WTF? A 30% sales tax? End the IRS? Who's the wacko in Congress with this idea?

Yeah, ending the IRS is a good sound bite, but doing that and going with a sales tax, ergo, the old 'consumption tax' idea has been around for a long long time and it has never, as in not ever, been a good idea.

Oh, sure, it would be nice not to have to file taxes every year, they are such a dreaded chore, but it's a bad idea, and here's why:

Because it will greatly raise taxes on the little guys, and lower taxes on the big guys.

No democrats or even sensible republicans would ever support such an idea.

Who's behind this?

Rep. Buddy Carter (R-Ga.) has already filed legislation for this "Fair Tax Act,"

https://www.yahoo.com/news/kevin-mccarthy-disavows-30-percent-071657725.html

No, even though McCarthy promised something along these lines, word I get is that
that he opposes it, now that the trial balloon has fizzled in the public arena on the idea.

Good thing, it's a terrible terrible idea.

That and flat taxes are terrible ideas.

But, secretly, I think McCarthy and some hard right wingers like the ideas.

 

One congressman out of hundreds says something stupid and you make a major issue out of it. Straight out of the democrats talking points play book.

Secretly? You are not very good at keeping secrets.

 

I love the idea of ending the IRS! A 30% sales tax is a bit high but I like that too

 

I would like to know all the particulars before making a decision for or against. A pro and con list would help. I don't like the idea we have now of taxing/penalizing those who are successful in life while letting the slackers/lazy off with a small tax or no tax or a reverse tax. It would be nice not to have to file a return, complicated and requiring you to pay someone to file for you, and I'm all for getting rid of many government departments, like the IRS.

 

This is nothing new, it's all old, rehashed Grover Norquist "fair tax" or "flat tax" kind of stuff, which has been with us since the late 80s, early 90s. This ALWAYS makes a comeback when the GOP controls the House and a Dem is in the WH. Last time, in 2012, when Obama was president, 95% of the House GOP members singed the taxpayer protection pledge. Of course, that's also when the Tea Party had its hay day.

Miraculously, all the Tea Partiers, who were "concerned" about the deficit and high taxes, disappeared when Trump was elected, and with it disappeared all the RW talk about the deficit and the fair tax.

Watch more of this stuff make a comeback, as the GOPers in the House are trying to attract low-information voters who HATE to pay taxes. All these poorly-conceived tax reform proposals bank on selling voters the prospect of incredible riches -- if they could only pay less taxes to the hated government. Of course, these people NEVER mention the consequences.

 

Supporters of this say it will be at least revenue neutral, will be a boon to low income people who will receive a "prebate" check each month, and will cause goods manufactured in the U.S. to cost less at retail. In addition, the tax is only on new retail items, so a used car, for instance, would carry no additional tax.

 

LOL! Just as I stated in my above post. Riches for all at no cost. The typical "get something for nothing" scheme, just as "tax cuts pay for themselves". How did THAT work out?

People, stop listening to those snake oil salesmen. If it sounds too good to be true, it most certainly is. The laws of physics tell us that you can't get something for nothing. That's what I would go by, not what some GOP politician with an agenda is telling you to believe.

 

It works in WA, and several other states iiuc. In WA we dont even tax food. Still plenty of money for the big expensive proggy BS they do in Seattle, so not sure what the big deal is...

 

Say something stupid? What are you talking about? -- the congressman's writing it up as a bill.

Do your homework.

 

Given that the poor spend almost all of their disposable income on needs and wants, and the rich spend a lot lot less as a proportion of their income on needs and wants, the practical result will be the poor are taxed more and the rich less, a lot less. It's about the same result as having a flat tax would.

No, that's not just, and is precisely why it's a bad idea.

 

I agree this sounds quite over the top. Besides sales taxes are harder to collect than income taxes and it would require a fairly large ISRS (Internal Sales Revenue Service). Flat tax makes more sense, though I prefer a simple graduated tax.

 

The rich will be taxed just as much. The rich still need the same necessities that the poor needs. Sure their percentage of income effected will be less. But their overall taxes won’t be any less and likely a lot more. Look at businesses that have years they pay almost zero or zero in taxes. They will no longer be getting away with that because the goods they use to make a product will be taxed as well, and business that pay to have their shelves stocked will also be taxed. I believe you would see the rich pay more when it comes to the businesses they operate.

 

ONE congressman.

