This is not a current tax, or one that is planned, this is my own idea. (United States)
I am just curious if you would favor a 5% national sales tax if the money from that tax went back to the people, in the form of bi-annual stimulus.
1% of the tax would go to the people. That tax would be split into age groups in multiples of 10
most likely with the youngest Americans and the oldest Americans getting a majority of the tax.
This money would go to every citizen. Which would give people who have no income, bi annual income. And, those who don't need it extra money to spend.
It was also give families a huge boost in income as each of their children would receive their own check from birth until the age that they choose to collect as an adult. this would also give kids money to save for their futures and college.
The remaining 4 percent would be divided as follows
1.% to social programs, social security, education and welfare, and healthcare
1.% police departments, fire departments, and national emergencies
1. % Businesses, in the form of low interest business loans. No bailouts.
1% Military, veteran care, and to pay off the national debt.
An example of this is that US oil companies made 16 trillion dollars in profit in one year. Imagine what the people of this country could do with just 1 percent of that money. The buying power of american's would be tremendous if everyone had income. They would need to hire thousands of people just to keep up with the business.
The only exemption to this tax would be home loans and auto loans. I don't there is any sense in placing a tax on borrowed money.
The reason it won't work? Corporate america would have to pay workers more money, and they would be the first ones to shoot a tax like this down. Because American's desperation to have money would eventually wain and, non desperate people are not going to work full time for $5.00 an hour. The mass exit of corporate America to Mexico is proof of that.
Interesting idea and if I thought it would not be fought over for years, I could get behind it. But there might be a Constitutional issue based on unequal taxation, although you could argue that the ship has sailed on that issue because we have an income tax.
Charging everyone the same % is fine. But then funneling back is quite another. You would have to create new tax charts similar to what we have now for income taxes. Cries of discrimination based on age would be the first into courts.
We could change the corporate tax structure for the better and make up that money. Despite the profits, our corporations are at a disadvantage. Most Western nations have been lowering corporate tax rates, cutting tax breaks, and changing how they tax foreign profits. International companies based in the U.S., get taxed almost 40% on profits. Because of that, they keep their foreign profits abroad. The United States is different from most other developed countries in the way it handles foreign profits.
I'm not excusing crappy behavior by these multinationals. But if we can take one excuse away for moving their operations, it might put a little more pressure on them.
U.S. tax is only levied if and when profits are repatriated to the United States. As a consequence, American corporations keep most of their foreign profits overseas, which is probably over a $1 trillion. Combined this system with cheap labor, and you have companies moving HQs and operations overseas. So we could make up a lot of that $$ by changing the corporate tax and it might save jobs in the future. There would be an incentive to bring $$ back into the country.
The plan sounds like little more than a share the wealth plan to take from one group to give to another. We already have nearly half the country living off the other half - we do not need to expand that.
Better, seems to me, to cut taxes rather than increase them. To simply decide that business profits should be taken from the owners and given to someone else, or used to increase already bloated programs, is counter-productive.
Nor do I see it as useful in paying off national debt; until we decide that we can't afford all we want, politicians will just go right on borrowing from our future in the on going effort to buy votes.
To replace the current tax code a goods and services tax would need to be more like 12% with none of it being remitted. Which I would support as those who buy more would pay more, which seems proportional and reasonable.
Hello again psycheskinner,
I also thought a national sales tax was a good idea when I heard of it. But after looking at the details of what it would be, and the history of Britain's VAT efforts, I am not so sure.
Regarding the needed rate, I have seen serious arguments that expose 23% as the necessary number. Then, politically speaking, I looked at Britain's VAT, (comparable to a national sales tax), history - it is more complicated than this simple explanation, but what started as a 10% VAT is now 20%, and it seems their politicians are trying to increase it again.
So my support of a simple national sales tax has wavered. Another approach, 'The Fair Tax' as proposed by Congressman Linder and radio host Neil Bortz looked good as an alternative. But after a deeper look, it too has more issues than benefits - by my understanding.
It is hard to argue that a nation sales tax, ( VAT tax), truly is a regressive tax, no matter how fair it seems at first glance.
In answer to your comment psycheskinner. I would not replace the current tax codes. I am talking about a national sales tax, not a changed tax. As we don't not currently have a national sales tax, no changes would have to be made to the current tax laws. However, with more tax income coming in, the individual states my be able to reduce taxes. such as property taxes and school taxes with the extra income they would be getting for education, police and fire departments.
And, in your comment wilderness. We already have state sales taxes, and, that money does nothing but go to bail out big business. State sales tax money and lottery money that was supposed to go to the schools was used to give GM, and other companies in Michigan bailouts, and tax breaks, when those companies where making profits in the billions. So what would be different about what I am proposing? I think the difference is that people in every state would benefit from their share of a national sales tax.
Everyone would benefit from the tax I am suggesting, as every person including infants would get their share of the tax I propose. So, it's actually taking from a percentage of people who have buying power, and sharing just 1 percent of that buying power with everyone. And, the people who are spending that money would get money back. So I don't see the problem.
One interesting comment posted by Lions, was people claiming age discrimination. That was one thing I had not thought of. I think the people would benefit most would be people with children. The reason I proposed ages in increments of 10% to certain age groups, is because it would be far too complicated to pay a percentage based on every citizen. But, I do see your point. Even though a person would have to be pretty petty to complain about getting free money.
Another benefit of a national sales tax, would be people visiting from other countries and spending their money here. As people from those countries would not get a share of the tax income. that could amount to millions of extra dollars every year.
No, Brimincandy, you do not propose that "everyone" benefit from the new, added tax. Only the poor, that already benefit far beyond their "fair" share would benefit at all, for none of it would go to more police, or more military. On the contrary it will go to expanded charity and to buy more votes for the politicians handing it out. It is nothing but another share the wealth plan, nothing more.
Nor is it reasonable to ask foreign visitors provide the money we want to give away - this method of taxing those that will never benefit is odious in the extreme and we already do far too much of it.
Almost all economists agree that sales taxes are regressive taxes, so I don't know why anyone in lower income brackets would argue for any kind of sales tax at all, regardless of where the money would theoretically go. The Institute on Taxation and Economic Policy is considered to be slightly left leaning, but they have a very good paper worth reading http://www.itep.org/pdf/whopaysreport.pdf
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