From each according to his ability, to each according to his ability

[Ravi]

You have to remember though that the increase in sales tax would be off set by not haveing any income tax. Getting rid of the income tax instantly raises everybodies disposable income. Wouldn't a 15% raise help you a lot.

I don't think your perception as to what would happen to buying habits is accurate either. Higher prices aren't going to be much of deterrant for people. The fact that so many Americans are in debt up to their eye balls is proof enough of that.

I will take my cop now then as well. As I said before I don't think anyone has a right to take what I have earned. I would feel better about someone taxing for the benefit of the entire naiton something that I 1) had a say in purchasing and 2) participated in the over all economy. How don't how much sense that makes but to me taxing for participation in our countries economy seems more fair than taking part of what I ahve earned.

P.S. I'm probably wrong about the clothers but you get the point about haveing a sales tax on more consumables.

Bern, you solved my reason for suspecting this would hurt the poor...poor people don't pay income taxes. So a national sales tax would hurt them. And hurting them in the pocketbook would cause them to spend less. And since there are more poor people than rich people, the economy WILL suffer. The rich can't survive without the poor to buy what they sell. And even those of us in the middle class will suffer in the long run if the rich fail and the poor fail.

 

[Tristan]

America is neither a communist or nor a socialist country and to keep pretending someone is trying to make it so is just a scare tactic of the right.

Be it here resolved, for the purpose of this thread, "America is neither a communist or nor a socialist country". (Thanks Captain Obvious)

However, "scare tactics" come from both sides and to pretend no one is pushing our mixed economy in the direction of their own political side is foolish in the extream.

I think we can all agree that taxation is needed to maintain overall harmony for a country. Any form of taxation for the benefit of society is socialistic by definition.

Your wrong. We can't all agree because I, for one, do not agree. (and fwiw, I'm not a Libertarian) I also do not agree that "any form of taxation for the benifit of society is socialistic by definition".

It'd be an interesting experiment to do away with all taxation and spending for a year and see what becomes of our country.

It would be a disasterous experiment IMHO, especially with the proviso that it would only last "a year". It would be the same, and as cruel as setting an old domestic dog loose in the wild after teaching it to depend on you from birth.

 

[Bern80]

Bern, you solved my reason for suspecting this would hurt the poor...poor people don't pay income taxes. So a national sales tax would hurt them. And hurting them in the pocketbook would cause them to spend less. And since there are more poor people than rich people, the economy WILL suffer. The rich can't survive without the poor to buy what they sell. And even those of us in the middle class will suffer in the long run if the rich fail and the poor fail.

I guess we have to define poor then. If you mean poor as in no job at all then yeah that would be poor. But that's pretty small percentage of the population and I don't see the small of a percent crippling the economy. So you must be calling something else poor. we can broaden it to minimum wage earners (who currently have income tax taken from their checks). Some brief research suggests you could tack on another 2-3% of the population. Let's just assume for the sack of argument our unemployment rate only represents poor people. That's at about 5% . So do you see 8% of the population destroying the economy? I doubt it, so pick a number. What is poor? I make $12/hr. I'm not living in destitute. I play video games so figuring in my state sales tax on the the gernerous 14% fed tax that would be about $10 extra per game. I think I can swing that.

have you even bother to crunch the numbers on this? You're trying to persuade me that .60 cents on $3.00 loaf of bread is going to kill you? You're right people will have to start makeing some decisions. That's a good thing. Is it going to kill the economy? There isn't any real evidenve that that would happen.

 

[Ravi]

I guess we have to define poor then. If you mean poor as in no job at all then yeah that would be poor. But that's pretty small percentage of the population and I don't see the small of a percent crippling the economy. So you must be calling something else poor. we can broaden it to minimum wage earners (who currently have income tax taken from their checks). Some brief research suggests you could tack on another 2-3% of the population. Let's just assume for the sack of argument our unemployment rate only represents poor people. That's at about 5% . So do you see 8% of the population destroying the economy? I doubt it, so pick a number. What is poor? I make $12/hr. I'm not living in destitute. I play video games so figuring in my state sales tax on the the gernerous 14% fed tax that would be about $10 extra per game. I think I can swing that.

have you even bother to crunch the numbers on this? You're trying to persuade me that .60 cents on $3.00 loaf of bread is going to kill you? You're right people will have to start makeing some decisions. That's a good thing. Is it going to kill the economy? There isn't any real evidenve that that would happen.

I'm saying poor is the federal poverty level. And lower middle class people get a lot of their tax money back...and I consider them poor as well. I'm not sure where you are getting your 8%, please show me. And yes, 21% on everything, not just a single loaf of bread, could be crippling.

