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I agree with you a flat tax would be a step in the right direction, but a simple sales tax would be even better.

http://fairtax.org/ is a group trying to get a national sales tax enacted.

Brian

Actually the fairest tax is a national retail sales tax as proposed at fairtax.org The bill has already been introduced in Congress to do it, but special interests are opposed to it.

Fairtax

If you're opposed to it, then you probably didn't read about it.

Your assertion was that Bush is paying no attention to domestic issues, not that you disagreed with his stance on domestic issues. But anyway....

His plan is just an excuse to give more money to investment houses...

I don't see a problem with encouraging investment. In particular, I'm hoping that the administration picks up on the idea of replacing the federal income tax with a federal sales tax.

Additionally, I'm personally in favor of a plan that eliminates the Ponzi-esque "pay-as-you-go" feature of Social Security. Doesn't have to be Bush's plan, either, as long as the solvency of SS doesn't depend on population trends.

If we had a flat tax or got rid of deductions, then the need to file would be almost nonexistent.

The same would be true if we replaced our horrible income tax scheme with a federal sales tax.

You're asking the wrong question. Better questions are: Why do you have to file tax returns at all? Why is our tax system so complicated? Why does it cost so much to comply tax code and regulations?

Last year I spent hours crunching through my taxes using turbo tax. I tried really hard to get it all right, but in the end, I'm not honestly 100% sure that I did. Well I think the answer is here at fairtax.org. Basically it all comes down to 3 words "National Sales Tax". Then the linux software problem goes away

That is what I'll be doing this year but I hope to god that next year we can start something new and not have to worry about this any more.

Support Fair Tax, a National Retail Sales tax (30% on new purchases). It replaces your fed income, social security, medi*, and estate taxes. It even has a rebate for your taxes up to the poverty line folks, it makes sense, put H&R block and the IRS out of business forever.

Our tax system is out of date, try
http://fairtax.org/

Now, to reduce the regressive nature of the sales tax, were it me, I would eliminate *all* sales taxes on life-necessities: food, any health/medical supplies (including prescriptions), and possibly housing (but not land; the property tax should definitely stay, so as to prevent people from hoarding land).

The FairTax has no exemptions, but provides a universal rebate to cover the costs of all purchases up to roughly the poverty level, so poor people pay zero or negative taxes. I like this better than exempting "necessities", because it avoids rent-seeking lobbyists trying to get their products on the list.

You know, a national sales tax ought to appeal to the leftie anti-consumerist, anti-materialist mentality which says that "Americans consume too much! Ach, it makes me sick that all people do is buy stuff! Waaahh!" Funny that they've been silent on the issue.

Indeed. They're also oddly silent on the regressive payroll tax, because they have to maintain the fiction that Social Security is a retirement program and not a Ponzi scheme.

First of all, I like the idea of http://fairtax.org/, but here's a very simplified idea that follows the same logic.

Whether we keep or get rid of income taxes, it doesn't matter for this idea...

Fix it so 30% of the total federal tax revenue is redistributed. If this means raising taxes, so bet it. If this means cutting wasteful spending, so be it. But with spending over a half trillion per year on "defense", I'm sure we could cut a big part of that, although some would disagree.

Semi-free college education at the least. Do something like this...

In exchange for a free college education, the person would pledge 5% of their income for 20 years to help pay for this. So not only would someone be contributing to the regular tax system by having a better job, but they'd be putting 5% of their income into this system. 5% of $0 is $0, so if you don't earn a dime in a given year, no big deal. And it's over after 20 years, hopefully by age 42 or so.

Personally, I think we should get rid of the IRS and get rid of property taxes, and simply go on a consumption/sales tax system, provided that the rebates are kept.

The 30% thing I mentioned earlier, let's play around with it. If current federal income taxes results in $2000 billion, 30% of that would be $600 billion. We could cut a large chunk out of the DoD, and modify some tax brackets too.
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Now we got $600 billion among nearly 300 million citizens. That's $2000 per person, but we don't want people having babies just to get the money. Solution: Limiting it to just adults would result in about $2666 per person, if there are 225 million adults. Or maybe just limiting it to anyone who is age 5 and up, which is kind of like anyone who is school age.
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If a college tuition is $4k per year, this could very well help. This could help seniors too. And those who are homeless on the street who get $0 now, this would surely help.

