Bush Says National Sales Tax Worth Considering

[Rose Siding]

NICEVILLE, Fla. (Reuters) - President Bush (news - web sites) said on Tuesday that abolishing the U.S. income tax system and replacing it with a national sales tax was an idea worth considering.


"It's an interesting idea," Bush told an "Ask President Bush" campaign forum here. "You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously."


Republican economists who speak regularly to the White House have said that the Bush campaign has been mulling the idea of an overhaul of the tax code as part of an agenda for a second term should Bush win reelection.

http://story.news.yahoo.com/news?tmpl=story2&u=/nm/20040811/pl_nm/campaign_bush_taxes_dc

[BayCityProgressive]

1. What exactly would this do?

could this be good if administered correctly? It seems like a lot of the rich and big business keep money overseas...if this happened they would be forced to pay taxes on everythign they bought...or would this stack the deck against lower income americans who pay low income taxes?

[Wwagsthedog]

4. Sales taxes are a pure form of regressive taxation

Just like gasoline taxes, flat taxes, you name it. A progressive income tax and estate taxes are much more equitable than anything the right wing comes up with to make the vast majority subservient to their wealth. End of rant.

[arwalden]

63. National Sales Tax And "Flat-Rate" Tax Is A Horrible Idea...

that benefits the wealthy.

The idea is sold to the public on the premise that the rich spend as much as they earn. But that's not the case. Yet the poor DO spend as much as they earn... hand-to-mouth... paycheck-to-paycheck.

-- Allen

[jdj]

77. Not to mention that they don't "earn" it anyway, not by the sweat

of their brow, and not to mention that they "earn" interest in obscene amounts on money that sits in banks.

I'm actually glad Bush is saying stuff like this. Because it's wonderful that they are letting their true agenda show.

[hughee99]

97. I'm not in favor of this proposal

I think it will hurt the poor and the economy in general, but I do take some issue with the fact that "the rich" don't "earn money by the sweat of their brow". I'm not saying that all rich people work hard for a living, but some do. I would say that someone making $50 million a year, probably doesn't do $50 million worth of work, but I do believe that someone who makes $200K a year (rich by most standards) can perform $200K worth of work.

[Doctor Smith]

20. It would double tax anyone with savings they have

already paid income taxes on, such as retirees.

[daa]

58. Thank you , thank you , thank you

I am so pleased that someone else has pointed this out. I live in John Linder's district and he is the one behind this but he NEVER addresses this issue. People that postponed consumption, like saving a vacation for retirement would now pay the 23% tax. Pure BS.

[lostnfound]

28. Businesses won't be forced to pay taxes on everything they buy.

Anything that goes into their products for sale is not taxed...
I.e., when a publisher buys paper, they wouldn't need to pay sales tax on it since the paper was being used to make the end item.

Further, if a business spends $100 on a box of paper and DOES pay sales tax, it's a $108 expense that's deductible from their P&L sheet and not subject to income tax. If you or I buy a box of paper, we use after-tax income to pay for it, so we've paid sales tax and income tax -- in a 20% tax bracket it's like a $130 expense.

Also there's tons of special exemptions for specific industries.

[0007]

55. So then all advisement would be a write off also, 'eh?

So big corporations would have more CEO's and vice presidents.

[Spiffarino]

2. Brilliant!

So much for a squeaker...it should be a landslide for Kerry-Edwards.

[Sparkly]

3. Complete & total REgressive tax

The percentage of taxes paid related to income would then be miniscule for the rich, and enormous for the poor.

Of course, the poor can just "do without" and avoid paying taxes....

I can't believe he even said this.

[ramapo]

9. Poor get screwed, rich win big

National sales tax of 4%. Top tax bracket goes from ~36% to 4%. Bottom bracket goes from 0% to 4%. Who wins here?

[The Magistrate]

22. Except, Sir

The rate would have to be around fifteen to twenty percent. This would, of course, be in addition to state and local sales taxes, so that most people would be paying roughly a quarter tax on each dollar of purchase. The havoc it would wreak on economic activity would be horrendous. Since the lower a person's income, the greater the proportion of it spent, this would prove an absurdly refressive tax structure, in which the poorer you were, the greater the portion of your income you paid out in taxes.

"LET'S GO GET THOSE BUSH BASTARDS!"

