While seems good, and I even was on the yes side initially, it will hurt the very poor. While I agree, the rich will pay more of an equal share without being able to use loopholes, very poor people may not have to pay an income tax at all due to a very low income. Therefore, taxing on their basic needs will add to their tax burden that they cannot afford. However, a flat tax will help eliminate the wealthy loopholes, while allowing the very poor to not pay high sales tax on basic needs they can barely afford now.
Federal sales tax on all purchases except food. This eliminates the mountains of forms and laws that now exist. Elimination of the loopholes would eliminate all of the IRS with the exception of a small number of investigators who would insure adherence to the collection process. Savings through a smaller government would be immediate and taxes would be transparent and simple. No deadlines, no forms and no congressional time wasted to pay back election donors. Additionally, an opportunity to double tax imported products would allow anyone to purchase the product but would encourage the purchase of "made in the USA" items.
In time this would actual be fair to everyone. The rich will buy more quantity while also buying items more frequently. Think about it in simple terms: a wealthy family may buy two new cars every other year, while a poor family may hang onto one car for 10 years. Now use that thinking for any product being purchased. The system will also need to work in conjunction with the fed gov't curving its spending a slim down. (thus a lower % taxed) The three other big benefits from this would be that the gov't is out of your personal life (no more tax returns!). Secondly, tax fraud would decrease, and finally, everyone who takes from the system will have to pay into the system. Always remember, you can always control your spending, but you can't control your income!!!
They way our tax system is set up, people that live in or below poverty level, know that if they have more children, they will receive more benefits. We as a nation do nothing about overpopulation, if fact we encourage it by our tax deductions, and entitlement programs. If people realized that they and they alone would being paying the costs of raising their children without government aide and tax advantages, perhaps they would not have as many children, or at least not have them to continue receiving aide. In 2014 over 25% of the children (under 18) were on welfare in the State of Texas.
Tax fraud has cost taxpayers 5.2 billion. 2013 tax season has been the hardest hit. A federal sales tax would end this problem, along with dissolving the incompetent IRS. The figures speak for themselves. Defrauding the IRS has become a business. Prosecution costs will be exorbitant. The tax payers pay.
By having a flat sales tax, people would have more freed up money to spend. This would stimulate the economy and retailers would hire more people. These people would be paid out of profits after it has been taxed, and would have money they did not have to spend that would be taxed, and on and on. The lower the tax, the more the economy thrives, the more money is moved around and the more times it will be taxed. If taxes are low enough, the economy would boom with new businesses and new jobs that pay more because of the lack of unemployed people and the income of all would rise on the tide of economic growth.
I'm a big supporter of this shift. Significantly reduces bureaucracy, simplifies life for everyone with a job, and it would give people more freedom to make choices with their money. The important part would be how it's implemented. There should not be a flat federal sales tax. There should be 2-3 categories for items. Essential goods should be taxed at a lower rate than luxury goods.
The Founders would be flailing and foaming at the mouth in their graves if they knew of the IRS. Scrap the personal income, death, payroll and corporate income taxes. Make a 1% national sales tax. Slash abuse, waste & fraud to fit whatever tens of billions the 1% comes to. FORCE the OverFedGov to spend wisely and SHRINK. Free the citizens from fear of totalitarian oversight and fear of imprisonment for daring to earn a living and enjoy the fruits thereof.
IF YOU GET NOTHING ELSE FROM THIS DEBATE, MAKE SURE YOU GET THIS ONE FACT:
The ONLY people who are against abolishing the IRS in favor of a low national sales tax are the 47%ers who pay zero income tax now but would finally have to pay their FAIR SHARE under the new, sane, sensible system. Period. End of paragraph.
Vehicle for collection already in place at the state level.
Major tax dodge companies will have to pay their share for a change.
So simple to administer. NO loopholes. Low income situations can file for tax reimbursement based on income level. Corporate tax attorneys will have to get real jobs. EVERYBODY PAYS ! Period! Internet sales included!