 

Are you accounting for the pre-bate that would go to every member of the household?


I the federal government was withholding right at 28% of my paycheck, my TOTAL paycheck, each month when I was working. I would have all that money under the Fair Tax. I don't spend all my money on new retail sales items that would be subject to the NST each month. Maybe 60%. So only 60% of my income would be subject to the 30% tax at the counter AND I would be getting the prebate.

It won't pass because people don't know how it works and the MSM is NOT going to educate them on it preferring they believe that instead of paying 10% in taxes to the federal government they will be paying 30% of all their income!!!!!!

Sure there would be some sticker shock but then there would also be paycheck shock. The person in the store would see 30% added to the bill but instead of walking into the store with only $720 in your pocket you walk in with the $1000 in your pocket. And then get the prebate at the first of the month.

 

Why would it be harder than having to have everyone report their income, business report their income the IRS keep up with it and people avoiding it? We already have the mechanism in place as all states and cities and towns collect sales taxes, you just piggy back on it.

With the flat tax you still have to deal with what is taxable income especially to a business or a person whose business is a pass through. The vast majority in the country already pay a "flat tax" as they take the standard deduction just as they would take the deduction with a flat tax but it still takes a huge IRS to collect it and have them in our business at all.

 

He likes to waste his time like those of us who spend time on this forum.

 

It is my understanding that business would only pay tax on the items it buys at retail, but not raw material items that are components of their products. That is why new cars, for instance, wouldn't be more expensive at retail when tax is paid.

 

While 30% is steep, you’d be working with a much larger paycheck because your employer wouldn’t have withheld any federal tax.

 

It’s my understanding that anything sold has a tax. That’s including raw materials

 

Only new retail items are taxed when they are sold to the end user, I believe. That is the main difference between the FairTax and a European style VAT.

 

Equally miraculous was that this same time period just happened to coincide with the LW magically becoming deficit hawks, where even $2 billion for the wall was a catastrophic amount that needed to be debated for months on end. Prior to that, $2 billion was a paltry sum that could be cavalierly thrown at studying the mating habits of the highly reclusive and little-known Sierra-Nevada Mountain Horsefly.

 

Ahhh, that's where your logic fails.

Democrats believe that a just tax is according to ability to pay. A poor person should pay little or no tax, as a percentage of income, and a super rich person should pay a much larger tax as a percentage of income, (he or she will still left with many many millions).


A sales tax will raise taxes on the poor and lower it substantially on the rich.

How so? Because, the expenditures, as a percentage of income, will result in taxes being raised on the poor and lowered on the rich (compared to their current tax schedules).

Your logic is closer to flat tax thinking, which isn't just.

Why?

10% of a poor person's income is all of his disposable income, if he has any at all.

10% of a rich man's income, he hardly feels it.

Democrats believe that those who profit from the system the most, should pay the most.

Republicans try to frame the argument into a 'reward/punishment' argument.

Democrats try to frame it as a 'those who benefit from the system the most, should pay the most' argument.

This idea that someone who makes $900,000,000 a year if taxed, say, $400,000,000 is 'disincentivized' is nonsense.

But that is the argument the right makes. Dems disagree, adamantly.

Reward/punishment economic thinking makes sense for a business, but not for a nation because we are dealing with greater extremes for which the anecdotal examples do not work.

 

I said it before that it was stupid of the Dems to fight Trump's wall. They should have let him build it for everyone to see that it didn't solve the immigration issue. Now, of course it is curious why Trump didn't manage to build it, even having a compliant Congress for the first two years. Oh, maybe tax cuts for the rich had priority? BTW: The wall didn't cost $2 billion, the projected cost was $12 to 40 billion, and that was probably a vast underestimate (as usual when the GOP wants to "sell" the cost of their proposals).

In any case, I am amazed that you fall for this "2 billion for Sierra-Nevada Mountain Horsefly" research claptrap. The whole NSF, which funds most of the federal non-health related research had only a budget of $7.5 billion in 2017. Do you think they'd spend 1/4 of it on horsefly research? I didn't expect that from you, because you are usually a more reasonable poster, but it seems you were listening to Sarah Palin's rant about money for - gasp - fruit fly research. Little did she know that fruit flies (Drosophila) are THE workhorse for non-human genetics research.

 

To further back up my point you may be interested in this read.

https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=10862

it would be nice to have a tax free 401k

 

According to the article I posted earlier this is quoted in it.