting it anyways!

    This 20% worth of taxes is not being lost, it is simply being acquired in a different way. Instead of taxing money when it is earned (INCOME) to collect revenues, the govt. will be taxing "consumption," ie. money when it is SPENT.

    The national sales tax is NOT in addition to the income taxes we are currently paying, it REPLACES the income taxes we are currently paying. Under the Fair Tax (HR25), taxing income would become ILLEGAL by the repealing of the 16th amendment (the income tax amendment).

    So, fear not, the "gov" will still be getting their (correction, OUR) money.

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