• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

H R 115: the "fair tax"

Begging what question?

Is your Fair Tax a good thing?

Instead of presenting evidence of how it would affect various sectors of the population and the economy, you keep trying to "prove" it will do the good things you say it will by pointing to the post where you said it will do good things
 
How's that war on drugs going?

Do you think the government will treat violators the same?

The government has always been ruthless about getting tax dollars from people cheating the system.
 
Do you think the government will treat violators the same?

The government has always been ruthless about getting tax dollars from people cheating the system.

Are you kidding me? The IRS hardly audits anyone. Billions in cash transactions go untaxed. Then there are all the off shore accounts. I wish the government was ruthless.
 
Do you think the government will treat violators the same?

The government has always been ruthless about getting tax dollars from people cheating the system.

No, they havent. In fact, full audits have been decreasing for years.
 
Is your Fair Tax a good thing?

Instead of presenting evidence of how it would affect various sectors of the population and the economy, you keep trying to "prove" it will do the good things you say it will by pointing to the post where you said it will do good things
Sangha, You and I agree after one of the incremental steps of an incrementally enacting the Fair-tax, the sales tax will approach an unacceptable rate.
Respectfully, Supposn
Are you suggesting a VAT system replace income taxes and corporate taxes or that it be levied in addition to those taxes?
BlueLiner7, refer to
FICA tax proposal:
FICA is the most regressive federal tax. It’s particularly a burden upon the working poor and their dependents. ...
BlueLiner7, I'm a proponent of incrementally enacting the “Fair Tax”; each individual step would simultaneously reduce taxes upon incomes. increase a federal general sales tax rate, and enact additional provisions for the poor that would otherwise be detrimentally impacted.

After one of the incremental steps, the sales tax will approach an unacceptable rate. We will be unable to continue the transference of tax revenue sources. At that point we will have a sales tax and income taxes that are applicable to much fewer taxpayers.
Those with annual incomes somewhat less than USA's median income will not be subject to income taxes. Many USA states and foreign governments levy both taxes upon sales and upon incomes. Their are economic net advantages for doing this.

I advocate that the first incremental step should reduce our current FICA payroll taxes from 15.3% to 6.2%. the 9.1% taxes upon payrolls can be adequately replaced with a 4.55% general sales tax.
The 7.65% tax upon employees wages is so regressive that even if government made no additional provisions for the poor, this particular step would still be economically justified.

Respectfully, Supposn
 
No doubt.

That 23% would have to cover virtually everything: Goods and services, real estate, nearly everything. Basic foodstuffs could be exempted, as Lord of Planar suggests, but either the tax would have to cover things that most don't anticipate it covering, or the federal government would have to be cut way back.

And so far, any attempts to cut back the size and power of the federal government have gone nowhere.
Dittohead not!, to the extent that general sales taxes are waived upon sales of products that are more often or in greater quantities consumed or used per capita by lower income persons, or upon capped monthly amounts of such utility service products sold and delivered to individual residences, a flat general sales tax is transformed to that extent be a more progressive sales tax.

My opinion is medicine, or food other than that supplied by restaurants, or caterers, not be subject to the general sales tax.
If we could draft a law that would not tax mass transportation but would not waive taxes upon long distance or luxury travel, I would prefer such transactions not be taxed.

It's difficult to draft legislation the parses ordinary and luxury priced products, I’d want much fewer waivers of sales taxes on classes of products.
In our computer age. that’s much less of a problem for products that can be associated with a primary residence.
We can waive taxes on monthly capped values of dollars and/or units of utility products associated with a specific primary residence. Where the caps are dollars, those dollars should be annually cost-of-living-adjusted, (i.e. COLA'd). This can be applied to such basic products as rent, gas, electric, water, or sewage service. These are utility services delivered to homes by cables or pipes can and usually are monitored.