[LiberalFighter]

42. I believe it would be at least 17%

[flaminbats]

47. depends if deficit spending, Social Security, and Medicare are factored in

Remember that many Republicans wish to abolish all income taxes, payroll taxes, corporate taxes, tariffs on other countries, the gasoline tax, fees and fines for breaking environmental laws, the inheritance tax, user fees, the capital gains tax, the alternative minimum tax, alcohol taxes, cigarette taxes, and every conceivable energy tax. So how high would this national sales tax be with and without the state sales taxes?

Then imagine trying to raise revenue from just one type of taxpaying consumer, the middle to lower classes..in one sector of the economy. The rich could avoid paying the national sales tax, and simply stock up. But the backbone of the American economy would be destroyed if feds merely depended on one tax. This strategy would not only put our nation into another depression, but it would also result in the permanent devaluation of our currency.

A revolutionary thing the New Deal did to make America the most powerful nation on Earth was to introduce diversity into the tax code. This enabled policymakers to raise revenue for important programs, without placing the entire cost of these programs on a single group or class of people. Thus policy makers could always raise a different low tax on one group, without raising other taxes on groups already struggling to get by. This may result in some double taxation, but even the total percentage is lower for most consumers.

In sum...Kerry could propose a sales tax of 1%, and after Bush introduces his tax..make the argument that the Kerry tax proposal is lower for more people than Bush's 27% sales tax increase! The neocons never mention that this is not a flat rate, it is an increasing percentage the less you make. That means a poor person may pay 50% of his income in state and federal sales tax, while a millionare pays only 5%..

[jdj]

79. I also think the rich would and do have their own economy

when they want to avoid taxes, a barter system between themselves,and then they write off the losses, which the poor can't do, because they have nothing to barter.

[flaminbats]

82. no one can escape the IRS or the high cost of evading taxes..

and no one should. After working for a CPA, I know rich people wouldn't be whining and crying if they didn't pay more in taxes. Can they dodge them? Sure..if they want to spend even more outsourcing, retraining illegal immigrants, or purchase the new equipment for an overseas operation...

What...there was no net gain? That damned IRS!!! :cry:

[LiberalFighter]

102. Based on the other taxes mentioned...

it would have to be substantially higher than 17%

[gatlingforme]

56. nicely said, and Hastert would be the front man for this BS agenda

[TahitiNut]

65. Indeed, a sales or excise tax rate on the unemployed is INFINITE.

There are, in effect, three kinds of taxation: a tax on income, a tax on property, and a tax on consumption. (Only the tax on property is not transaction-based.)

There are two kinds of income: earned (from labor) and unearned (royalties, dividends, interest, capital gains, and inheritance).

There are three kinds of property: personal (residence, goods), commercial (plant, equipment, rentals, etc.), capital (e.g. bonds, notes, collectibles).

Transactional consumption taxes (and 'fees') are of three kinds: sales, excise, and use. The goods and services so-taxed range across a broad spectrum from the ubiquitous basics of food, shelter, and clothing through health care and transportation to 'collectibles' and other (presumptively) income-producing goods and services.

There are two general rationalizations (equity 'theories') for any particular kind of taxation: 'ability to pay' and the beneficial 'fee for use' service-based rationale. In my view, the former is merely a second-order representation of the latter, since one's (increased or decreased) ability to pay is a de facto representation of the degree to which one has been benefited from the institutions of government, institutions which overwhelmingly serve the accumulation of wealth at an increasing rate and serve to protect and defend individual "life, liberty, and pursuit of happiness" to a lesser and lesser extent.

An "income" tax is an interesting view of an economic transaction insofar as it is a one-sided view of some kinds of exchange. Why is it not viewed as a "sale" and taxed equivalently? Why, for example, is the "selling" of whatever god-given allotment of the time one lives and the abilities one possesses taxed at rates that are up to an order of magnitude greater than some tangible items such as a Game-Boy?


In my view, quite possibly the most equitable tax under both views (ability and benefit) is the estate or inheritance tax (the so-called "death tax"). The dead have the greatest 'ability' to pay insofar as their need for such wealth has become zero. They have no further 'right' to life, liberty, or the pursuit of happiness! Yet this tax is currently the least, with the possible exception of unrealized capital gains. That any person has accumulated wealth so far in excess of their own individual needs that substantial value remains at the end of their life is testimony to the extremes of both 'ability to pay' and 'benefit.'

Our popular views regarding 'corporate' taxes seem to be obscenely skewed by the legal ambivalence on the inherent nature of a corporation. Is it a person or is it property? The mere rhetorical equivalence in nominating some corporate taxes as 'income' taxes in the same fashion as taxes on individual wages and salaries tends to amplify the fiction of corporation-as-person.