 

[busara]

I guess we have to define poor then. If you mean poor as in no job at all then yeah that would be poor. But that's pretty small percentage of the population and I don't see the small of a percent crippling the economy. So you must be calling something else poor. we can broaden it to minimum wage earners (who currently have income tax taken from their checks). Some brief research suggests you could tack on another 2-3% of the population. Let's just assume for the sack of argument our unemployment rate only represents poor people. That's at about 5% . So do you see 8% of the population destroying the economy? I doubt it, so pick a number. What is poor? I make $12/hr. I'm not living in destitute. I play video games so figuring in my state sales tax on the the gernerous 14% fed tax that would be about $10 extra per game. I think I can swing that.

have you even bother to crunch the numbers on this? You're trying to persuade me that .60 cents on $3.00 loaf of bread is going to kill you? You're right people will have to start makeing some decisions. That's a good thing. Is it going to kill the economy? There isn't any real evidenve that that would happen.

are there countries that instituted a sales-only tax? i dont see any other way to get the 'evidenve'

serious question though, cause i dont know of any that have done that, but i'm not very familiar with this concept

 

[Bern80]

I'm saying poor is the federal poverty level. And lower middle class people get a lot of their tax money back...and I consider them poor as well. I'm not sure where you are getting your 8%, please show me. And yes, 21% on everything, not just a single loaf of bread, could be crippling.

5% unemployed (assuming they are all also poor which they aren't) and 3% earning minimum wage (who pay income tax out of there check.

You are also probably not accurate in the effect it will have on them. this is the same group of people that we bemoan liveing pay period to pay period. Well every pay period they are going to have more money if they aren't paying income tax. And again haveing them have to make some decisions is not a bad thing.

Now let's crunch some more numbers. The low end of teh income tax bracket is 15% and we'er going to take that away. MN the state I live in has one of the highest sales taxes at 6.5% (more in some counties) add that to 14% fed sales tax and we'll call it 21% sales tax to be generous. So 21% of your disposable income went to taxes/ In reality though it is not an increase of 21%. Net it is a tax increase of 5-6% or maybe even zero. Over a two week period you now 15% more disposable income 14% of which would be taken up by fed sales tax.

IT is actually the rich that would probably get the raw end of the deal. There fed income tax rate is 35%. You have to remember this is only Fed income tax so when i said they end up haveing close to half their paycheck taken up in taxes I was right because they still have state income tax, SS and medicare to dudected.

 

[Bern80]

are there countries that instituted a sales-only tax? i dont see any other way to get the 'evidenve'

serious question though, cause i dont know of any that have done that, but i'm not very familiar with this concept

I don't know of any countries that have either. Despite whinning about taxes the U.S. has some of the lowest in the world still. Steve Forbes has continued to push this idea, That's where I came up with the 14%.

 

[Ravi]

mmkay, Bern. If you make $12 an hour, you are married and your wife makes roughly the same, you pay 13% income taxes. If you have kids, it is less.

So in your scenario, you make the federal sales tax to 15% and pay that on top of a (guesstimate) 6%...now you are paying 21%.

How does that help you?

I could be figuring this wrong, but I took the information from the IRS tax tables.

 

[Bern80]

mmkay, Bern. If you make $12 an hour, you are married and your wife makes roughly the same, you pay 13% income taxes. If you have kids, it is less.

So in your scenario, you make the federal sales tax to 15% and pay that on top of a (guesstimate) 6%...now you are paying 21%.

How does that help you?

I could be figuring this wrong, but I took the information from the IRS tax tables.

the numbers are right. But I believe the most accurate way to look at how it would shake out is to do look at it by pay period. Again we bemoan the poor for living paycheck to paycheck so to me it would only make sense to figuire the total gain/loss over that sameperiod.

We can continue to use 21% sales tax or more accurately 14% increase in what you paid in sales tax previously. I would have to pay 6% before and probably after the plan as well in state sales tax. However over the same period you have 15% more money becaus it wasn't taken out of your paycheck, for a net increase in taxes paid of close to zero over a two week period.

Also conisder that the income tax out of your paycheck is constant. As an easy number let's use 10% and say you make $1000 dollars every pay period. So you have $100 in fed income tax taken out every two weeks. With a fed sales tax you certainly have the possibility of not coming even close to that in the amount of sales tax you would pay over the same period. Granted you could exceed it as well.

Keep track of it for a pay period yourself some time. Your pay stub tells you how much you have taken out in fed income tax. keep all receipt for two weeks and see how much sales tax you paid and compare it. I would be really surprised if it is more than what comes out of your paycheck.

 

[Ravi]

Well, yeah, since my sales tax rate is 6% and my income tax rate is quite a bit higher...of course it would be more.

Let's make this really easy. Say you are making the $48,000 a year with the tax rate of 13%. You are paying $6240 income tax. If you don't pay income tax and manage to save 10% of your salary, you are left with $43,200 to spend on shelter, food, clothing, entertainment, etc. Which you must pay 15% national sales tax on. You are losing $240 a year to taxes this way.