Everyone would have to pay their fair share. With more and more illegals entering the country and the government doing nothing about it, the American tax paying citizens are struggling just to take care of their family. A federal sales tax would make it fair to everyone and we would be able to eliminate the IRS which can't even save emails.
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.
While it sounds right on the outside, a tax such as this is really no better or different than an income tax. The income tax is figured on a progressive scale that has people who earn more paying a higher percentage than those earning less. Since richer people have more money, they obviously buy more stuff, and would, once again, pay more in taxes. Therefore, a tax like this would achieve nothing and look very underhanded and bad on our government's part.
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 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.
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.
The leak is in spending; fix the leak and then we'll figure out how to decrease taxes. Otherwise, this is just an alternative way to raise money that will be wasted. Many people confuse *lower* taxes with *fair* taxes - which is an oxymoron in the first place: "fair" and "tax" shouldn't even be in the same phrase.
If you actually do the math, you'll find that this doesn't lower anything; just moves the costs from the rich to the poor. I think those who earn their money should keep it - including the rich. But creating a vast economic gap between the rich and the poor is not exactly the way to avoid a 1780 France. Do we really want to eat cake?
Think about it. Say, someone makes $30,000/year. Under current (2014) brackets, they'll pay income tax (15%) on $21,074 of it. That's a $3161.10 tax liability. Fair Tax is going to be about 23%. Let's say they spend $1300/month on rent, utilities, and groceries (all supposedly exempt from a nation-wide tax...But since when has our government agreed to permanently exempt anything?), and the remaining $1200/month goes to gas, clothes, non-grocery items, furniture, electronics, entertainment, and dining out. That's $14400/year, which, in a 23% tax comes to a $3312 tax liability.
And that's if our notoriously waffling government keeps it at 23%.
Besides hurting those with lower income, we're tempting people to buy internationally, producing a shortage of American jobs - and tempting people not to buy at all, which is good for long-term economy, but fatal short-term. We shouldn't punish for earning money, but should we punish for providing the means for people to earn money - i.E., buying? We're supposedly putting the IRS out of business, which sounds great, except we're transferring the workload from them to the shoulders of the sales tax collectors - businesses. That will be doable for the large retail stores, but small businesses spend hours every month (I know; I used to be a bookkeeper for a small store) filing taxes. Do we really want to make it harder for them to make ends meet?
The tax system needs serious work. But I think people are so in love with the "Fair Tax" name, they aren't paying attention to the ramifications.
In the past few years, the income of the top 1% has increased 275%, and the flat tax would just worsen this! The rich would have no income tax, and the sales tax would be a mere part of their yearly income. In addition, why should we tax those making $50,000 yearly the same amount as those making $1,000,000 yearly? Furthermore, if we decrease the salary of the poor, a chain reaction will occur, as they will be forced to use more healthcare provided for them.
Many people buy things in the store, including kids. With sales tax, kids would have to pay more for the things they like. A little kid also doesn't have to pay income tax, seeing how they don't make money. I think that federal income tax is the better way to go.
Give the government a chance and they will make it worse. The less they do the slower they over tax us and spend more money that the US does not have. If they CHANGE from an income tax to a sales tax it might work if certain exceptions like those in NY State are used. Food and Medical should not be taxed.
No matter how gleefully supporters argue that a federal sales tax will encourage people to save, they are merely obfuscating the fact that this saving comes at the expense of spending that creates demand, and it is always demand that creates economic growth. Nothing supply-siders say about giving businesses money to "create jobs" addresses the basic economic fact that it is demand that creates jobs.
People do not create businesses in order to add jobs to the economy, they crate businesses to make money, and the only way they can make money in a capitalist system is by meeting demand. No demand, no business. No demand, no new jobs.
Therefore any, and all, arguments supporting supply-side stimulus are merely ideological, and are not accurate.