In my view, the least equitable tax is the tax on earned income, particularly given the lower rate assessed on unearned income and the obscene preferences given to taxation on the income accrued by one particular class of property: the corporation.

The next least equitable tax are sales and excise taxes paid by consumers, particularly for those services and goods that serve basic individual rights to life, liberty, and pursuit of happiness.

Insofar as any notion of a 'flat tax' in income is concerned, I see absolutely no equity in it ... especially when the 'income' produced by the death of another isn't taxed at all, and property (i.e. a corporation) can accrue income up to the amount outgo tax-free, while a human being cannot, even to the degree needed to eat and obtain medications.

[jdj]

80. Thanks, well put.

"the income produced by the death of another" that is very succinct, and I definitely could not have said it better that the dead have the most ability to pay.

[TahitiNut]

85. When someone says "death tax" the response should be "death profits"

It's obscene that this outright fraud has been allowed to persist.

[The Magistrate]

87. Some Points About Estate Taxes, Mr. Nut

Estate taxes are really a transaction tax, for the handing over of capital from the deceased to the heir is certainly a transaction, and thus this tax is more akin to a sales tax than anything else. Taxes on capital transactions have long been the prefered means of taxing capital, because it is only at the point of transaction where its value can be readily agreed on by all parties. A merchant with a circulating capital, or a financier with a portfolio of loans, or a person owning real estate or a functioning business, cannot really say with honesty precisely what these things are worth at any given moment, but only make a guess within the bounds of human judgement. It is only when a capital's value is fixed by the agreement of a seller and a buyer, or direction of it brought to a halt by death of its operator, that its value can be agreed on precisely, and so it is only at that point that a tax on it can operate with any justice. Further, it is at that point that it is most convenient for the persons owing the tax to pay it, as the capital is all under their hand.

Estate taxes, as drawn in this country, have never afected more than a very small proportion of the population. That their abolition has acquired in any degree the character of a popular cause is extraordinary, and the result of a concerted and scurrillous campaign of propaganda. Estate taxes are indeed a principal prop of what most of us consider the American system; a society without a firmly entrenched aristocracy of inherited wealth and privilege. The most distressing of current social developments is precisely the rise of such an aristocracy, and the solidification by law of its privileges. The increasing disparities of wealth we are witnessuing today will indeed in future come to destroy the social order we all cherish, for liberty and democratic rule are impossible in a society where only a tiny fraction of the population controls its wealth, and can be assured of passing this down to its heirs, while the overwhelming majority of the people possess a mere pittance by compare, or possess nothing at all. Such disparities can, in the long run, only be maintained by violence and repression in a degree that must destroy any liberty or system that could be honestly called peoples rule. Those campaigning for abolition of estate taxes are, in fact, the most profoundly anti-American and subversive forces ever to rear their heads in our polity, and their aim is nothing less than the destruction of the country we all know and love.

"The laboring class is of necessity the largest proportion of society, and it is nonsense to assert that what benefits the greatest numnber can be injurious to the whole."

"LET'S GO GET THOSE BUSH BASTARDS!"

[TahitiNut]

88. Agreed and amen ... with one observation.

While an estate tax may a kind of 'transaction' tax, it's somewhat unique insofar as there's no offsetting exchange - no quid pro quo. When I exchange cash for a product or service, it's two-way. When I exchange labor for pay, it's two-way. There is no such exchange in inheritance. In inheritance, titled wealth is orphaned. In essence, it's an anachronism: a holdover from the days of autocrats (i.e. monarchs). The property or 'estate' is a legal fiction - an entitlement which could not even begin to exist in the absence of a government which conferred and supported the title to such wealth. Inheritance of an 'estate' is purely a fiction of the state.

"The laboring class is of necessity the largest proportion of society, and it is nonsense to assert that what benefits the greatest number can be injurious to the whole."

Indeed. We've now created a system wherein labor, which creates all wealth, is the most burdened and the least advantaged by it's own innate value. We've adopted antebellum plantation economic principles and are a banana (un)republic.

[The Magistrate]

89. That Is True, My Friend

Although one might say the exchange is the death of a loved one; most people would surely exchange the wealth received for continued presence of a beloved parent, were that possible. But you are quite right in economic terms. The similarity lies in the passage of the capital goods from one hand to another only, and the opportunity to fix its value at a particular moment.

The quotation is from Mr. Smith in "Wealth of Nations", which certainly repays close reading: he is rather more on our side than not, and those on the right who cite him generally do so in ignorance. The point you make about the primacy of labor over capital is one of long and excellent standing in our own county's political thought. Mr. Lincoln insisted on it frequently.

