Re: Re: Flat tax vs. national sales tax

On Fri, 22 Jul 2005 16:07:18 -0700, m pautz
<mpautzgarbage@xxxxxxxxxxxxx> wrote:

>Steve Dufour wrote:
>
>> The Washington Times
>>
>> http://www.washingtontimes.com
>>
>> Flat tax vs. national sales tax
>>
>> By Steve Forbes
>> Published July 22, 2005
>> Part three of an exclusive three-part series of excerpts.
>>
>> The flat tax is not the only solution that has been proposed to
>> address the problem of our monstrous federal income tax code. Another
>> proposal under discussion is the national retail sales tax (NRST). The
>> NRST would be a consumption tax levied at the national level. One
>> variation that has gained a lot of support in Congress is a 30 percent
>> tax on most consumer purchases of goods and services.
>> The flat tax is a better idea than the NRST for a multiplicity of
>> reasons we will get to shortly. But it should be stressed that
>> supporters of a sales tax have their hearts in the right place - they
>> rightfully believe that what we have today is an abomination, that we
>> are overtaxed and that we are all subject to abuse from the IRS. A
>> sales tax would be infinitely preferable to the current monstrosity. I
>> believe, though, the flat tax is preferable, not least because it could
>> more easily, readily be enacted than a national sales tax: Before a
>> sales tax is put in place, we must first repeal the Sixteenth Amendment
>> to the Constitution, which allows Washington to impose the income tax.
>> Otherwise we will end up with the situation that exists in most states
>> - and indeed in most other countries - and that is both an income
>> tax and a sales tax (or in other countries the Value Added Tax).
>> First, a little background.
>> The national retail sales tax is intended to replace personal and
>> corporate income taxes as well as payroll taxes, capital gains levies,
>> and estate and gift taxes. It would be collected on the sale of new
>> goods and services and exempt from all transactions of used items.
>> Business-to-business purchases would also be exempt from taxation.
>> Potential snags are immediately obvious: What is the definition of new?
>> What constitutes a business? Let's say you sell stuff on eBay; one can
>> imagine people justifying a sales-tax exemption on a slew of items that
>> may or may not really qualify.
>> The national sales tax plan calls for a refund from Washington for
>> all taxpayers. This refund would be issued each month to offset the tax
>> levied on necessities such as food, clothing, and shelter.
>> The official poverty level for a family of four is $18,850; the
>> rebate - if this family included a married couple - would be $479 a
>> month or $5,745 a year (see below).
>> Advocates of the plan say that it would be a progressive tax
>> because it is based on how much a person actually spent. On the
>> surface, a sales tax can look appealing. It employs some of the same
>> principles that make the flat tax work. It does not create unnecessary
>> and distorted incentives for certain segments of the economy. It treats
>> savings and investment neutrally.
>> But, alas, the concept presents numerous challenges: A national
>> retail sales tax will raise the price of many goods and services. The
>> price of non-exempt goods and services purchased at retail would
>> increase 30 percent. Partisans reply that such hikes would be overcome
>> by people having higher take-home pay - no more deductions for
>> incomes taxes or FICA taxes. They also insist that the sales tax would
>> sufficiently lower the cost of most goods and services over the long
>> term, so that the 30 percent surcharge would not be noticeable.
>> According to their reasoning, companies no longer liable for income
>> and federal payroll taxes would have lower costs and could charge less.
>> So they say, the sales tax would not mean massive price increases.
>> Really? We have to admit we're skeptical. Have you ever heard of a tax
>> - one that's, in effect, a surcharge - making a product less
>> expensive? Even if sales tax advocates are right, such adjustments take
>> time. Many people may find it hard to believe that employers will raise
>> employee salaries after being freed from having to pay payroll taxes.
>> Competition may make some of it happen. But in the meantime, most
>> people won't believe such a thing will come to pass.
>> People may also express a similar uncertainty about some features
>> of the flat tax, such as how it will enable taxpayers to come out ahead
>> after losing various deductions. But the difference is that, under that
>> plan, people will have a choice: stick with the old system or try the
>> new.
>> Choice is not an option under a national sales tax system.
>>
>>
>>
>> Steve Forbes is the author of "Flat Tax Revolution." The excerpts
>> are from that book.
>>
>
>They tried the flat tax rate in 1986. I don't know how old you are, but
>it turned into a fiasco. After gutting deductions, the tax rate wasn't
>going to be a flat 10% as proposed, so people started bitching. It
>wasn't fair to pay so much, "especially when the rich can afford to pay
>more".

SO FUCKING WHAT! WHY is it "wrong" or "unfair" that the "rich" (a
moving target demographic anyway) to pay the same rate or even amount
of taxes as anyone else SIMPLY because they CAN afford more? Are you
a communist masquerading as a rational being?

>So the flat rate then became a progressive tiered rate.

Of course the flat tax suffers from a morally fatal flaw:

I T I S S T I L L A T A X B A S E D O N I N C O M E !

ANY kind of income or property tax (flat or otherwise) allows
government a justification for having direct knowledge of how much you
earn or own. History has proven thousands of times that ANY
government simply cannot be trusted with that kind of knowledge about
harmless, private individuals.

>I am in favor of the FairTax.org proposal, but I don't feel that it will
>ever happen.

That's what they said about the Berlin wall for 40 years.

>It is what our founding father's proposed because a
>consumption tax would have a built in mechanism against excessive
>taxation. Read Hamilton in The Federalist Papers #21.
>
>"It is a signal advantage of taxes on articles of consumption, that they
>contain in their own nature a security against excess. ... If duties
>are too high, they lessen the consumption; the collection is eluded; and
>the product to the treasury is not so great as when they are confined
>within proper and moderate bounds. "
>
>Now, I have another proposal. When the Income Tax was implemented, it
>was presumed that only a few percent of the top earners would pay taxes.
> Because of abuse, over spending, and vote buying pork, over 50% are
>paying income taxes.
>
>What I propose is a two phased process. The first phase involve tax
>cuts. To get the votes of the masses, all cuts take people off of the
>bottom of the tax rolls. For example, every time I go to the Atlanta
>Symphony Orchestra, the Federal government pays for $48 of my ticket; a
>subsidy. We get rid of that first, I pay the full ticket price, and
>some poor guy who only pays $48 in income taxe no longer pays any income
>tax. We keep this up until only some small percentage are paying, say
>the top 15% of the people, the high earners.

So, you CLEARLY don't believe the "poor" should pay their fair share.
You really ARE a communist.

>The income RATE of those top 15% does NOT change. Since their income
>would change based on inflation, the spending available for the
>government would also go up with inflation, BUT NO MORE than that.
>
>
>Now for phase two: Since the income RATE of those top 15% does NOT
>change, any increase in spending above inflation would have to come from
>some place else. Any such spending increase is applied evenly, dollar
>for dollar, across that 85% that isn't paying any income tax. Before
>Congess can vote on a budget, they must publicly state the dollar figure
>that each and every person in that lower 85% will be paying.
>
>Since those 85% control the vote, if they want to pay for pork, then so
>be it. If not, their congressmen will have to answer to them.

Congress is infested with prima donnas who's NUMBER ONE priority is
job retention. They will never allow the public to have that kind of
power over them. If voting had any real power to control government
spending (over time) it would have been outlawed decades ago.
.

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