This is one of the major reasons behind Fairtax

Talk how you will, it'll eliminate the "tax advantage" to outsourcing jobs.

Reducing the regulatory expenses to opening/operating a business would help too. I'm not talking about eliminating OSHA, but there are lots of spots that governmental interferance increases the cost of doing business.

if the government converted to a flat tax, but exempted some of the consumption (say, vouchers that would exempt $1000/year in transportation and food costs, or the first $2000 in housing) would you call that system more or less fair than a straight consumption tax? I would side with more fair, since there is a certain minimum level of consumption that needs to be done in order to survive. I don't believe that necessities ought to be taxed . . .

I'm saying that the poor generally spend all their money on necessities, and even have to forego things that people even a little better off would consider necessities.

A senior citizen would be getting a net gain with something like http://fairtax.org/.

Our tax system neds more than reforation or simplification.... It needs to be tossed out completely and replaced by the Fair Tax (Americans for Fair Taxation). The fair tax would eliminate all payroll taxes and replace them with a national retail sales tax (a.k.a. a consumption tax). Advocates say that with the Fair Tax, companies will move jobs and manufacturing back to the US. I like the idea of taxing the vast underground economy which would occur every time a participant makes a purchase.

You mean like http://fairtax.org/? That would solve a lot of problems, and hopefully end all issues of outsourcing too.

"...a national sales tax..." - Ok, now I'll finally vote against W. I shed the tears of a clown.

I know it's off topic, but I'm curious about what you have against a national sales tax? The currently favored "tax replacement" legislation is H.R. 25, otherwise known as the FairTax. It's actually quite interesting once you get to know more about it. Basically the current income tax and all of its burdens and loopholes would go away in favor of a flat national sales tax.

Moderators feel free to reign destruction upon this post if you feel it necessary.

And now back to your regularly scheduled discussion of galactic happenings...

Well, most libertarians support the Fair tax plan: http://fairtax.org/.

And, obviously by the tone in your post you don't seem to believe in the statement "That government is best which governs least." If you want the Federal Imperal Goverment to rule over everything in your life, fine. Move to a Socialist nation, or a communist one if that suits your fancy. But the government of the US is supposed to be a constitutional republic, not a repbulican ran theocracy nor a liberal democratic socialist regime.

I'm surprised no one mentioned http://fairtax.org/ as far as I can see. It works via consumption tax, and stamps out poverty with giving everyone rebates regardless of income. So those who are below the poverty level may end up with a net income.

Only because those goods and services didn't go down in price...

In other words, many estimates about the fair tax system show prices, after taxes, being about the same as they were before because the "hidden" taxes are removed.

Combine that with taking home 100% of your paycheck, and you give lower classes a lot more buying power. In fact, people below the poverty level would actually be getting rebates for taxes they never paid - in other words, income redistribution that the left craves so much.

Please at least read the fair tax proposal (at FairTax.org) before making up stuff about it... it's not "just another national sales tax" idea, it's a complete solution that's been well thought out.

Why is there no question about this? Specifically, I'd like to hear what the canidates have to say about the Fair Tax proposal http://www.fairtax.org/.

First off, I agree with you about the economic distorting affects of the income tax. Have you researched the Fair Tax?

But the EPI contention doesn't hold water when exposed to simple standard of living facts reported by the census bureau.

The basic problem is that EPI is focused on dollar amounts and not standard of living. Surely it's crazy to say that since many Americans own multiple TVs in 2004 and didn't in the 60s, that a family is somehow more poor now because they can only afford one TV vs. if they could only afford one TV in the 60s.

As the nation as a whole gets wealthier in material terms, trying to say that someone is poorer relative to the rest of the country, rather then richer relative to how someone at that income level used to live is ridiculous.

You do realize that relative to much of the rest of the world, most "poor" Americans are among the super wealthy, right? The term ends up being all relative to what you are comparing to.