"LET'S GO GET THOSE BUSH BASTARDS!"

[indypaul]

96. And the federal deficit should be referred

as the "birth tax."

[LiberalFighter]

101. What supporters of eliminating the "death tax" argue is that

it was already taxed and shouldn't be taxed again.

The problem I see is that it wasn't their money and they didn't EARN the income. They didn't provide labor or other tangible worth that produce the income for the deceased and if they did then they would have access to the courts if they had not received proper compensation.

[TahitiNut]

104. Well, it's not only FALSE, it's fallacious.

Unrealized capital gains in an estate have NEVER been taxed, and they're not taxed even when sold by the inheritor, since the basis (for calculating gains) is reset at the time the estate is formed.

Next, by the same drain-bamaged "reasoning", I shouldn't have to pay sales tax, excise tax, income tax (on the first $80K), or property tax with money that I get that's already been taxed. Furthermore, nobody I personally hire should then be taxed on what I pay them, since I'd be paying them from "money that's already taxed.".


Look ...

If I work for Uncle Gotrocks for $1M/year, I'll be paying about 35% in income tax. (I also paid in blood, sweat, and tears.)

If I sell stock in Uncle Gotrocks' company for $1M more than I bought it for, I'll pay about 18% in capital gains tax. (I also had to pay for the stock and assume some risk.)

If Uncle GotRocks dies and leaves me $1M, I pay no taxes. (I didn't do shit ... not even rub his feet.)


In other words, the income that requires the least from me is taxed the least. That's just fucking nuts.

[SharonAnn]

23. Top bracket would be less than 4% since the rich don't spend

all their money on taxable, purchased "things".

They save, invest, and have financial managers re-arrange the transaction so that it's not taxable.

Rich would pay nothing, poor and middle class would pay horrendous amount and pay for the entire government. But only the rich would be benifitting form the government services because anything the poor and middle-class need in services would have to beeliminated or the taxes on them would be even worse.

All rich people think that a national sales tax would be good, or a "flat tax", or a VAT (Value Added Tax). Why do you suppose that is? Would it have anything to do with eliminating or at least significantly reducing their tax burden and shifting it to lower incomes?

[TahitiNut]

76. And many 'small business' owners pay even less.

I know about a small business owner who makes purchases of family items under a sales-tax exemption for small business. Not only do such items show up as 'business expenses' and not as personal income, but they're made without being subject to sales taxes. "Office supplies" become school supplies. Company vehicles are used for ferrying the kids to soccer practice and to and from school (the bus just ain't good enough for their kids).

It's my clear impression that such practices are widespread and egregious.

[jdj]

81. yes, absolutely

I work at one of these "small businesses" and these people, who are BAC's (Born Again Christians) utterly revile me. They play xtian music on their answering machine, the message on which ends with "have a blessed day", they hire everyone out of their church (except me), and they give out the "Shepherds Book" a listing of xtian owned businesses. But their attitude toward their employees is utterly reprehensible, and that SUV the wife drives is a write-off, as is his truck and the other six business vehicles. He never gives raises, makes his 4 full time employees pay out the nose for health insurance (the other 90 odd employees are all part-time), yet keeps a humongous bass boat in the warehous, and keeps his $45,000 Cadillac parked at work most of the time too. I am so sick of hearing about the poor small business owner.

[TahitiNut]

10. The wealthy already pay taxes at a lower rate than the working poor.

By about 4 percentage points. When I worked it out using IRS and CTJ data, it came out to about 38% for people with incomes over $250K and about 42% for people with incomes from about $10K to $80K.

People focus on the federal income tax and blithely dismiss payroll taxes, state and local income taxes (which are often flat), sales taxes, excise taxes (gas anyone?), property taxes, and the pass-thru distribution of various corporate taxes (FIT being the least regressive since profits accrue mostly to the wealthy).

[The Magistrate]

27. Indeed, Mr. Nut

The passing on of taxes is a factor that generally goes unremarked. It does not surprise me you have mentioned it, but the point deserves some hammering home. Taxes by no means always fall on those they seem to be levied against. A landlord, for example, does not pay property taxes, the tenants do; they are part of the charge in the rent, and without them, the rent might be lower. No business ever pays taxes on its trade; its customers pay them, they are part of the price of goods and services. Mr. Smith in "Wealth of Nations" pushes this understanding to the point of avowing that wage-earners do not pay taxes, but rather their employers do, for these simply advance that sum to the wage-earner from whom the state collects it, and if the state did not do so, the employer surely would reduce the wage by a similar amount, and might also reduce prices similarly.