48,000 x 13% = $6240 Income tax paid
43,200 x 15% = $6480 National sales tax paid

Net loss = $240

And even that is wrong. When you fill out the 1040 and take your standard deduction and at least the one exemption you are entitled to take, you are paying tax on $33,900.

$33,900 X 13% = $4407 Income tax paid
$43,200 (still managing to save 10%) x 15% = $6480 National sales tax paid

Net loss = $2073

You're killing yourself, Bern

 

[editec]

It is indeed a question of degrees. I (a righty, but not fringe righty) believe there certainly is a need for taxes because there are things government should provide for it's citizenry (roads, police protection, military, etc.).

to be honest, I still think the definition of socialism is when the government controls (owns) the means of production, and THAT is the ONLY way a government can be correctly termed socialist.

The preposerterous system most radical rights use the term is convenient for them, but completely wrong for everyone else.

Basically what most of them do is pick and choose which social services they believe it is the business of government to do, and then call every other social service they object to socialism.

Trypically, anything which helps the people is what these political science neophytes call socialism, except police, courts and the military.

At the same time don't you think government should be making a concerted effort to NOT spend the tax payers money?

Well...yeah. I don't want any more government intrusion in our lives than is absolutely necessary to keep this society from flying to pieces.

Sadly, it appears that modern complex society requires far more governance that ANY of us are really comfortable with.

Such a concept sounds almost foreign to the way our government spends money.

Agreed, but not just ours. EVERY government of EVERY modern post industrial society seems have its finger in nearly every pie.

How much of what you make are you comfortable with government taking? Is half okay with you if you're a high income earner?

Comfortable? hmmm... I don't think I can give you a hard number, first because that number will change as needed, and secondly because the aggregate taxes taken in have to (should) be enough to pay the bills.

In times of war (like WWII) the rate might be very high, in less trying times, it should not be that high.

But here's a thought, and one brought to us by our Libertarians chums.

I'd be more comfortable if much of what is now paid out of the general fund by taxation on incomes were paid as FEES by the people who benefit from that service.

For example, if I never use airports, why should I have to pay for maintaining the FTC's contributions to them?

Now obviously I am NOT saying that I want every road a toll road, but much of the money now spent benefits a relatively limited number of people, but we ALL pay for those services.

BTW, non sequiter alert


Did you know that John McCain collects around $22,000 a year in social security benefits?

This is the man who still draws a military retirement paycheck from the military, an active paycheck from Congress, his wife is multimillionaire, and he's collecting social security, too?

Waste in government, much? How many monthly checks does our government have to send this guy, anyway? THREE!

John has been sucking off the government teat his whole damned life, as did his father and grandfather, I might add.

AND he's the guy who is going to cut waste out of our government?

I rather seriously forking doubt that.

 

[Bern80]

Well, yeah, since my sales tax rate is 6% and my income tax rate is quite a bit higher...of course it would be more.

Let's make this really easy. Say you are making the $48,000 a year with the tax rate of 13%. You are paying $6240 income tax. If you don't pay income tax and manage to save 10% of your salary, you are left with $43,200 to spend on shelter, food, clothing, entertainment, etc. Which you must pay 15% national sales tax on. You are losing $240 a year to taxes this way.

If you have fed income tax rate of 13% and now you rnot paying it, it would seem you have saved, gained, however you want to say it 13%, not 10%

48,000 x 13% = $6240 Income tax paid
43,200 x 15% = $6480 National sales tax paid

Net loss = $240

And even that is wrong. When you fill out the 1040 and take your standard deduction and at least the one exemption you are entitled to take, you are paying tax on $33,900.

$33,900 X 13% = $4407 Income tax paid
$43,200 (still managing to save 10%) x 15% = $6480 National sales tax paid

Net loss = $2073

You're killing yourself, Bern

You're changing number around though. 15% is the lowest federal income tax bracket. 14% is what we have been using as a Fed sales tax

33,900 x 15% = 5885
43200 x %14 = 6048

For a differnce of 163 dollars over a year. Obvioulsy all we have to do is change numbers to make our case. But using up to this what I thought we agreed on that's how it would work out. 163 over 52 pay periods a year is in the 2-$3 dollar range. I think most people will be able to deal with that.

 

[Ravi]

If you have fed income tax rate of 13% and now you rnot paying it, it would seem you have saved, gained, however you want to say it 13%, not 10%



You're changing number around though. 15% is the lowest federal income tax bracket. 14% is what we have been using as a Fed sales tax

33,900 x 15% = 5885
43200 x %14 = 6048

For a differnce of 163 dollars over a year. Obvioulsy all we have to do is change numbers to make our case. But using up to this what I thought we agreed on that's how it would work out. 163 over 52 pay periods a year is in the 2-$3 dollar range. I think most people will be able to deal with that.

