Tax reform …..Consumption vs income

• Belly35

  

  Tax reform …..Consumption vs income
  
  Could America local, state and federal government be better served with a Consumption tax reform and elimination of Income tax mentality, property and other tax crap?
  
  What if what you earned is what you brought home .. minus the insurance withholding for your share of the insurance cost?
  
  What if what you put into the bank or saving would be rewarded with additional increase interest?
  
  What if what you and every American that purchased an item was spreading the tax burden.
  
  Note: The Consumption tax would be the only tax … and no level of government could create another tax on the American Public? This would not be a VAt tax but a straight Consumption Tax on all goods and services.
  
  Note: Presently some items (gas, cars, real estate) are already taxed and those item was remain the same % being taxed presently.
  
  http://www.investorguide.com/igu-article-1134-tax-basics-consumption-vs-income-tax.html
• Belly35

  

  Come on Liberals and Democrats this is a good idea all those entitlement you like to hand out comes backs in the form of a consumption tax and that 45% of the population that does pay into the tax system now will… and they don’t even know it… Perfect!
  
  This is right up your alley: Spreading the wealth and deceiving your base and taxes…..
  Oh wait! This would fair and balance to all Americans… something that those on entitlements program and Liberals/ Democrats don’t understand. Everyone participating in the process of taxation…
  
  Let get the Unions to agree with this idea… Stop! That would mean that those Union dues that are taken out of employees pay checks for service that are provide via the Union would be taxable …. And that extra $25.00 now to support the Union fight against Bill 5 would also be taxed…
  All that money sent to politicians would be taxable also … Oh my!
• BoatShoes

  Belly35;749237 wrote:Come on Liberals and Democrats this is a good idea all those entitlement you like to hand out comes backs in the form of a consumption tax and that 45% of the population that does pay into the tax system now will… and they don’t even know it… Perfect!
  
  This is right up your alley: Spreading the wealth and deceiving your base and taxes…..
  Oh wait! This would fair and balance to all Americans… something that those on entitlements program and Liberals/ Democrats don’t understand. Everyone participating in the process of taxation…
  
  Let get the Unions to agree with this idea… Stop! That would mean that those Union dues that are taken out of employees pay checks for service that are provide via the Union would be taxable …. And that extra $25.00 now to support the Union fight against Bill 5 would also be taxed…
  All that money sent to politicians would be taxable also … Oh my!

  
  The 45% of Americans who don't pay income taxes already do pay consumption taxes such as the payroll taxes, gas taxes etc. Additionally, most middle income earners who do pay income taxes are already effectively living under a consumption tax because of the various tax expenditures within the code such as the HMID, Exclusion of home sale gain, 401(k), etc. Ironically, the reason that 45% doesn't pay income taxes is because, alas, they are living under an effective consumption tax. Additionally, I am not saying this point of view is wrong but you can only consider it "more fair and balanced" if you think so if those who earn their income from labor as opposed to capital and middle and lower incomes should bear the greatest amount of the national tax burden.
• Manhattan Buckeye

  " Ironically, the reason that 45% doesn't pay income taxes is because, alas, they are living under an effective consumption tax. Additionally, I am not saying this point of view is wrong but you can only consider it "more fair and balanced" if you think so if those who earn their income from labor as opposed to capital and middle and lower incomes should bear the greatest amount of the national tax burden. "
  
  Because the 55% that do pay income taxes don't pay consumption taxes? Do they not buy groceries or gas?
  
  I'm going to ignore the last sentence...for obvious reasons.
• BGFalcons82

  

  I've written dozens of times about the www.fairtax.org plan. This is a form of a consumption tax that ELIMINATES all federal taxes (FICA, income tax, capital gains, Death Tax, phone tax, gas tax, etc.). It also eliminates all deductions (home mortgage interest, college deductions, property/state taxes, etc.).
  
  One point I would like to reinforce is that it also brings millions of Americans, both legal and illegal types, who pay no income taxes on their income from drugs, guns, stolen copper, etc. and from eeeevil rich fat cats that hide their income in the Grand Caymans. Even drug dealers, illegal aliens, and eeevil rich fat cats have to live in housing, buy food, buy gas, and invest in bling within our borders. These are all subject to a consumption tax that are currently NOT TAXED AT ALL!! For all of you neck-deep in the class warfare, you should be ecstatic to learn that all income shelters disappear and are wiped from the books. For people like me, I would dance for joy at the elimination of the IRS, who essentially would only be necessary to keep states in line as they collect tax receipts.
• ernest_t_bass

  

  15% flat tax rate, and that's it. Don't tax us on anything else. 15%. Take it right out of our pay, but stay away from income tax, property tax, sin tax, death tax, poop tax, real estate tax, tax tax, etc.
• O-Trap

  

  ernest_t_bass;749268 wrote:... poop tax ...

  TF?
• gut

  A pure consumption tax is simply not feasible. The most that can be effectively collected has shown to be about 19%, which is well short of revenue neutral plans. All of the OECD countries (with the exception of perhaps one or two small ones) with a VAT (consumption tax) still have personal and corporate income taxes. Yeah, it could work with a MASSIVE decrease in entitlements and other govt spending, but let's not pretend like that will ever happen.
  
  That said, some form of federal sales/consumption tax is likely part of any long-term budget/debt solution. Really just more of a "death by a thousand cuts" type scenario.
• O-Trap

  

  Budget hara kiri ... I like that idea. LOL!
• Al Bundy

  ernest_t_bass;749268 wrote:Take it right out of our pay, but stay away from income tax

  huh?
• derek bomar

  

  Al Bundy;749692 wrote:huh?

  
  lol...i thought the same thing
• O-Trap

  

  derek bomar;750228 wrote:lol...i thought the same thing

  
  As did I.
• gut

  ccrunner609;750286 wrote:link?
  