One item overlooked in discussion of sales tax is that it converts every merchant into a revenue official, who must collect, hold in trust, and turn over sums to the state, and further, that this labor is conscripted, for the merchant receives no recompense for it, but is exposed by it to a good deal of vexation by way of raising effective prices, record-keeping, and the inspection of records for signs of malfeasance in the matter. Where the sums involved are only a few percent, there is only a minor temptation, but if the amount involved is a fifth or a quarter of the purchase price, then it is certain that a good many merchants will be tempted into peculation with these funds, and that a tremendous swarm of revenue officials must arise to police this tendency. Rather than occassionally auditing income tax returns, the revenue service must turn to a continual inquisition of every business operating in the land....

"LET'S GO GET THOSE BUSH BASTARDS!"

[TahitiNut]

39. I view today's corporation as a wealth redistribution system.

It converts labor (from which all wealth is created) into a product or service and distributes the gross revenues received therefrom according to some allocation scheme. By far, the already-wealthiest receive the highest proportional share, whether they be owners or owners' agents (executive management). These are not workers.

Thus, while customers certainly pay the taxes, I believe the salient question (in terms of the effect on the distributees) isn't (imho) merely a scrutiny of 'taxes' in general, but of what kind of tax, on what, for what, and at what rate.

I've been casually toying with the notion that a tax rate on a corporation's profits might best be made to match some function of the Gini coefficient of the wages and salaries paid by that corporation. (I also believe executive management should be compensated after-tax, as agents/avatars of the owners.)

[TahitiNut]

71. Let me add to this.

In my view, a 'corporation' is property. When a corporation has a 'net operating profit' (operating income greater than operating expenses), I view that (for all intents and purposes) as a capital improvement to that property, one for which no equity in that property is obtained by those making the capital improvement.

Let's say my house is a 'corporation.' As the owner, any investments I make which increase its value are called capital improvements for the purposes of reducing my capital gains when I dispose of it. But I cannot make such investments without first realizing some income (and paying the appropirate taxes on that realization) with which I can make such investments.

I see a corporation similarly. In my view, all net operating profits and losses should be both recognized and legally realized by the owners of that property, and taxed equitably before being reinvested or deployed for other equity machinations. The notion that capital transactions can be conducted tax-free within the elastic 'boundaries' of one piece of property (again, the corporation) and not within another (i.e. my home) is inequitable and insane under any reasonable view of 'justice.'

A corporation, when treated as a person, has a now almost unlimited 'life,' far more unbounded 'liberty,' and 'happiness' solely akin to greed - like a cancer. Where's the equity?

[LiberalFighter]

43. Totally agree!!

I have been stating over and over to people that businesses do not pay taxes. It is the consumer or customer that pays.

[teryang]

53. "A good many merchants will be tempted...."

If you know many small merchants, temptation isn't the word, they have to cheat to make a living. In many cases for smallest businesses, other than stock in kind, taxes are their single largest cost. Sales taxes, ad valorem taxes, special excise taxes on certain goods, payroll taxes. Add them up. It hurts. When I owned a small business, I literally had to operate from 10 to 14 days a month just to pay taxes.

[Cha]

5. Ain't gonna happen! We do not have that particular

hell to look forward to.

Maybe they should "explore" stem cell research, too. You never know.

[iconoclastic cat]

6. "Read Dad's lips!"

No, Count Chimpula, read this finger.

[iamjoy]

7. OMG!

Some people think this sounds good. They don't think it through.
On the surface, it sounds good. Taxes are just way too complicated now. Also, a sales tax would seem to encourage saving and investing. It wouldn't really hurt the poor because the poor don't spend as much as the rich, right?

Problem 1 - The very poor don't currently pay income taxes (payroll taxes, yes) so they would be disproportionately affected by this. Even if most groceries and medications were exempt, it would still hurt.

Problem 2 - What about exemptions? We have seen this with state sales taxes. Different industries, businesses, etc get their product/service tax exempt. For example, in Florida there is no tax on a sky box, but there is on a general admission ticket. Such exemptions would be likely to further favor the rich as they are the ones with the most powerful lobbyists.

Okay - you'll say absolutely no exemptions. Then absoultely no pass! The tax attorneys, accountants etc. will fight with their lives to kill it (because it could put them out of business.) Which could actually help us....

