The effect of a consumption tax.....

[justoffal]

Before I get too far into this.....let me say that I have advocated for this for a long, long time for many reasons. It won't be an easy transition. It will probably take five or six years to balance out the economy but when it does balance it should be comfortably in the black. Yes it will hurt low income people at first but in the end it will make them much more financially stable. As market forces dictate the purchasing of taxed goods manufacturers and producers will be force to align themselves with market pressures in a way that they can escape from right now. I don't know where the numbers are on hidden wealth of the super wealthy....but I am sure they are huge and far beyond what anyone even estimates. It won't hurt them of course but it should boost the revenue from that sector by four to five times what it is right now. Want to buy a 25 million dollar house in LA on the shore? Fine....that will be five million to the IRS please. Want to buy a gallon of milk for four bucks? Fifty cents to the IRS please. The beauty of this system is that the army of tax collectors are already out there in place behind every cash register in the country. They must number 10 times the current number of IRS agents on the job. Additionally anyone who steps over the border to buy a bag of potato chips is also buying into the system of representation. It will virtually eliminate the term illegal alien. It should quite literally triple the revenue without undue financial pressure. It's the only way to go.

JO

 

[ReinyDays]

Before I get too far into this.....let me say that I have advocated for this for a long, long time for many reasons. It won't be an easy transition. It will probably take five or six years to balance out the economy but when it does balance it should be comfortably in the black. Yes it will hurt low income people at first but in the end it will make them much more financially stable. As market forces dictate the purchasing of taxed goods manufacturers and producers will be force to align themselves with market pressures in a way that they can escape from right now. I don't know where the numbers are on hidden wealth of the super wealthy....but I am sure they are huge and far beyond what anyone even estimates. It won't hurt them of course but it should boost the revenue from that sector by four to five times what it is right now. Want to buy a 25 million dollar house in LA on the shore?
Fine....that will be five million to the IRS please. Want to buy a gallon of milk for four bucks? Fifty cents to the IRS please. The beauty of this system is that the army of tax collectors are already out there in place behind every cash register in the country. The must number 10 times the current number of IRS agents on the job. Additionally anyone who steps over the border to buy a bag of potato chips is also buying into the system of representation. It will virtually eliminate the term Iligal alien. It should quite literally triple the revenue without undue financial pressure. It's the only way to go.

JO

As with any taxing scheme ... if we leave it to Congress, they will gut the program, product by product ... as long as Citizen's United stands, companies can just buy their tax exemptions ... roughly ten-to-one ... for each million in campaign contributions, companies can expect ten million in refundable tax credits ... the company doesn't pay taxes, so they get ten million dollar check instead ...

As a founding principle of our country, we are to do away with inherited wealth ... as we do away with the Aristocracy ... this is a sales tax, clear as a bell, and the National Sales Tax would have to be closer to 20% ... that's $2.5 billion per day just on NYSE trading ... or is that exempt already? ...

 

[Blues Man]

The necessities of life should never be taxed.

Food, clothing, prescription medications should never be taxed.

I'm of the mind that public utilities should never be taxed either.

 

[johngaltshrugged]

The necessities of life should never be taxed.

Food, clothing, prescription medications should never be taxed.

I'm of the mind that public utilities should never be taxed either.

Why is that? If someone wants to spend $1000 on a pair of shoes or $ 200 on a meal, why is that exempt?
If you want to talk about a minimum level on necessities being free from taxes, that is a conversation we can have but no taxes on items that make up a giant proportion of our economy would make a consumption tax pointless & never allow us to eliminate the income tax.
Abolishing a tax on production (income tax) is the main goal here

 

[justoffal]

As with any taxing scheme ... if we leave it to Congress, they will gut the program, product by product ... as long as Citizen's United stands, companies can just buy their tax exemptions ... roughly ten-to-one ... for each million in campaign contributions, companies can expect ten million in refundable tax credits ... the company doesn't pay taxes, so they get ten million dollar check instead ...

As a founding principle of our country, we are to do away with inherited wealth ... as we do away with the Aristocracy ... this is a sales tax, clear as a bell, and the National Sales Tax would have to be closer to 20% ... that's $2.5 billion per day just on NYSE trading ... or is that exempt already? ...

Sighhhhh..... You are most likely right....

JO

 

[Blues Man]

Why is that? If someone wants to spend $1000 on a pair of shoes or $ 200 on a meal, why is that exempt?
If you want to talk about a minimum level on necessities being free from taxes, that is a conversation we can have but no taxes on items that make up a giant proportion of our economy would make a consumption tax pointless & never allow us to eliminate the income tax.
Abolishing a tax on production (income tax) is the main goal here

Groceries not restaurants. Clothing and shoes up to say $150 should be exempt and a tax applied to the amount over that.

It's no different than having a personal deduction on an income tax.

 

[g5000]

As with any taxing scheme ... if we leave it to Congress, they will gut the program, product by product ... as long as Citizen's United stands, companies can just buy their tax exemptions ... roughly ten-to-one ... for each million in campaign contributions, companies can expect ten million in refundable tax credits ... the company doesn't pay taxes, so they get ten million dollar check instead ...