  
  THere is no doubt that a consumption tax would be a great way to produce revenue from EVERYONE in the country. No where to hide your money. You have to buy something sometime. When you add hundreds of millions into the system that are currently not participating in paying their fair share, tax revenues will increase.
  
  
  Since everyone knows that the prices of products we consume have already had all the corporate taxes passed along in the price of goods and services, when they also no longer pay those taxes, prices for goods and services will decrease. So tack on 23% taxes on all goods and services.........everything will likely still cost the same ammount as they do today.

  
  Try researching it yourself instead of accepting Fairtax propaganda as gospel. The fact they quote 23% instead of the more familiar "sales tax" calculation of 30% pretty much sums up where those guys are coming from. But google OEM VAT's...I believe the highest is around 19%, and they almost ALL still have corporate and personal income taxes. And the more obvious fact is, with all the changes in the tax code over the years, they STILL fairly consistently collect 16-19% of GDP.
  
  And it's complete bullshit to believe that the "Fairtax" can't be avoided and minimized. All kinds of potential problems with black markets, used goods, and all sorts of games that can be played with leases and lease backs. That's why most economists worth a damn think the real "exclusive" rate is north of 40%. There are maybe two noteable economists supporting Fairtax, and one of them (Kotlikoff) is really coming at it from a different angle and supports a consumption tax but not really Fairtax. That most noteable economists a good 3-4 years after that came out won't even bother to trash it pretty much says what a ginormous waste of paper that system is.
  
  Plus, if you think consumption tax is a great way to generate revenue from EVERYONE in the country, then you don't understand what FairTax is all about. One word: Prebates.
  
  I'll sum up my position in a few simple sentences. The main thing that complicates the tax code is the progressive nature and also the social goals to tweak levers to favor different groups of people (and corporations). Any system with the same underlying social/welfare goals will soon come to resemble the current code. Let's exclude these goods, let's exclude these people, let's adjust the rates on this basket of services....it's all crap, just like the current system. And the social/welfare goals are not in and of themself a bad thing (I don't oppose this)....we have a spending problem.
• ernest_t_bass

  

  Al Bundy;749692 wrote:huh?

  
  Oops. Mistype. Eyem hyoumin.
• ernest_t_bass

  

  O-Trap;750279 wrote:As did I.

  
  As did I?
• O-Trap

  

  ernest_t_bass;750314 wrote:As did I?

  
  orly?
• Cleveland Buck

  

  First of all, how many of the countries in their study eliminated all other taxes and still couldn't get more than 19%?
  
  Also, the reasons I like the idea of the Fair Tax or something similar have nothing to do with the amount of government revenue it would bring in. No matter what you do, how you tax, who you tax, or how much you tax, you will never bring in more than 16-20% of GDP in tax revenues. Federal spending needs to be severely slashed. The Fair Tax has nothing to do with that. I like the idea of taxing only consumption and nothing else because of the economic benefits it would present. No corporate income tax obviously makes this country more competitive globally. No capital gains tax encourages investment and would create a huge supply of money available for companies to expand. It could possibly discourage consumer spending a bit, although taking home a bigger paycheck probably negates most of that, but that is really only hurting the Chinese economy or Indian economy of whoever makes the shit that we buy anyway. People would be encouraged to earn money and invest money instead of being punished for those things.
• believer

  

  Fair Tax, consumption tax, or tweaking our current "progressive" income tax system there seems to be one common agreement here: CUT SPENDING.
  
  We DO NOT have a revenue stream issue regardless of type of revenue stream we decide is appropriate. We have a SPENDING issue. Period. End of story.
  
  I sincerely believe the morons in Washington - regardless of party or political slant - lack the courage. political will, and/or collective brain power to do what needs to be done.
  
  I know I've been chastised by some OC posters as being a doomsday proponent, but we are clearly headed for the same fate as the Soviet Union because the the twits running our government cannot seem to understand that income must equal outgo. Their standard response or solution is to raise taxes but that NEVER works because the increased taxes ALWAYS equates to even more SPENDING.
  
  STOP THE SPENDING. It really is that simple.
• gut

  ccrunner609;752141 wrote:oh and nobody plays the loophole in the current tax code now huh?

  
  Never said it doesn't. But the Fairtax fraud is that it wouldn't suffer the same problem (along with other similar issues), resulting in a rate that would be much higher than the 30% sales tax. The few comments from noteable economists you see usually zero in on that point and summarily dismiss it as a non-starter. Fairtax is a joke, but perhaps that is to be expected when it's the brainchild of a talk radio host and a dentist. Maybe Howard Stern and Dr. Phil can come up with a competing proposal.
• Bigdogg

  Here is what cutting taxes and spending foolishly on wars has got us. don't want to hear about the stimulis. It was needed and only contributed 6% of the problem.
  
  
  
  http://www.washingtonpost.com/business/economy/running-in-the-red-how-the-us-on-the-road-to-surplus-detoured-to-massive-debt/2011/04/28/AFFU7rNF_story.html?hpid=z1
• Bigdogg

  Here is what cutting taxes and spending foolishly on wars has got us. don't want to hear about the stimulis. It was needed and only contributed 6% of the problem.
  
  
• believer

  

  Bigdogg;755833 wrote:Here is what cutting taxes and spending foolishly on wars has got us. don't want to hear about the stimulis. It was needed and only contributed 6% of the problem.

  Actually the chart indicates tax cuts, NEW spending, 2 wars (now 3), and 2 recessions. But don't let the facts get in the way of your bias.
  
  Besides...The Washington Post? ok
• cruiser_96

  

  Does it have to be either/or?