Consumer Tax

Coloradomtnman

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Ever heard of it? It means Federal sales tax is all. What if we had that instead of income tax?

I heard about it on Fox News. Seems reasonable on the surface. What do you guys think? Educate me (and others who know little about this idea).

p.s. If you didn't know it, I'm a far left liberal.
 

code1211

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Ever heard of it? It means Federal sales tax is all. What if we had that instead of income tax?

I heard about it on Fox News. Seems reasonable on the surface. What do you guys think? Educate me (and others who know little about this idea).

p.s. If you didn't know it, I'm a far left liberal.


In the world of taxes, progressive means that those who have more, pay more. Regressive means that all pay equally. The rich and the poor all pay the same percent of their expenditures under this tax so it is the most regressive tax there is.

The argument goes that the rich buy more and what they buy is generally more expensive so they will pay more. A Lexus vs. a Corrolla.

One purpose of taxation through income is social engineering. Collecting taxes through purchases, if that tax is level across all products, eliminates this. Income taxes with credits for certain purchased items will incent the purchases of those items. A sales tax withdraws some of the governmental intrusion into our lives.

A sales tax also applies to all purchases so the under the counter transactions on income that avoid taxation will cease and the whole GDP will be taxed instead of just those who have incomes that exceed minimums.

A sales tax is the most small d democratic tax there is. As a result, the big d Democrat party would not like this.
 

RadiomanATL

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Exclude foodstuffs, used items, and give a credit to those earning less than the poverty line (bringing them up to the poverty line) and I'm all for it.
 
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It is something loved by Boortz and Fox. Best thing to do is to go to Boortz.com and research it.

It is not so much a sales tax as a consumption tax. And the goal here is to make it as little invasive as possible, and as positive as possible.

Sales taxes are by their nature regressive. The way most of them are designed, it is even more so. Sales taxes skip the places rich folks spend money, concentrate on where the poor spend theirs, and as economies move forward less and less of the economic activity is subject to the tax.

So the concept is, try and make a tax easy to collect, not regressive or progressive, and revenues increase as activity increases.

Boortz in on about how much of what we do is reported to the government, and how much of a stranglehold the government has on our resources.

Boortz is a fun read. You might just look it up for entertainment sake.

Also, you can go to the local borders and get Boortz's book on the subject.
 

Mr Clean

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Wouldn't it stifle consumer spending?
 

RadiomanATL

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Wouldn't it stifle consumer spending?


According to proponents, yes, but only at first.

The pro view: Since only the end consumer pays the tax, the hidden taxes on goods (the multiple layers of taxes on product manufacturing) will eventually go away and shelf prices will come back down to current levels. This combined with a larger take-home paycheck and the economy will begin to boom...bringing in more tax revenues.

Now, I'm not quite sure I buy all this rainbows and unicorn farts version of it, but with the caveats I posted earlier I'm all for phasing it in. However not now. IMO the economy needs to be doing well with high employment, because even the realistic proponents I have seen acknowledge that this will put the brakes on an economy for a while, and none of them can say how long.
 
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Part of the unicorn farts is reducing the amount of time and effort wasted in compliance issues.

The argument is there is so much friction and waste generated by the current tax code, and so much tax loss generated by "targeted tax cuts"/"loopholes" that eliminating the losses through stupid will make the thing a net gainer very quickly.
 
OP
Coloradomtnman

Coloradomtnman

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Baruch's reasoning seems the most realistic to me and I somewhat intuitively thought that the nature of the the consumption tax would be as s/he describes, to put it simply.

Thanks for the info, Baruch, I will check out what Boortz has to say about it and go from there.
 

Annie

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Ever heard of it? It means Federal sales tax is all. What if we had that instead of income tax?

I heard about it on Fox News. Seems reasonable on the surface. What do you guys think? Educate me (and others who know little about this idea).

p.s. If you didn't know it, I'm a far left liberal.


In the world of taxes, progressive means that those who have more, pay more. Regressive means that all pay equally. The rich and the poor all pay the same percent of their expenditures under this tax so it is the most regressive tax there is.

The argument goes that the rich buy more and what they buy is generally more expensive so they will pay more. A Lexus vs. a Corrolla.

One purpose of taxation through income is social engineering. Collecting taxes through purchases, if that tax is level across all products, eliminates this. Income taxes with credits for certain purchased items will incent the purchases of those items. A sales tax withdraws some of the governmental intrusion into our lives.

A sales tax also applies to all purchases so the under the counter transactions on income that avoid taxation will cease and the whole GDP will be taxed instead of just those who have incomes that exceed minimums.

A sales tax is the most small d democratic tax there is. As a result, the big d Democrat party would not like this.

I must disagree, I'm quite sure that the Democrats are heading for a VAT, the most regressive of taxes. Those of us that spend all of our income to meet our needs are going to be taxed on all. This will be in addition to 'progressive' income tax at federal and state levels. In addition to the sales taxes already levied by state, county, municipalities. In addition to property taxes, and all other taxes levied.
 

