1% tax on all goods and services, exempting determined basic needs. This tax would added to current irs and state sales taxes. Costs on everything seems to always go up, so how do we pay for them? We either pay a little more or get a little less, just ,for example, coffee. Fact of life is you can't get what you want and need for last years price. Research the expected tax revenue and adjust federal spending to eliminate or at least substantially lower our cost over-runs. I know this seems a little simple, but I favor the kiss principle. Plus it seems this could happen fairly quickly ,if the congress would consider the best interests of the majority of the people in the us instead of their own self interests. (getting reelected ,getting wealthy, and making their party happy with them).
I believe a federal sales tax would be more equitable than the current federal income tax as long as it is not an additional tax. A federal sales tax would effect people equally throughout income levels because the more you purchase the more you pay, which means if you don't make a lot of money and don't purchase items you would pay less, likewise the more goods you buy the more tax you pay. I also agree that a flat federal sales tax would work fine as long as the current federal income tax is abolished.
Capitalism is driven by consumerism. The "American" way of life is based on buying things. We are told to work hard so we can buy the so-called finer things in life. In this day in age, Americans, in general, are driven by greed and over consumption, to always have the newest and best things in life. I don't think a federal sales tax could lose in this country unless it is brought into action while the federal income tax is still active. You have to do away with the income tax in order for the federal sales tax to be beneficial. You can't raise the prices of everything while continuing to take money out of paychecks, it just won't work.
A national sales tax would fall evenly on all citizens regardless of their income. No matter who purchased, for instance, a washing machine, they would have the same tax placed on the purchase price; there would be no level of differing taxes based on income. For this to be truly equitable there must be no exemptions for luxury goods, such as yachts, to shield the rich.
All too often, higher income earners and business enterprises pay less tax than rank-and-file workers. A national sales tax, as a form of consumption tax, would tax every one equally across the board, and people who spend more would pay more taxes.
Those who have undocumented income would be required to pay taxes on their purchases, which would prevent them from avoiding federal taxes.
With the current tax bills and medical insurance going sky high since Obamacare, the only way to equally share the pain is through a Federal Sales Tax. Not on staple foods, clothing, except Luxury items. Hit everyone the same way. Lower incomes who buy more food and basic clothing will not be hit as hard as the ones buying Vineyards and G6's. How much odes the Goverment pay the IRS in salaries to harass middle income Americans? Why not just turn the IRS into tha sales tax collecting agency and get rid of a tax program that has turned the 1040 into a lesson in Astro-Physics and Nuclear Reactor Engineering?
This tax would also hit those purchashing items with illegal untaxed income such as gambling, drugs, working under the table, etc. The poor already pay a federal sales tax on gas, liquor, and tobacco products. Who uses more of those products, the rich or the poor? Are we defining POOR as anyone not having a cell phone? 47% of Americans pay no federal income tax. Guess the rest of us are rich and should support this overwhelming minority.
When income is taxed, it always ends up with the rich people being taxed at a much higher rate than poorer people. The poor people then start to feel entitled to other people's wealth. If everyone is taxed based upon a fixed sales tax rate, then no one group of people can band together to take other people's money.
Presently, 47 percent of Americans do not pay any income tax, at all. That kind of percentage of citizens not contributing is not healthy for our society. It can be argued that if everyone had to pay a federal sales tax, then everyone would be more involved in making sure the federal government does not waste the tax payers' money.
A national sales tax would be inequitable to the poor who spend more of their income on purchases than the wealthy. The purpose of our tax system is to tax the wealthy more than the poor. They benefit more from our society than the poor and should pay more. The problem with the current system is that it has become so complicated with the constant changes. The progressive nature of the tax system would be benefited by simplifying it, but not creating a national sales tax.
Federal sales tax would burden everyone equally regardless of how well they can afford to pay tax. It would immediately raise the prices of all products, making purchasing power of an average consumer deteriorate. The true solution of any government is not to draw middle and lower class by further taxes, but to spur economical growth so that the existing tax system can contribute more to government's coffins.
In theory, a federal income tax might seem fair, because people with more money would pay more taxes if they spend more money. However, people have many basic needs, and there are a lot of people who can't afford to pay more spend more than they already are. People with a lot of money would have a choice of not paying more tax by not buying unnecessary items, while low income people who only spend on basic needs would not have the choice.
A sales tax appears to be equal across the board. It is not, however, due to the fact that there is a certain amount of things that are necessities that everybody must purchase. If the income tax is abolished, lower income people will pay a greater percentage of their income in tax than higher income people, simply because lower income people spend a greater percentage of their income than higher income people do.
I live in a state where there is no income tax, but we pay a 9.25% sales tax on everything we buy. The problem with sales tax is that the people who can least afford to pay it have to carry the burden of it. Those who are able to pay the extra, might not seem bothered by it. I can understand the temptation to use a sales tax, especially on unessential items. But, when you buy $100 dollars worth of groceries, then have to pay an extra $9.25 on top of that, it will bust your budget if you have a limited income. Now, suddenly, you are out of the $10 you needed to buy diapers for the kids. This is the kind of regressiveness that a sales tax can cause.
Everyone (rich and poor) needs to buy things like food, clothes, utilities and these expenses often take up the majority of poorer peoples income. If they are paying the same tax levels on these as those who earn a lot more money, their percentage of tax paid is going to be much higher than those on higher incomes which is unfair. Income taxes also have their problems but ideally under this system those in poverty should pay less tax and is thus a more equitable system.
If income taxes were eliminated and replaced with sales taxes, the hardest hit would be the lower class, who can't afford to save money and have to spend everything they have simply to keep on going from day to day. The wealthy, by contrast, would save all their money, investing it in ways that wouldn't be taxable, thus maintaining a 'rich get richer' feedback loop that would ultimately destroy the economy.
People must pay their bills and put food on the table, so they must earn an income. The purchase of a particular product, or any beyond the necessities, is contingent on numerous individual factors, such as financial stability, disposable income, and current obligations. Additionally, the calculation of Gross Domestic Product involves the analysis of governmental income based upon verifiable and stable sources of tax revenue, whereas the proposed system would shift government income to a system that is unpredictable at best and mathematically chaotic at worst. Imagine experiencing stock market declines on the governmental level such that nations begin to rise and fall according to market trends. That would be the result of this move. Furthermore, the combination of income and sales taxes would introduce the same element of unpredictability while also straining the open market by causing immediate false inflation. The only viable application I can think of for this idea is the introduction of federal sales taxes on cheap, high-traffic products such as alcohol and cigarettes, treated as windfall profits for government, and used to soften budget deficits in an intentionally unanticipated manner such that fiscal year outcomes become perpetually better than expected.
There are basic needs that every person, rich or poor, must have. To tax heavily the basic needs and services that everyone must purchase is to place an undue burden on the poor. Certain basic things would become completely unaffordable for those who didn't have much money. The rich and poor would basically be paying the same taxes, but it would cripple the poor while not affecting the richest. This is not a humane concept.
Federal sales tax sounds like a good idea at first, but there are many problems with it. Among these problems would be that it discourages consumption, which in the long run, hurts our economy. It is also unfair because it taxes the poor at a much higher rate than anyone else. If a poor person has to spend 100% of their pay check to get by, then they get taxed on 100% of their pay check. Whereas a rich person might only spend 20% or 30% of it, leaving them largely untaxed.