I have been thinking that changing the way we pay our taxes here in the US could be a good thing, and I just way to see what others think of the idea. That is paying our tax with a federal sales tax instead of the confusing, expensive system in place now. Many states have a sales tax and it seems to work well. It would put an end to a lot of "cheating" and would be equal across the board. If you spend a lot of money you will pay a lot of tax, spend very little and of course the opposite would be true. I don't know all the ramifications really, but I think it would be simple and fair.
It sounds like a better idea than what currently have, but keep in mind that it's not completely fool-proof. For instance, who would keep the paperwork? The retailer or the consumer? What if you had a resale certificate, but never re-sold the things you bought?
Personally, I'd hate to have to keep a list of all the things I'd bought all year, and then report it to the government.
You wouldn't have to keep track of everything the retailer would. Just like the sales tax we have in WA state and several other states as well. It would be very painless for us, the consumers (except for having to pay anyways.)The thing I would like about it is the fairness across the board.
I'm all for it! It should be coupled with a law that reqiures a balanced budget!
It's a good idea, but those with money and businesses with money will not let this happen. They will not accept losing their tax deductions and loop-holes. They have the money to Keep this from happening. And legislators are more than happy to accept the money spent on them for the votes of those they do protect(those with money) from higher taxes.
But, I wish it could be as you suggested.
It sounds good. But realistically, think of the impact it would have on the price of everything you buy. Especially because businesses would have to pay the sales tax as well, which is a price increase they would just pass along to the consumer.
Imagine: The company that builds air conditioners for your car would pay taxes on the material they buy and add the tax into the price of the unit. When Ford buys the A/C unit, they pay the taxes for the other company, and add what they pay in sales tax, to the price of the car they sell to you. So you, as the consumer will still be paying the sales tax for both companies, just in the form of a higher price.
The same string of events applies to anything from breakfast cereal to TV's to houses. And since the government will have to make it a fairly high sales tax to make up for the lack of income tax, you'd see a significant jump.
Try this as an idea. Everyone, individual and corporate, pays the same rate, say 15%. But with no deductions, no exemptions. No change for capital gains, no change for how many children you have. No loopholes and no exceptions. That would also eliminate a lot of the funny accounting that gets done to hide income.
Yes everything would cost more but you would keep all that you earn AND you get to decide how much tax you pay by how much you consume. Savings and investment would be exempt from taxes! There would actually be a reward for saving and investment and a penalty for consumption! Isn't that the way it should be?
Of course it wont happen because that is where the government gets its power, by manipulating the tax codes!
By the way, the IRS budget is over 10 billion a year! We would realize a significat savings in eliminating it!
It could be structured in a way that would make individual as well as corperate taxes remain about the same, just put the burden on those that are taking advantage of the existing tax laws.
I would have to agree though that those with the "big money" weld a lot of power and if they don't want it to happen...well it probably won't!
Yes to a federal sales tax provided it isn't another tax to add to all the rest.
Yes to simplifying the tax code - lock Congress and don't let anyone out until they can pass a tax code that's less than a 100 pages.
Yes to an increase in the gas tax to reduce dependence on foreign oil.
Yes this is unrealistic and not going to happen.
No, I don't even live in America. But it's a good discussion.
Best idea ever. For those that would like to learn more, you can go here http://www.fairtax.org
Edit: Ron beat me to it, go there anyway!
Sounds like a good idea to me.
Not much chance of getting anything like it here in the UK though - not progressive enough for most people here.
We do have VAT though - currently 15%, but not on food, children's clothes, rent and other "essentials". It's going back to 17.5% soon - and I think there's a good chance it will go higher next year - we need to do something to close the huge deficit that's built up.
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