Just asking why and why not?
Just asking why and why not?
Just asking why and why not?
I vote not. First, it would raise the burden on everyone and disincentive consumption. Second, because a tax would have to be extremely high, to the point that it would be regressive and actually hurt the poorest in society. That means such a tax would place the burden paying for the social safety net on those who use the social safety net. Thus it would largely eliminate the benefit of a social safety net.
It's not unlike paying for foodstamps by placing a sales tax on food.
Unlikely, since it is the most regressive form of taxation possible.
Just asking why and why not?
Its flat. The rate stays the same regardless of the value of the thing being taxed.
I vote not. First, it would raise the burden on everyone and disincentive consumption. Second, because a tax would have to be extremely high, to the point that it would be regressive and actually hurt the poorest in society. That means such a tax would place the burden paying for the social safety net on those who use the social safety net. Thus it would largely eliminate the benefit of a social safety net.
It's not unlike paying for foodstamps by placing a sales tax on food.
It would be flat, not regressive, and much like how income taxes dont significantly disincentive work, it wont disincentive consumption. Florida is funded by a sales tax and nobody has stopped buying stuff. And the poor would likely still be opted out of really paying for it as they dont pay income tax now. As with any tax, the rich will pay a disproportionate amount of tax.
Furthermore its not a social safety net. Its a retirement benefit. You pay taxes for it and you are entitled to the benefit when you retire. People who do not pay for SS or Medicare tax can not get it.
Those with lower incomes spend a greater portion (percentage) of their meager incomes on taxable items. That is why most such flat (fair?) tax proposals include a "prebate".
Another issue, noted above, is that it removes any record of past contributions on which to base individual SS retirement benefits.
Sales taxes are regressive.. not flat. and it does disincentive consumption. and the rich will pay a disproportionate amount of sales tax because we will pay less than the poor and middle class.
And SS is a social safety net.. its not a retirement benefit.
SS and Medicare/Medicaid are already set up through payroll taxes so Im not sure what the incentive to chnge would be. If people really want Medicare for all, the funding mechanism is already in place. Just raise the withholding on everyone and viola, free healthcare.
Sales taxes are flat. Everyone pays the same rate on the same purchase. A progressive tax would increase the rate as the value increased, such as the income tax. A regressive tax would decrease the rate as the value increased.
And SS is not a social safety net. See above about why.
Well one reason would be to turn it into a real wealth redistribution system, making everyone pay for a system only some use, and making the rich pay a greater share of it. The rich dont need SS or medicare. Thus they pay for a system that doesnt really benefit them. And since they earn the most income, they pay the most payroll tax.
Its still a flat rate though. Everyone pays the same rate on the same purchase. As you say, the poor would likely still pay no tax in the end due to a prebate or exemption. But you dont need to remove the record of contribution (income actually). SS isnt based on how much tax you pay but rather how much income you make while paying it. Medicare just requires you pay anything for a certain number of years.
Sales taxes are flat. Everyone pays the same rate on the same purchase. A progressive tax would increase the rate as the value increased, such as the income tax. A regressive tax would decrease the rate as the value increased.
And SS is not a social safety net. See above about why.
Another problem is that retirees would then also pay the national sales tax.
Why would we consider it?
Sales taxes are regressive.. not flat. and it does disincentive consumption. and the rich will pay a disproportionate amount of sales tax because we will pay less than the poor and middle class.
And SS is a social safety net.. its not a retirement benefit.
What would happen if there was a sales tax on stocks?
Interesting. Probably not much since there is already somewhat of a "sales tax".. like process called a commission (most usually based on the amount of the trade).
A commission is going to the Wall street house as a handling fee. A sales tax, lets say 1%, would go into the federal coffers as a revenue generator.
Just an idea that most rich people would probably agree too. Wall Street would not like it because volume would go down and their ability to buy and sell assets very quickly would disappear. I personally can deal with watching Wall Street suffer just a bit.
It would be flat, not regressive, and much like how income taxes dont significantly disincentive work, it wont disincentive consumption. Florida is funded by a sales tax and nobody has stopped buying stuff. And the poor would likely still be opted out of really paying for it as they dont pay income tax now. As with any tax, the rich will pay a disproportionate amount of tax.
Furthermore its not a social safety net. Its a retirement benefit. You pay taxes for it and you are entitled to the benefit when you retire. People who do not pay for SS or Medicare tax can not get it.