I thought we were using the current tax rate of someone making $12 per hour...around 13% vs. a national sales tax of 15%.

I'll do it by paycheck, and use a 14% national sales tax.

Our hypothetical person making $12 per hour would gross $480 per week. According to the IRS tax tables, his tax rate if single and declaring no deductions is $58. If married and declaring no deductions, it's $35 (I used no deductions because that is the highest possible amount you'd have to pay in income taxes).

So you pay either $58 (if single) $35 (if married) or $67.20 in national sales tax ($480 x 14%).

Who exactly would agree to this? No matter how you slice it, our $12 an hour person is paying MORE, not less. The poor and the middle class would end up paying MORE in taxes with a national sales tax.

Here's the link to the IRS tax table: http://www.irs.gov/pub/irs-pdf/p15.pdf

 

[Ravi]

PS, your refigure is wrong.

33,900 x 13% = 4407
43200 x %14 = 6048

Net loss of $1641 per year

 

[Care4all]

will the Social Security and medicare taxes be eliminated and included in on this Consumption tax?

Or are you guys saying the wage earners will have to pay these taxes too, up to $100k?

 

[Ravi]

will the Social Security and medicare taxes be eliminated and included in on this Consumption tax?

Or are you guys saying the wage earners will have to pay these taxes too, up to $100k?

I dunno what he's thinking Care, we were just talking about income tax.

 

[Care4all]

I dunno what he's thinking Care, we were just talking about income tax.

social security taxes ARE PART of our federal revenues and are part of our federal budget/spending....and most importantly they are taxes on our wages....and are being used to fund the federal budget.

if SS taxes were eliminated by this 15% consumption tax, we would be talking a whole different ballgame....

but it would probably be impossible to cover SS too, at only a 15% sales tax...

personally, if there was a change, a flat tax would be better, taxing wage earners and investment earners the same flat rate including foreign investments made, giving a flat exemption of 15k per person or something like that....before the flat tax takes affect.

care

 

[editec]

When you take into the tax disucussion Social security, FICA, medicade, state local and sales taxes?

The poor pay the highest percentage of their incomes in taxes of any class of Americans, and that is true even though they pay no FICA taxes...

The wealthier one is, generally speaking, the smaller the percentage of your net revenues (not just salaries, but all sources of money that people can make) one pays in TAXES.

Simply parcing out FICA and whining about those is ignoring the reality we ALL face.

Here's a though...collect social security and medicade taxes on every cent made, regardless of how it is made.

You want a flat tax? THAT is an honest FLAT tax.

You think Steve Forbes is going to sign onto THAT flat tax?

Not bloody likely.

 

[Bern80]

PS, your refigure is wrong.

33,900 x 13% = 4407
43200 x %14 = 6048

Net loss of $1641 per year

Okay I can live with those numbers. That acount for the deduction and I'll take your word on the 13%. That equates to extra $63 every two week pay period (1641 / 26). I'm not arguing that the low income people would pay less in total tax. I'm arguing that if they do it isn't going to be enough to hurt them or cripple the economy. Yeah maybe $63 dollars every two weeks would be hard on a few people. But I hardly believe that's enough to be some burden that is going to suddenly turn enough people into penny pinchers to where we would see a really effect in the economy. It's not gonna stop me from buying video game (which is almost exactley what they cost now).

There is one big assumption you're forgetting as well. $4407 divided by 26 is $169.50. that's a constant number. With fed income tax that is the amount that is going to be taken every two weeks no matter what. We are assuming that the sales tax would be the same with our math. We figured an extra $63 dollars evey two weeks. BUT that is only IF you spent your entire paycheck every two weeks.

 

[Care4all]

Okay I can live with those numbers. That acount for the deduction and I'll take your word on the 13%. That equates to extra $63 every two week pay period (1641 / 26). I'm not arguing that the low income people would pay less in total tax. I'm arguing that if they do it isn't going to be enough to hurt them or cripple the economy. Yeah maybe $63 dollars every two weeks would be hard on a few people. But I hardly believe that's enough to be some burden that is going to suddenly turn enough people into penny pinchers to where we would see a really effect in the economy. It's not gonna stop me from buying video game (which is almost exactley what they cost now).

There is one big assumption you're forgetting as well. $4407 divided by 26 is $169.50. that's a constant number. With fed income tax that is the amount that is going to be taken every two weeks no matter what. We are assuming that the sales tax would be the same with our math. We figured an extra $63 dollars evey two weeks. BUT that is only IF you spent your entire paycheck every two weeks.

Bern,

Can you tell me what the PURPOSE is for this change in tax system?

Who is it that will benefit from this change?

care