General sales taxes greatest faults are their inability to waive taxes upon the unemployed poor. But there’s a limit to what’s feasible. An enterprise may not be able to pass on expenses they incurred that are not similarly incurred by their competitors. For example, they’d be unable to pass on an uninsured lawsuit loss that far exceeds their profit margin and net income. But otherwise, enterprises entire expenses are generally passed on to their customers; This is no less true when the poor are among those customers.

Respectfully, Supposn
 
Lord of Planar, a sales tax is a consumption tax and value-added tax, (i.e. VAT) is the superior method of administering a general sales tax. I'm aware of no disadvantage, but only of VAT's advantages to all previous conventional methods of administrating a general sales tax.
Refer to the thread:
https://www.debatepolitics.com/economics/295404-value-added-tax-vat.html#post1067594487

Respectfully, Supposn

Trust me, I understand the difference.

the consumption tax applied only at final sale will help us in world trade. A VAT will not.
 
Dittohead not!, to the extent that general sales taxes are waived upon sales of products that are more often or in greater quantities consumed or used per capita by lower income persons, or upon capped monthly amounts of such utility service products sold and delivered to individual residences, a flat general sales tax is transformed to that extent be a more progressive sales tax.

My opinion is medicine, or food other than that supplied by restaurants, or caterers, not be subject to the general sales tax.
If we could draft a law that would not tax mass transportation but would not waive taxes upon long distance or luxury travel, I would prefer such transactions not be taxed.

It's difficult to draft legislation the parses ordinary and luxury priced products, I’d want much fewer waivers of sales taxes on classes of products.
In our computer age. that’s much less of a problem for products that can be associated with a primary residence.
We can waive taxes on monthly capped values of dollars and/or units of utility products associated with a specific primary residence. Where the caps are dollars, those dollars should be annually cost-of-living-adjusted, (i.e. COLA'd). This can be applied to such basic products as rent, gas, electric, water, or sewage service. These are utility services delivered to homes by cables or pipes can and usually are monitored.

General sales taxes greatest faults are their inability to waive taxes upon the unemployed poor. But there’s a limit to what’s feasible. An enterprise may not be able to pass on expenses they incurred that are not similarly incurred by their competitors. For example, they’d be unable to pass on an uninsured lawsuit loss that far exceeds their profit margin and net income. But otherwise, enterprises entire expenses are generally passed on to their customers; This is no less true when the poor are among those customers.

Respectfully, Supposn

The thing is, the federal government currently consumes about 21% of the GDP. If a national sales tax were to raise enough to keep the government in the black, then that's what the tax would have to average. The more goods and services that are exempted from the tax, the higher it has to be on other things. 23% isn't going to be enough unless only a few items are left untaxed, or

unless the size of the federal government is cut back.
 
The thing is, the federal government currently consumes about 21% of the GDP. If a national sales tax were to raise enough to keep the government in the black, then that's what the tax would have to average. The more goods and services that are exempted from the tax, the higher it has to be on other things. 23% isn't going to be enough unless only a few items are left untaxed, or

unless the size of the federal government is cut back.

Well, going to a consumption tax or national sales tax would eliminate most duties of the IRS, shrinking that part of the government.
 
The rich LOVE the idea of a flat tax.....ask yourself why
 
Trust me, I understand the difference.

the consumption tax applied only at final sale will help us in world trade. A VAT will not.

Lord of Planar, you're aware of taxes embedded within products prices. That's why governments generally attempt to waive their taxes upon products exported beyond their jurisdictions.
But apparently you're not aware of the differences between VAT and the prior conventional sales tax methods.

Intermediate participants within each link of a VAT chains of transactions, reduces the Vat they pass on to the government by their VAT expenditures. This reduces their cash-flow problems, and motivation for intermediate links' sellers to not account for all of their sales, and that's less lose of tax revenue due to fraud.

The federal government cannot determine the total taxes embedded within USA's exported products (prior to the last link of that product's commercial transaction chain. Thus, the federal USA cannot now enable the wiving of all local, state, and federal taxes embedded within USA's exports. To the extent that we should be able to do so, we could better enable our exported products to be more price competitive.
A major advantage of the value-added tax, (i.e. VAT) is the VAT levied at any link of the VAT chain of transactions is the entire VATs levied upon that product within that link in the chain. This better enable the European Common Market to function as products pass through various national boundaries.

