20% retail VAT tax to replace ALL income taxes

Discussion in 'Politics' started by ihopehefails, Feb 25, 2010.

  1. ihopehefails
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    What do you think of a 20% retail VAT tax to replace ALL income taxes?
     
  2. Dr.Traveler
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    It means that the poor would end up paying 20% of their income, while the rich would pay far far less as a percentage of income. It also encourages hoarding money and creating a "landed" perpetually wealthy class.

    I'd be in favor of an across the board flat tax if there were absolutely zero exemptions: Namely for every single dollar that crosses your palm, regardless of source, you pay 20% no matter who you are.

    Otherwise our system is about as good as you get. Sad, but unfortunately true.
     
  3. Skull Pilot
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    Skull Pilot Platinum Member

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    Not necessarily. I know the Fair tax proposal has a prebate built in

     
  4. ihopehefails
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    Its a VAT tax that the retailer pays and what is wrong with having a wealthy class?
     
  5. Dr.Traveler
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    That is always passed on to the consumer, either in higher prices or in lowered wages for the workers. VAT's aren't just ate by the company.
     
  6. ihopehefails
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    How is that different from all other taxes businesses pay?
     
  7. Dr.Traveler
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    I'll have to look more at it. You'd have to put the prebate pretty high to offset the fact a family at or below poverty level will pay out their whole income in a year.

    I guess in theory it could work, though the details need fleshing out.
     
  8. theDoctorisIn
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    theDoctorisIn Senior Mod Staff Member Senior USMB Moderator

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    There's nothing wrong with a wealthy class. There is something wrong with a system that is designed keep the wealthy wealthy, and the poor poor.
     
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  9. ihopehefails
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    Don't you think a progressive income tax or any income tax for that matter keeps the poor poor considering when that person does acquire more wealth it is taxed away from them?
     
  10. Skull Pilot
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    If the VAT is truly a sales tax then businesses do not actually pay the tax.

    They collect it for the government then send it in monthly.

    For example, we buy many things for resale and we have a state sales tax permit that exempts us from having to pay the tax on those items we resell. We add the state sales tax at the time of sale then file a monthly report and send that tax money to the state dept of revenue.

    We do pay the state sales tax on items we buy to use like paper towels, cleaning products etc.
     

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