[Rose Siding]

11. Repub Bruce Bartlett writes about it here

...unfavorably:

snip>
Economist Bill Gale of the Brookings Institution notes that supporters of the sales tax assume that there will be no tax evasion under their proposal and that the size of government will not grow, even though they would send a large annual check to every American in order to offset the regressivity of the tax. Making realistic assumptions, Mr. Gale estimates that the tax-inclusive rate, comparable to Linder’s proposed 23 percent rate, would actually have to be about 50 percent. A rate comparable to existing sales taxes would be close to 100 percent......and more.....

http://www.ncpa.org/edo/bb/2004/20040809bb.htm

[TexasBushwhacker]

13. The one thing about a national sales tax ....

is that is would tax the underground economy. The drug dealers, the people working for cash who under-report their income (or don't report it at all), etc. I do understand the regressive qualities it has, although I think those could be dealt with by the proper exemptions. If groceries weren't taxed, that would encourage people to prepare their meals at home rather than stopping by McDonald's. However, if I was the owner of anything like a restaurant, bar, entertainment venue, bookstore, even a clothing retailer I would NOT want a national sales tax. Anything that makes people go "Yikes" when they spend their discretionary income would hurt these businesses, especially the ones that sell cheaper items. The rich will still spend $100 on a meal at a fancy restaurant, still buy their fancy cars and expensive clothes.

[Baltimoreboy]

16. I think you are entirely right

The Yikes factor is huge.

What they really want is to kill off most of the IRS and this is just one way. Mark my words, some form of flat tax is the big idea here.

[northzax]

36. but in many ways

the underground economy would stay even more underground, at the rates we would need to make a difference. There would be merchants who wouldn't charge the tax, and do everything illegally. why not?

[iamjoy]

106. You Mean "Free Traders"

Yes, you'd see a lot of smuggling. Legal products sold illegally.

[Barret]

48. Uh huh

So let me get this right... Drug dealers don't report the income they make off of drug sales, but if we have a sales tax they will charge the sales tax on the next crack shipment?

Seems like the talking points need to be revised...

[TexasBushwhacker]

90. No drug dealers would PAY sales tax

on what they spend their ill gotten income on.

[LiberalFighter]

44. Keep in mind that when "poor don't pay taxes" that...

the amount that is exempt from taxes is the same amount that everyone is exempted.

Everyone gets the same amount of deductions based on the size of their family and their filing status. Once those deductions are made for number in household, blind, and other deductions available to everyone the amount that is taxable begins.

And yes, the poor will pay higher taxes because almost everything they earn is used for services and goods.

[The Magistrate]

83. Keep In Mind Even More, Sir

That that ludicrous canard is based on a semantic slight of hand, in which the word "income" is dropped from "income taxes", and the pretense is then maintained that the income tax is the only tax, by using the word "taxes" to refer actually only to the income tax. The poor, indeed, pay a tremendous variety of taxes: they pay the sales and various excise taxes; through the passing through of tax charges they pay the property taxes of their landlords and the corporate taxes of those whose goods and services they buy; they pay, of course, the FICA levies, which actually go to curent government use, and in large proportion flow out the Treasury as interest payments to the prosperous holders of Treasury securities. Whenever you hear anyone talk about the poor do not pay taxes, because they do not pay much income tax, hammer this home until the fool's ears bleed with it....

"LET'S GO GET THOSE BUSH BASTARDS!"

[LiberalFighter]

99. I was specifically referring to Federal Income Taxes

Which as I stated and intended to state that EVERYONE poor/middle class/well off/super rich all have the SAME income EXEMPT from taxes.

The complainers try to use the excuse that the poor don't pay any taxes and of course they do with all of the other various other taxes that are regressive in nature. BUT they want to use the Federal Income Tax as the basis for their argument and that fails too. If a family has income of $25,000 and it is exempt from taxes... a family with $200,000 would have that same $25,000 exempt from taxes too if they had the same family makeup and allowable deductions. Those paying taxes are receiving the same deductions. In addition, I doubt that many in the lower income bracket are able to utilize exemptions that others have available to them as well as being able to fully utilize the itemized deduction vs standard deduction.

Then there is the income tax brackets.
Income is not taxed at the same rate as too many believe.

Not remembering the different tax rates and different brackets:

If a person earns enough income to have income taxed in the 3rd bracket they will have a portion of their TAXABLE income taxed at the lowest rate -- the next portion of their TAXABLE income taxed at the 2nd lowest rate -- the last portion of their TAXABLE income taxed at the 3rd lowest rate.