Exactly. Tax expenditures are the biggest driver of our federal debt.

No tax scheme will succeed unless we ban tax expenditures.

Unfortunately, cash contributions to our politicians to put those exemptions, deductions, and credits in the tax code are the bread and butter of their re-election campaigns.

That's why the House has a 98 percent re-election rate and the Senate has an 80 percent re-election rate.

 

[ReinyDays]

Exactly. Tax expenditures are the biggest driver of our federal debt.

No tax scheme will succeed unless we ban tax expenditures.

Unfortunately, cash contributions to our politicians to put those exemptions, deductions, and credits in the tax code are the bread and butter of their re-election campaigns.

That's why the House has a 98 percent re-election rate and the Senate has an 80 percent re-election rate.

We could just simply strip away everything from the tax code enacted since 1986 ... Reagan's big tax overhaul ... but that won't stop Congress from exempting what they're told to exempt ...

Already we're serving Agribusiness by exempting food ... and ADM didn't have to pay one red cent in campaign bribes ... just awful ...

 

[Concerned American]

Before I get too far into this.....let me say that I have advocated for this for a long, long time for many reasons. It won't be an easy transition. It will probably take five or six years to balance out the economy but when it does balance it should be comfortably in the black. Yes it will hurt low income people at first but in the end it will make them much more financially stable. As market forces dictate the purchasing of taxed goods manufacturers and producers will be force to align themselves with market pressures in a way that they can escape from right now. I don't know where the numbers are on hidden wealth of the super wealthy....but I am sure they are huge and far beyond what anyone even estimates. It won't hurt them of course but it should boost the revenue from that sector by four to five times what it is right now. Want to buy a 25 million dollar house in LA on the shore? Fine....that will be five million to the IRS please. Want to buy a gallon of milk for four bucks? Fifty cents to the IRS please. The beauty of this system is that the army of tax collectors are already out there in place behind every cash register in the country. They must number 10 times the current number of IRS agents on the job. Additionally anyone who steps over the border to buy a bag of potato chips is also buying into the system of representation. It will virtually eliminate the term illegal alien. It should quite literally triple the revenue without undue financial pressure. It's the only way to go.

JO

I have always thought that consumption tax was the most fair taxation as it hits all equally. However, the events of the last two years have made me see a need to look deeper. This admin pledged to not raise taxes--it is questionable that they have kept their promise. What they HAVE done in created out of control inflation that has increased the price of EVERYTHING to the tune of 10%. If the price of consumer goods raises by 10%, then EVERYONE's taxes have increased by 10% if we are using a consumption tax.

 

[g5000]

I have always thought that consumption tax was the most fair taxation as it hits all equally. However, the events of the last two years have made me see a need to look deeper. This admin pledged to not raise taxes--it is questionable that they have kept their promise. What they HAVE done in created out of control inflation that has increased the price of EVERYTHING to the tune of 10%. If the price of consumer goods raises by 10%, then EVERYONE's taxes have increased by 10% if we are using a consumption tax.

This administration did not create inflation. Inflation does not magically happen overnight. Only the ignorant fall for the hoax of instant inflation.

Inflation was caused by the wild spending of the past two decades to artificially juice GDP growth, and the Fed keeping interest rates way too low for way too long to help the banks recover their losses from 2008.

 

[jwoodie]

One of the biggest problems with a consumption tax is that the percentage can easily be adjusted. Most people don't appreciate the difference between their gross income and take-home pay, and computation of sales tax is a complete mystery to them. As a result, a consumption tax is an easy way of increasing taxes under most people's radar.

On the other hand, the current tax system is a massive jumble of special interest exceptions and deductions. Chief among them is the distinction between taxable income and investment gains. The former is subject to immediate taxation, whereas the latter is taxed on a deferred basis (if at all). This means that it is more difficult to become wealthy than it is to stay wealthy. A good example of this is the fact that increasing generational wealth can easily be passed down with little or no tax consequences for either generation.

Rather than taxing consumption, which is already diminished by income taxes, perhaps a modest (~2%) tax on wealth should be implemented. For administrative efficiency, this should probably be limited to amounts over an inflation-adjusted amount of $5 million or so. This would not be an undue burden for people with net assets above this amount, since they already are (or should be) keeping track of their investments.

 

[Ray From Cleveland]

I have always thought that consumption tax was the most fair taxation as it hits all equally. However, the events of the last two years have made me see a need to look deeper. This admin pledged to not raise taxes--it is questionable that they have kept their promise. What they HAVE done in created out of control inflation that has increased the price of EVERYTHING to the tune of 10%. If the price of consumer goods raises by 10%, then EVERYONE's taxes have increased by 10% if we are using a consumption tax.

I'm all for a consumption tax to balance the budget. We can't get either party to do that so we might as well pay for overspending when it happens.

My idea is to start low with whatever it takes to cover any deficit spending. If spending goes up, so does the consumption tax. If spending goes down, whatever is left in the consumption tax kitty would be used to start paying down the national debt.

Our spending problem is us, the voters. The last spending was 1.7 trillion. How much of that spending was absolutely necessary? Probably not much of it. It's loaded with Democrat pork. But we don't care because it doesn't affect our lives. They passed the 1.7 trillion and the next day our lives didn't change.