A comparison of the same "poor" people in the U.S over time leads to the conclusion that they are getting richer, not poorer, regardless of how many less tvs and cars they have than other people who are also getting richer.

Gawd I hope your joking! Personally, I think Teddy Roosevelt was the best president.. and as for income taxation, I'd prefer the http://www.fairtax.org/ plan to anything else I have seen proposed.

What does god have to do with this?

What do you think about a tax system based on sales/consumption tax like what's mentioned on Fair Tax Plan? It would help fight poverty.

I think they are both using a bit of fear. However, it is true. These people are bent on killing as many American's as possible, anywhere, by any means they possibly can.

I have lived abroad and been hated because of my nationality, and no other reason. I understand that these people have no respect for life or anyone elses right to even exist.

So call if fear mongering if you will. If you want to live in fear go ahead. I understand the threat but don't live in fear. Being afraid of a threat only makes the threatener more powerfull and you weaker because in your head they have won.

Also, it has nothing to do with nothing to hide. Those who use this justification are ignorant. I, personally, have nothing to hide, but still don't want the goverment to have unihibited access to my private information, travel habits, or anything else for that matter. This is one reason I support the Fair Tax http://fairtax.org/ plan put forward by John Linder of Georgia. This would eliminate that huge bureaucracy called the IRS. I would no longer have to tell the Feds where I live, work, how much I make, or how much I donate to Charity/Church groups.

I agree that the grab of all this personal information does little to nothing to fight terrorism.

But what neo-conservatives seem to conveniently forget is that the tax rate isn't a flat percentage. With capital gains tax breaks, estate tax roll backs, offshore investment breaks, etc., a rich person with a good accountant will pay significantly less by percentage than a middle-class person who takes the standard deductions.

How can your assertion regarding tax distribution possibly be true in light of reports such as this? The top 10% of earners earn 40.1% of the money, but pay 66.4% of the income taxes. While the rates aren't in lock-step with the marginal tax rates, they certainly aren't paying "significantly less by percentage".

So before you go throwing labels about (which you accused me of doing with class warfare, although we both know that upper-class and middle-class are non-partisan terms widely used to describe income levels in very general terms)

Don't put words in my mouth - I never said that. I am a strong believer in capitalism and a free market economy. However, I'm also a strong believer in a flat tax with no loopholes - which is not where our current system lies.

I'm in agreement with you that much of our tax policy is so messy because of the loopholes, favoritism, and demagoguery that surround it. My personal preference is the Fair Tax, since it simplifies the system dramatically and eliminates exceptions. Further, it removes the tax burden from the poor while still providing incentive to save, invest, and otherwise improve your financial situation. It also eliminates the offshore loopholes you describe, since it is not based on accountant-manipulated reported income, but on actual purchases that are much harder to manipulate.

Uhm, no.

If you went to that website and actually read about their proposal which is different from the typical consumption tax proposals you'd know your example is flawed. Their plan includes a refund at the end of the year for the equivalent of what is needed to stay at the "poverty line", which means Household A will get a refund at the end of the year which will offset much of the "incompressible" spending which was necessary.

P.S. Evasion will be a little difficult, since its the business that is selling you its product that collects the tax from you and passes it on. There are no income taxes, and therefore no IRS and no lawyers in this plan, since the plan has no exceptions or exemptions in it (although granted there will be politicians who'll try to add those things).

The problem with your progressive tax is expressed fairly well by Reteo Varala. It's exactly what the powers that be want in order for them to be more dependent on the government.

A better tax idea would be the Fair Tax plan. The idea is to abolish all forms of taxes except one, the retail sales tax. And by all taxes, I do mean all. No income taxes, no business to business taxes, none. Just a sales tax on items you purchase.

This allows our businesses to thrive and removes the "rich vs. poor" in taxation that the political hacks use to promote class discriminations.

You can find out more about this here. www.fairtax.org Good reading :)

Note that I do not support this tax relief system for corporations (I think it sucks in a monumental way) so no corporate greed monger flames are needed.

So you honestly believe that corporations pay taxes?

Taxes on businesses are just indirect taxes on regular people. Businesses necessarily pass these expenses on to consumers (higher prices on goods), investors (less money for dividends), and employees (less money to hire new employees or pay existing employees better wages).