Many people believe that if they are in the highest bracket 38%? that all of their taxable income is taxed at 38%. That is not true. Only a portion is taxed at that rate.

[The Magistrate]

105. Understood, Sir

The fault is mine if inexactness of expression gave you the impression it was your usage being corrected. It was my purpose to point out the common tack of rightist drivel on this matter, that a number of people are taken in by, and suggest means for shutting down persons who attempt to press that line. It is one that must be laid beneath the ground whenever it is attempted.

"LEt'S GO GET THOSE BUSH BASTARDS!"

[LiberalFighter]

107. Unfortunately it is more than just a number of people taken in

I've explained the difference between all income being taxed at one rate versus parts of income taxed at different rates. Too many didn't realize the difference. I had one person kept trying to tell me he was taxed one rate for the taxable amount.

I believe that H&R Block includes the percentage that they paid in taxes when they do tax returns. Software does the same thing too.. that might be the ticket for this when they complain... ask them what their tax preparer or software stated.

[jdj]

84. That is the most offensive talking point ever.

It's hideous and offensive to me as someone who has spent most of my adult life below the poverty level. Anyone who says that should have their mouth washed out with soap. And people actually believe this.

[Lithos]

8. I wonder if this is a test balloon

Similar to what what Drudge threw up the other day about banning the IRS.

I think they are testing ideas out for their convention.

L-

[JDPriestly]

19. Europeans have both income and Value Added Taxes

When we lived in Europe, the VAT was about 19% I think. We still had to pay plenty of income tax. The VAT is regressive, however, it is less regressive if food, medicines and other necessities are exempt.

What is positive about the VAT? The same taxes are paid on imports and exports. As it is, a clever importing manufacturer can avoid paying American income taxes and does not contribute to American worker's comp., disability insurance, social security, etc. If revenue from a VAT were applied to fund these expenses, it would make offshore manufacturing less attractive.

[GoddessOfGuinness]

12. In the language of ignorant America,

this might sound like a great deal.

God help us when our society mimics Dickensonian England. :nuke:

[MichiganVote]

14. Never happen. Can't finance wars on fritoes

[Geo55]

15. You know damn well

if they were able to pull this off....they'd shoot it full of holes for the rich folks big enough to drive a limo through.

[dawgman]

25. no need. If you don't spend the money it ain't taxed.

I spend every penny therefore every penny is taxed someone who makes more money saves some money and that money is never taxed.

[DieboldMustDie]

17. Texas relies heavily on sales taxes -- they don't have a state income tax.

Consequently the poor pay proportionally more than twice as much as the rich.   It sucks. :grr:

[Wednesdays]

61. Oklahoma, too

We have state income tax, but write-offs are meager except for Big Oil and Big Agriculture. Our sales tax includes everything...even food and medicine.

[NYC]

18. Sales tax burdens the poor.

[goobergunch]

21. Yet another reason to vote for Kerry (n/t)

[lostnfound]

24. Can we tax stock sales, too?

Or perhaps corporate acquisitions of other corporations? No?
Guess not.

[Eric J in MN]

30. We do tax stock sales.

less than wages, though.

[stickdog]

37. We only tax capital gains. The sale price is not taxed.

[lostnfound]

41. No, we tax only the gain on stocks..

Buying a stock is not like buying a car. You pay sales tax on a car. Buying a company, or a share in a company, incurs no sales tax.

Obviously any tax on stock sales would drive capital away from US markets, because even a small tax -- say, 0.5% -- would be a load on the investment.

It would reduce liquidity of stocks.

It would also cause investors (if there were any investors left!) to focus only on long-term goals, because they wouldn't want to move their money very often.

I'm not saying it's a good idea overall, but it's interesting to consider how our system is set up with regards to purchases for actual human consumption vs purchases that are made with the intent to increase wealth ('investments' or gambling).

[muriel_volestrangler]

57. There actually is a tax on stock purchases in the UK

and it is indeed 0.5% - it's called the stamp duty. The UK stock market still functions happily with it.

It's normally less than the stockbroker's fee; people manage to pay it without too much trouble (though investment companies are always asking for it to be removed). In fact, some economists think a small tax on stock sales is good, to discourage simple speculation on short-term price movements. As you say, that form of 'investment' can be close to gambling.

[GaryL]

26. What B***it!

In order to gain the same revenue spent today, the tax would have to be at least 30 percent. Nice and regressive for anyone making less than 100K.

[Justice]

29. This is Scary

I've heard this now 3 times i a week - Hastert said it, Bush and one other republican.