It's time that stops. Let's say we start out with a consumption tax of 5 cents on the dollar. You approve of hiring 87,000 new IRS agents? Then your consumption tax goes from 5 cents on the dollar to 7 cents on the dollar. You support paying for student loans? Well then the 7 cents on the dollar just went to 10 cents on the dollar.

If we all had to pay for this spending when it happens, you'd see how fast the voters would put a stop to it.

 

[Concerned American]

whatever is left in the consumption tax kitty would be used to start paying down the national debt.

C'mon Ray, you know that no DC politician would EVER leave a dime in that kitty.

 

[dblack]

From my perspective, a consumption tax is bad for the same primary reason that an income tax is bad - it has us reporting all our financial transactions to the government, and gives them leverage to control trade, a long-time liberal ambition.

Outside of a straight up head-tax (everyone pays the same "membership fee"), a federal property tax makes the most sense to me. Registering a deed, and maintaining ownership of said property, already requires interacting with the state, so it's no additional intrusion. Still lots of problems with it (property valuation becomes politically charged), but it wouldn't entail the kind of micro-managment, and opportunities for manipulation and fraud, that a sales tax would.

 

[justoffal]

I have always thought that consumption tax was the most fair taxation as it hits all equally. However, the events of the last two years have made me see a need to look deeper. This admin pledged to not raise taxes--it is questionable that they have kept their promise. What they HAVE done in created out of control inflation that has increased the price of EVERYTHING to the tune of 10%. If the price of consumer goods raises by 10%, then EVERYONE's taxes have increased by 10% if we are using a consumption tax.

You are correct inflation is actually a backdoor tax.

Jo

 

[Dragonlady]

Before I get too far into this.....let me say that I have advocated for this for a long, long time for many reasons. It won't be an easy transition. It will probably take five or six years to balance out the economy but when it does balance it should be comfortably in the black. Yes it will hurt low income people at first but in the end it will make them much more financially stable. As market forces dictate the purchasing of taxed goods manufacturers and producers will be force to align themselves with market pressures in a way that they can escape from right now. I don't know where the numbers are on hidden wealth of the super wealthy....but I am sure they are huge and far beyond what anyone even estimates. It won't hurt them of course but it should boost the revenue from that sector by four to five times what it is right now. Want to buy a 25 million dollar house in LA on the shore? Fine....that will be five million to the IRS please. Want to buy a gallon of milk for four bucks? Fifty cents to the IRS please. The beauty of this system is that the army of tax collectors are already out there in place behind every cash register in the country. They must number 10 times the current number of IRS agents on the job. Additionally anyone who steps over the border to buy a bag of potato chips is also buying into the system of representation. It will virtually eliminate the term illegal alien. It should quite literally triple the revenue without undue financial pressure. It's the only way to go.

JO

We have this in Canada. It's called the "Goods and Services Tax", and it's on almost EVERYTHING, and Canadians HATE it so much that the political party which gave us this amazing tax along with NAFTA, and sent all of OUR manufacturing jobs home to the USA, no longer exists.

THIS is the worst idea ever in the history of bad ideas.

 

[justoffal]

We have this in Canada. It's called the "Goods and Services Tax", and it's on almost EVERYTHING, and Canadians HATE it so much that the political party which gave us this amazing tax along with NAFTA, and sent all of OUR manufacturing jobs home to the USA, no longer exists.

THIS is the worst idea ever in the history of bad ideas.

OK....that's a valuable contribution thanks....
Let me ask some quesitons:

So you have no payroll taxation but you find the consumption tax to be burdensome just the same? Do you see it as a major driver of costs?
What is the success of the tax itself? How is the Canadian revenue stream these days?

No trick questions here, I'm asking because I don't know.

JO

 

[Concerned American]

OK....that's a valuable contribution thanks....
Let me ask some quesitons:

So you have no payroll taxation but you find the consumption tax to be burdensome just the same? Do you see it as a major driver of costs?
What is the success of the tax itself? How is the Canadian revenue stream these days?

No trick questions here, I'm asking because I don't know.

JO

IDK where the Dragonlady is located in Canada, but I am aware of some taxation in BC. There, they have a 15% provisional tax AND a 15% federal goods and services (GST) tax, so when you go out for a nice meal, you can just add half again the menu cost to cover taxes and tip. Excessive to say the least.

 

[justoffal]

IDK where the Dragonlady is located in Canada, but I am aware of some taxation in BC. There, they have a 15% provisional tax AND a 15% federal goods and services (GST) tax, so when you go out for a nice meal, you can just add half again the menu cost to cover taxes and tip. Excessive to say the least.

hmm.....so the restaurant has to pay consumption tax to buy the stuff to prepare and it gets taxed again when you buy it from them...is that it?

 

[Concerned American]

hmm.....so the restaurant has to pay consumption tax to buy the stuff to prepare and it gets taxed again when you buy it from them...is that it?

I really don't know what the business is paying, but the end consumer pays combined provincial and federal sales taxes totaling 30% of the sales price.