This is just one reason why I support the FairTax.

So then you'd support the Fair Tax?

The point you are trying to make here is completely lost on me other than I assume you are trying to slam Linux and troll using Microsoft and SCO. Didn't work. Your statement is just bait still dangling on a forlorn hook.

With prices as high as they are you would think they would at least stop filling the reserve until after the election.

Yeah, how dare they put national security above political expediency?

A key reason jobs do better under Democrats is a simple fact. Republicans care first and foremost about profits and wealth accumulation for the wealthiest few percent

I see you and Michael Moore share the same definition of "fact".

Free trade, container shipping, cheap telecommunications was a god send to the Republicans because now corporations can tap cheap, disciplined, labor in China and India, and can grow without the annoyance of high costs and increasingly poor labor quality in the U.S. ever again.

Yes please, save me from the tyranny of Walmart's low prices. I also understand there's this product called "Linux", created largely with foreign labor, that's cutting into the profits of real American companies like Microsoft and SCO.

The corporate share of the tax burden is down to %9, an historic low. Its a myth U.S. corporations face a huge tax burden.

Actually it's 0%. Corporations don't pay taxes, they collect them. When you tax a corporation, it must raise prices, lower profits, cut wages, or some combination thereof. A tax on corporations is really a tax on its customers, shareholders, and employees.

Meanwhile payroll taxes, which hit the low and middle income people, are still at record highs

Finally something we can agree on. But isn't it funny how the left howls in protest every time conservatives make an attempt to reform Social Security? The FairTax, for example, abolishes all income and payroll taxes, replacing them with a retail sales tax, and it's progressive because everyone gets a fixed monthly rebate. I don't see Democrats lining up to support it though.

They control the size of the Federal Budget and deficit.

Not really. Most government spending is on entitlements where spending levels increase automatically. True, they could change the structure of the entitlements, and in many cases I wish they would, but doing so has huge political costs since the demagogues on your side will claim they want old people to starve to death.

Iraq is kind of this, excepting we are wasting far more resource on it than we will ever get back.

Sort of true, except that the Iraq war wasn't intended to show a profit. If we wanted their oil, all we had to do was buy it (like France); that's far cheaper than paying to blow stuff up and paying again to rebuild it.

Here is an interesting interview with Noam Chomsky.

And I could point you to several scholarly works by Ann Coulter which prove that liberals are liars, traitors, and smell bad, but quoting lunatics on either side isn't productive.

Yes, we should! See http://www.fairtax.org/

Yup.

Plus, when the person hiring me says "We're willing to pay you $70,000 per year" I don't want to have to go "OK, let's see, 70k*.65 = ~45k per year after taxes". With a flat tax, what you agreed to work for you ACTUALLY get. Then _I_ can determine where to spend my tax money. I like that idea.

Fortunately, there's a movement to completely throw the whole federal income tax code out and replace it with a national sales tax.

The whole issue of taxing "Custom Software" makes the assumption that it is untaxed. It is quite taxed so long as it is made in the USA. The Labor of the Employees makes it's cost nearly 70% tax.

The whole issue on a duty on software from anywhere else has to do with the disparity of the tax situations. To be most brief the Citizens of the USA are consigned by Congress to pay pretty high taxes. The purposes for these taxes include care of the elderly, national armed forces, various national purposes, and of course the US National Debt.

The load for retirement in the USA will approach 30% of gross payrolls in just 17 years. To allow Americans to carry all of these burdens and then to compel them to live in the "World Market" is national suicide. This will compel the workers to face ruin or to abandon the support of the various US National efforts and costs.

The concept that the USA should have to compete head to head even inside their own market against this situation forms a "Classic Trade War" against US Citizens by their own government. Essentially all players here should have to pay here. In addition mechanisms (WTO has prevented these) need to be developed to allow the Americans to lower their taxation for export markets so that they can trade world wide.

If a tax on imports is NOT imposed the only solution here is to remove the INCOME TAXES entirely and replace them with a National Sales Tax. Check out the Fair tax This allows much of this to be achieved.

