Which Tax Would You Rather Pay?

[KMAN]

1.) Income Tax

or

2.) Consumption Tax (VAT) - Sales Tax

 

[Angel Heart]

Income Tax. I don't pay sales tax. I'm in Oregon. I do however get back way more in refunds with income tax than I put in.

 

[RetiredGySgt]

Income Tax. I don't pay sales tax. I'm in Oregon. I do however get back way more in refunds with income tax than I put in.

A reasonable INCOME Tax. Contrary to popular belief poor people will get harder hit with sales tax then rich people.

 

[Angel Heart]

A reasonable INCOME Tax. Contrary to popular belief poor people will get harder hit with sales tax then rich people.

Yup. I know it will hit my household harder.

Currently we get anywhere from $4500-6500 a year back in income taxes. We put in about $400-600.

The poor in our country are actually at a negative tax rate. They take out of government far more than they put in.

 

[Mr. Right]

The Fair tax will liberate this country and create wealth.

The Fair Tax does this in many ways. Right now we have a tax code that punishes you for doing better. There is no incentive to climb the ladder. In Fact, you may be better off making less money.

You can't argue with more money in your hands. A National sales tax will benefit everyone as a while. It will also strengthen the dollar and bring down the price of OIL.

I'd have to spend a few pages explaining this but our poor people would not be poor anymore if we'd implement this new code.

If you want a vibrant economy and you want a future for your kids and grand kids, I suggest you really examine the FAIR TAX fairly.

Money is freedom, freedom is power. I want all of my freedom back.

I'm off to buy a cheeseburger before it's illegal to do so.

 

[jillian]

The "fair tax" is the let's help the Forbes family keep their money tax.....

 

[midcan5]

Income Tax. I don't pay sales tax. I'm in Oregon. I do however get back way more in refunds with income tax than I put in.

Loved your sig but too early for attractive women even when they are drawings.

Consumption, aka fair tax is another oxymoron, 15% of poverty is lot more than 15% of weathiness. You have to have something to spend to buy, I'm always amazed that old economic nonsense has entered the heads of the social darwinist wingnuts in a society of a few haves and mostly have littles, each of us do less well when everyone doesn't have the opportunity to spend. A flourishing middle class and opportunity are the bedrock of a stable society.

 

[editec]

It is impossible to really know without knowing what the VAT rate will be.

I see the number 23% used, but critics claim that the even that rate is fraudulent and the real rate is about 30%. (apparently it's a semantics issue...see FairTax - Wikipedia, the free encyclopedia)

I believe that the "Fair Tax" will create wonderful career opportunities for the in the emerging black markets that will inevitably spring up in every hamlet, village, town and city in America.

I also believe that the overall market for used stuff would eventually become larger than the markets of new stuff.

OTOH, can that system be any worse that the wholesale fraud that our income tax system already is?

Of course it could.

Things, bad as they are, can always get worse.

So the question is who will this system benefit and who will it screw?

Critics say the poor will benefit (or at worse, it will be neutral), the middle class and upper middle classes will get screwed, and the better off will benefit tremendously.

We really have to see the numbers (and the assumptions behind those numbers, too) to really know.

 

[Foxfyre]

A consumption tax is problematic because of the difficulty in calculating it and where to apply it. Does the farmer who buys the seed, fertilizer, and pays the cost of watering, cultivating, and harvesting the cotton pays it? Does the gin who buys the cotton from the farmer pay it? Does the mill who buys the ginned cotton to weave into cloth pay it? Does the clothing manufacturer who buys the cloth pay it? Does the wholesaler who buys it from the clothing manufacturer pay it? Does the retailer who buys it from the wholesaler pay it before they sell it to you who pays it again?

There is the problem of incremental creep. Any of us who pay property taxes and/or sales taxes know how easy it is to add that quarter cent to pay for this or that. It doesn't seem realy significant at the time, but put enough of those quarter cents together and it becomes a big deal.

Somebody pointed out that a sales/consumption tax is the most regressive of all taxes and does impact the poor most.

And finally there is the problem of getting one started. We have all already paid income taxes on the cash in our bank accounts. It would be tough to have to pay that much tax again when we spend it.

I would prefer a flat income tax with everybody, poor, middle class, and rich paying the same percentage with no exceptions--go to Ross Perot's idea of filing your income tax return on a post card. Even here we would have to think through the process very carefully to avoid counter productive consequences re property values, charitable contributions, etc.

There has to be a better way to do it than what we have now. But the devil is always in the details and few things worth doing are ever as simple as they first may seem.

 

[indago]

PREVIOUS DISCUSSION

 

[Foxfyre]

I'm sure discussing a subject again may be boring for those who have already been through a topic. But new members are coming onto the forum all the time and the subject is new and fresh to them. Also some old members may have not participated in an old thread for whatever reason and now have the interest to do so. I think many of these topics are worth revisting from time to time.

 

[Taomon]

A reasonable INCOME Tax. Contrary to popular belief poor people will get harder hit with sales tax then rich people.

I agree with RGS.

 

[Mr. Right]

Okay, Here we go.

The cost os what we have now =

It currently costs our gov't over $330 billion to make sure everyone pays their fair share of tax.

The "Fair Tax" cost =

The Fair tax would cost $80 billion in compliance costs at the retail level.


Our gov't would have a net gain of $250 billion in just the first year.


Where would that money now go?

What would the I.R.S. do?

I believe the I.R.S. would still have a roll. Internal revenue would also be turned on the government as a watch dog for us the tax payer.

Just think of ever gov't office having to go through an audit every month.

They'd be accountable.

I'd also like to see Congress audited constantly. Think of the corruption you could eliminate.