RadiomanATL

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Ever heard of it? It means Federal sales tax is all. What if we had that instead of income tax?

I heard about it on Fox News. Seems reasonable on the surface. What do you guys think? Educate me (and others who know little about this idea).

p.s. If you didn't know it, I'm a far left liberal.


In the world of taxes, progressive means that those who have more, pay more. Regressive means that all pay equally. The rich and the poor all pay the same percent of their expenditures under this tax so it is the most regressive tax there is.

The argument goes that the rich buy more and what they buy is generally more expensive so they will pay more. A Lexus vs. a Corrolla.

One purpose of taxation through income is social engineering. Collecting taxes through purchases, if that tax is level across all products, eliminates this. Income taxes with credits for certain purchased items will incent the purchases of those items. A sales tax withdraws some of the governmental intrusion into our lives.

A sales tax also applies to all purchases so the under the counter transactions on income that avoid taxation will cease and the whole GDP will be taxed instead of just those who have incomes that exceed minimums.

A sales tax is the most small d democratic tax there is. As a result, the big d Democrat party would not like this.

I must disagree, I'm quite sure that the Democrats are heading for a VAT, the most regressive of taxes. Those of us that spend all of our income to meet our needs are going to be taxed on all. This will be in addition to 'progressive' income tax at federal and state levels. In addition to the sales taxes already levied by state, county, municipalities. In addition to property taxes, and all other taxes levied.

Yeah, but they want a VAT in addition to the current taxes.

The fair tax thing would get rid of all other federal income taxes.
 

Annie

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In the world of taxes, progressive means that those who have more, pay more. Regressive means that all pay equally. The rich and the poor all pay the same percent of their expenditures under this tax so it is the most regressive tax there is.

The argument goes that the rich buy more and what they buy is generally more expensive so they will pay more. A Lexus vs. a Corrolla.

One purpose of taxation through income is social engineering. Collecting taxes through purchases, if that tax is level across all products, eliminates this. Income taxes with credits for certain purchased items will incent the purchases of those items. A sales tax withdraws some of the governmental intrusion into our lives.

A sales tax also applies to all purchases so the under the counter transactions on income that avoid taxation will cease and the whole GDP will be taxed instead of just those who have incomes that exceed minimums.

A sales tax is the most small d democratic tax there is. As a result, the big d Democrat party would not like this.

I must disagree, I'm quite sure that the Democrats are heading for a VAT, the most regressive of taxes. Those of us that spend all of our income to meet our needs are going to be taxed on all. This will be in addition to 'progressive' income tax at federal and state levels. In addition to the sales taxes already levied by state, county, municipalities. In addition to property taxes, and all other taxes levied.

Yeah, but they want a VAT in addition to the current taxes.

The fair tax thing would get rid of all other federal income taxes.

When the OP referred to a consumer tax, I believe he was referring to VAT, not FAIR tax. In actuality the same arguments remain.
 

RadiomanATL

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I must disagree, I'm quite sure that the Democrats are heading for a VAT, the most regressive of taxes. Those of us that spend all of our income to meet our needs are going to be taxed on all. This will be in addition to 'progressive' income tax at federal and state levels. In addition to the sales taxes already levied by state, county, municipalities. In addition to property taxes, and all other taxes levied.

Yeah, but they want a VAT in addition to the current taxes.

The fair tax thing would get rid of all other federal income taxes.

When the OP referred to a consumer tax, I believe he was referring to VAT, not FAIR tax. In actuality the same arguments remain.


I took the OP to mean the Fair tax.
 

Paulie

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While we debate tirelessly about different ways to tax money out of people's pockets, there's billions in spending just WAITING to be cut instead.
 

SFC Ollie

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I agree with Annie, if the Democrats decide to go to a VAT it will be in addition to Federal Income tax, State and local taxes. And some states will then feel free to add their own VAT on top of that because they are all going broke. Face it, we are screwed , glued, and tattooed.
 

Neubarth

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While we debate tirelessly about different ways to tax money out of people's pockets, there's billions in spending just WAITING to be cut instead.
How many people will THAT put out of work?
 

Paulie

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While we debate tirelessly about different ways to tax money out of people's pockets, there's billions in spending just WAITING to be cut instead.
How many people will THAT put out of work?

Could you do some of the economic threads a favor around here and not post in them?

Thanks :thup:
 

Annie

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While we debate tirelessly about different ways to tax money out of people's pockets, there's billions in spending just WAITING to be cut instead.

Don't fund this monstrosity of HCP, cut taxes across the board. Spending and taxes both need to be cut, now that the economy seems to be correcting.

I don't expect this though. Nope, those in power are more than likely to kill the markets before Nov.
 

Paulie

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While we debate tirelessly about different ways to tax money out of people's pockets, there's billions in spending just WAITING to be cut instead.

Don't fund this monstrosity of HCP, cut taxes across the board. Spending and taxes both need to be cut, now that the economy seems to be correcting.

I don't expect this though. Nope, those in power are more than likely to kill the markets before Nov.

Ron Paul's not looking so bad these days now, huh? :lol:
 

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