Currently, exports that do not effectively pay anything similar to a federal tariff when reaching USA's entry ports, contribute nothing to USA's tax revenues and all competing USA producers are required to pay USA taxes levied upon them. Importers of USA products into foreign nations, fully contribute the sales taxes levied upon those products full value. USA products are not permitted a tax advantage over the foreign nation's competing products.

Respectfully, Supposn
 
Well, going to a consumption tax or national sales tax would eliminate most duties of the IRS, shrinking that part of the government.
Lord of Planar, many governments have both a sales tax, (which beyond USA's borders is likely to be a value-added tax), and an income tax. The reason that collection and compliance expenses and efforts are not of great increased costs for both as opposed to only one of the taxes is due to their shared use of commonly required data and tasks.

To the extent that income tax rates are reduced and replaced by increased sales tax rates, the numbers of individuals subject to income taxpayers are also reduced. The reduction will always be from the lowest income bracket of income taxpayers. Income tax collection costs per capita are less for lesser income earners. Although much fewer persons will be pay federal income tax, this will not be the significant reduction of IRS's collection costs and pervasiveness that fair-tax proponents are hoping for.

The replacing sales tax will be collected by all commercial enterprises. To the extent any extent that reductions of income tax rates better enable simpler tax regulations, it will also enable some reduction of income taxpayers' compliance costs and efforts. There will not be any significant reduction of of IRS's collection costs and efforts. Only the smallest enterprises will perceive significantly less IRS intervention.

Respectfully, Supposn
 
Well, going to a consumption tax or national sales tax would eliminate most duties of the IRS, shrinking that part of the government.

Unlikely as an even larger part of the economy would go underground.

Small businesses who might like to be paid in cash will likely have many more willing customers to pay in cash and get no receipt.
 
Unlikely as an even larger part of the economy would go underground.

Small businesses who might like to be paid in cash will likely have many more willing customers to pay in cash and get no receipt.

Maybe not. The IRS, or Treasury, or whoever audits you, will be looking at what you've bought and the inventory you're keeping at least as much as what you've claimed to have sold.
 
Maybe not. The IRS, or Treasury, or whoever audits you, will be looking at what you've bought and the inventory you're keeping at least as much as what you've claimed to have sold.

Which means the IRS probably can't shrink as most people think it could with a sales tax
 
Which means the IRS probably can't shrink as most people think it could with a sales tax

Once again, maybe. I think it would depend on how much oversight was needed. If the tax code were simplified enough possibly Treasury could handle it without having to maintain the IRS.
 
Which means the IRS probably can't shrink as most people think it could with a sales tax
Once again, maybe. I think it would depend on how much oversight was needed. If the tax code were simplified enough possibly Treasury could handle it without having to maintain the IRS.
Refer to post #67. Respectfully, Supposn
 
Which is the problem. Every proposal for a national sales tax that I have ever seen starts with the rate then lists the exemptions. The poor, the kiddies, the elderly, then Johnny down at the convenience store.

Like the flat tax, the NST will only work if no exemptions are allowed, ever. Which will not work since the poor , the kiddies, the elderly, and Johnny cannot possibly be expected to pay the tax.

BTW, who specifically in Congress is considering this? I find nothing with a quick Google, although the idea surfaces fairly often.

The only difference is that no one pays taxes up to a certain amount.
For me I would actually see a flat tax of 10%/20%

you don't pay income tax up to 25k for single and 40k for family across the board.
 
The only difference is that no one pays taxes up to a certain amount.
For me I would actually see a flat tax of 10%/20%

you don't pay income tax up to 25k for single and 40k for family across the board.

They don't pay income taxes. Payroll taxes are more than 10%, and go to the "general fund" just like income taxes do.
 
Back
Top Bottom