A more fair tax system would help drive down the cost of doing business in the USA so that there would be less incentive to outsource overseas. I admit to not having run the numbers, but I wouldn't be surprised if that tax advantage worked out to more than the wage difference. In biotech, it would also help if government would stop playing its senseless morality games for votes (stem cells, cloning).

About a hundred U.S. Reps have already signed on. Might be a good time...

About a hundred U.S. Reps have already signed on. Might be a good time...

1. gets rid of the IRS
2. no more filing taxes
3. get a monthly check for basic necessities
4. encourages saving

fairtax.org

so long as people insist that #5 will never happen, it won't, we need people to believe in it, and insist on it, or else nobody will ever take it seriously. if everyone bitches enough and insists on the fair tax then maybe some day something will be done about it.

FairTax.org

You are right... taxes can only be justified when used for related required government spending.

Case in point: gasoline taxes should ONLY be used on transportation infrastructure. Tax on tobacco and alcohol should only be used on healthcare.

Property taxes? Police, Fire, Military.

You want to make rich people pay their "fair" share? How about the Fair Tax? First, it IS a progressive tax, and second - to all those wealthy people with no income (the ones the left wingers complain about "winning life's lottery") still need to buy things. It encourages savings (income tax does not, except with a bunch of laws about retirement savings which further complicate income taxes), and seems like a win/win form of taxation for everybody.

I do not believe in MORE taxes because time and time again has shown it to be detrimental to the economy. JFK cut taxes, and the economy improved. Reagan cut taxes, and the economy improved. G.W.Bush cut taxes, and the economy is improving.

In fact, the latest deficit estimates went down because goverment revenues went up after Bush cut taxes. A strong ecomony is ultimately going to be the best way to eliminate the national debt.

To address your point number 2, though: Fair Tax is the way to go. It IS a form of progressive taxation without any paperwork, eliminating the huge amount of money required by the government to enforce and process income taxes, and the huge amount of money we spend every year complying (i.e. filling out forms, either our own time or paying accountants).

He didn't say he didn't complain (or vote for people to lower taxes), just that as long as that's what he's being assessed, he pays it.

I feel the same way. I want lower taxes. In fact, I want NO income tax at all. We didn't need it for almost 150 years, what was the justification for it again? A war that ended HOW LONG AGO?

I believe in the Fair Tax, but moreover, I believe programs should be self-sponsering.

For example, taxes collected from gasoline should exclusively go to transportation infrastructure.

Taxes collected from property should exclusively be used for the protection of that property (Police, Fire, Military).

Yet, with all the outrageous spending the government does, I still realize the government needs money to operate, and that I am the beneficiary of much government spending (and we all are), even if it doesn't work out exactly.

There actually is a national sales tax initiative, but not to eliminate state sales taxes -- to eliminate the national income tax.

Radically reforming the US tax code.

Thanks for the informative reply.

I actually remember reading that sales taxes are generally more stable compared to income taxes. I think it's because consumption is not as directly related to business cycles as wages are, which isn't to say they aren't affected by them. I would like to see some proof of that from an economist though.

On my libertarian side, I've actually seen support for sales taxes in some instances. For example, the Americans for Fair Tax call for a nationwide sales tax of over 20%, but then a revocation of federal income taxes and a number of corporate taxes. Their reasoning is basically this: 1) it's more stable as already mentioned, 2) does not tax savings (remember, any saving you do now is post-tax), and there are more reasons, but it's been a while since I've really read their position.

The crux of their argument though, is that 1) the Federal government still gets the same amount of money, 2) corporations will invest heavily in the US (the EU already considers us a tax-haven, no joke. Imagine how many companies would relocate here.), and 3) you get a rebate up to the federally defined poverty line. This last one is the most important in my opinion because that's really the worst aspect of sales taxes--regression.

Unfortunately, I don't think it will ever even get a serious discussion. I think the public would react badly to 20%+. But then again, they don't realize that they lose the same amount anyway.

TSage

Absolutely, agreed with ya there.

I have the same philosophy with taxes. I would prefer the government getting out of a lot of businesses and greatly reducing our taxes, but if I can't have that, I'd at least like to replace the income tax with something like the FairTax.