Will the Fair Tax end up saving Steve Forbes money? Maybe.

The better question is would it do you better to have all of your money?

And would it be good if your money could buy more stuff?

As far as a "black market", The black market currently operates under the table.

Under the Fair Tax, The black market would be under new scrutiny. They would be guilty of tax evasion and copyright fraud.

Most black market items go to pay for forces hostile to the U.S.


Finally, any Income Tax is bad.

IT'S NOBODY'S BUSINESS HOW MUCH MONEY YOU HAVE OR MAKE!

The fact that our gov't can take what they deem as theirs before you see yours is outrageous and demeaning.

You have no power over your destiny. The Income tax is at odds with your pursuit of happiness.

This is tyranny people. They have no right to pry into your paycheck. Demand your fiscal freedom!

Set the Poor free as well! This tax chases more jobs off our shores than anything Steve Forbess has ever done.

If there is no Payroll tax or income tax, How many business will base themselves in America?



[answer: all of them]

We need to get rid of this socialist yoke that weighs down the spirit of what makes us the best country in the world.

We don't need the Big Brother gov't to take care of us. We're Americans, we're better than that.

We are independent and rugged.

We are in control of our own destiny.

Stop trying to be equal and be better. That's what makes us who we are. We're better. Leave the equal crap for the rest of the world. They're equal.

 

[Charles_Main]

There can be no argument that the rich pay more sales Tax than the poor. After all you only pay sales tax when you spend money, and the Rich have much more to spend.

The other good thing about the sales tax, is it makes everyone pay, even tourists. Anyone who buys things would pay it.

That said, do not take this as me advocating one of the other, I was just point out a fact about sales taxes.

 

[Foxfyre]

There can be no argument that the rich pay more sales Tax than the poor. After all you only pay sales tax when you spend money, and the Rich have much more to spend.

The other good thing about the sales tax, is it makes everyone pay, even tourists. Anyone who buys things would pay it.

That said, do not take this as me advocating one of the other, I was just point out a fact about sales taxes.

No it does not necessarily make everybody pay. There would be a even larger black market than there is now and people would barter a lot more to avoid the tax, two things that don't happen with an income tax.

Yes, the rich would pay more sales tax than the poor, but for the rich, a great deal of the additional that they would pay would be purely voluntary. The poor now pay little or no income tax. Under a VAT system for federal revenue, they would have to pay a great deal more for housing, utilities, groceries, clothing, and other necessities than they are now required to pay and therefore the rich would pay little more in mandatory tax than the poor. That is why a sales tax is so much more regressive than an income tax, even a flat income tax.

 

[Charles_Main]

No it does not necessarily make everybody pay. There would be a even larger black market than there is now and people would barter a lot more to avoid the tax, two things that don't happen with an income tax.

Yes, the rich would pay more sales tax than the poor, but for the rich, a great deal of the additional that they would pay would be purely voluntary. The poor now pay little or no income tax. Under a VAT system for federal revenue, they would have to pay a great deal more for housing, utilities, groceries, clothing, and other necessities than they are now required to pay and therefore the rich would pay little more in mandatory tax than the poor. That is why a sales tax is so much more regressive than an income tax, even a flat income tax.

Sure, but then the black market also avoids income taxes.

I imagine there could be some sort of rebate for the poor on sales tax if needed, also there should still be no sales tax on food. The basic needs of life, I hope would be exempt from tax.

 

[Gungnir]

I believe that Neal Boorts has mentioned several times that the Fair Tax would directly affect (and is intended to) people with low income. In this way it encourages people with low income to be frugal.

I prefer a pay-for-service tax or a general flat tax. A flat tax accessed onto the State Governments seems even better for Federal funding.

 

[Charles_Main]

I am also pretty sure with the flat tax, there would still be a low income cut off, with the people below it paying little or no taxes.

 

[editec]

I would prefer a flat income tax with everybody, poor, middle class, and rich paying the same percentage with no exceptions--go to Ross Perot's idea of filing your income tax return on a post card. Even here we would have to think through the process very carefully to avoid counter productive consequences re property values, charitable contributions, etc.

That would be a crushing blow to all lower income folks.

Imagine what the effect on a family trying to make it on $18,000 would be if they had to fork over some significant percentage of it in taxes.

They already pay sales taxes, hidden taxes in their rents, utility fees and so forth.

The flat tax appears to some because the proposed 10% you so often hear about would be lower than the amount they're paying now.

But I seriously doubt that 10 percentage bill would pay the government's bills.

 

[Foxfyre]

That would be a crushing blow to all lower income folks.

Imagine what the effect on a family trying to make it on $18,000 would be if they had to fork over some significant percentage of it in taxes.

They already pay sales taxes, hidden taxes in their rents, utility fees and so forth.

The flat tax appears to some because the proposed 10% you so often hear about would be lower than the amount they're paying now.

But I seriously doubt that 10 percentage bill would pay the government's bills.

The flat tax would certainly be a whole lot lower than a VAT tax would be for the poor. When I first started working EVERYBODY paid taxes. I didn't make much so not much came out of my paycheck, but I still paid a little bit every payday. It didn't hurt me a bit and taught me what paying taxes was all about.

Personally I think people who don't pay taxes shouldn't be allowed to vote as this gives them power to force others to support them and to favor candidates who will raise taxes on those who do pay taxes. So I am very much in favor of nobody paying NO taxes on earned income.

But I also want the tax code to pay for the necessities only of government and otherwise not be a hindrance or roadblock to anybody having opportunity to prosper and get ahead.

(I should add that any politician who presumes to spend more of the taxpayer's money than what is deemed a necessity as defined by the Constitution should be recalled by the voters immediately.)