[Eric J in MN]

31. a way to make our economy as stagnant as Europe's (nt)

nt

[Eric J in MN]

32. a way to make our economy as stagnant as Europe's (nt)

nt

[rman]

75. given the direction US economy is going, you'd wish it were stagnant

-

[Charlie Brown]

33. If this catches on, Kerry will support it, too.

Then how will you all feel about it?

[mac56]

66. Nonsense.

Nothing Kerry has said indicates he'd support this kind of tax.

If he should endorse it, by some amazing circumstance, I suspect no one here would change his or her mind about it.

Are you suggesting that everyone here is in lockstep with Kerry? What, are you new in town?

[Sven77]

34. alex jones on income tax

alex jones >
republicans want to eliminate the income tax if Bush get re-elected. they will lower the income tax to 8% to cover soc.security /fica /medicare-medicade. then the new national sales tax 30% for wealthy - 15% middle class, 0% for the poor. its graduated so the richer you are the more you pay. the poor will not have to pay. the trick is you have to swipe your Drivers License to see if you pay it(the tax). which does several things, brings federal control into every business and shop, with tracking and tracing. and gives them a whole new tax, and a left/right arguement. and they keep the income tax, then later on rachet it back up. and they all the neocons out promoting it. this is the star in their crown.

this is a rough transcribe from his TV show on 08-03-2004.

[dumpster_baby]

103. This is actually a great idea, the way you put it

If indeed you would use a national ID card to determine how much tax you pay. But of course the actual percents paid would be the real sticking point. But you see I would love to have such a scheme as you present brought into the public debate. It would focus the public debate on the tax percents paid by the rich vs the poor and middle class, whcih is exactly what we need.
But they would never do it.

But another advantage is that we absolutely NEED a national ID card if we are to ever implement universal healthcare and a stronger social safety net.

[struggle4progress]

35. The idiotic idea, of course, is that everyone should pay ...

about the same amount, regardless of their ability. Let's do a simple investigation of this idea.

For FY05, King George is spending $2.4 trillion -- or about $8200 for each one of us.

If only everybody paid about $22 every day in federal sales tax, we'd have a balanced budget, and if everybody paid more, we could pay off the national debt.

Of course, this might be a bit hard on the minimum wage earners, since they're only making about $885 a month, of which they'd need to set aside about about $680 every month for sales tax, leaving them only about $200 a month in spending power. Naturally, they'll be spending every penny: if they lived on the streets and spent the $200 entirely on products, the tax rate would be $680/$200 = 330%.

Damn! It's gonna be hard to make those pesky working poor pay their fair share without screwing the ultra-rich!

[w4rma]

38. The heck with that bullcrap. That would shut down commerse within the US.

It will make it even tougher for buisnesses to sell things in the Bush depression, because it will effectively raise the prices on everything.

[flaminbats]

40. Wow, I agree with Bush!

with two unfunded wars, the exploding ranks of the uninsured, most babyboomers about to retire, another homeland bureaucracy for every color of the rainbow, and the booming federal deficit...simply repealing tax cuts cannot pay the bills :wow:

We must repeal the Bush tax cuts and have a National Sales Tax.

[struggle4progress]

45. It will be a high tax:

Use FY05 federal outlays of 2.4 trillion as needed revenue base
http://www.cbo.gov/showdoc.cfm?index=5151&sequence=1

Assume (with optimism) retail and food sales about $350 billion monthly
http://www.whitehouse.gov/fsbr/production.html

A balanced budget corresponds to a federal sales tax rate around 55%.

[Guaranteed]

46. We all know that if Bush wants it, it's bad.

Don't be fooled.

[SammyWinstonJack]

62. Exactly what I was thinking

If bush* is pushing this, it has to be bad.

[bluestateguy]

49. I just can't ever support that.

I'm sorry, but I just won't participate in that. Maybe I could incorporate in the Cayman Islands.

[flaminbats]

50. Great point!

a black market would destroy an open and competitive free market. Those making very little would be forced to buy their medicine, food, and other necessities on the black market just to survive! And more than any other group, working class people unable to buy goods in other countries or stock up would be prosecuted by the IRS.

I agree with you that a closed economy, in which few can openly participate or prosper, is just another word for depression.

[SoCalDem]

51. YEARS ago, there was a 10% Luxury tax

It might just have been a state tax (Kansas).. I remember getting yelled at when I was a kid working in my Aunt's boutique.. I spent a whole day without adding Luxury tax to jewelry I sold..and a coat with a fur collar..

If I recall, only "certain items" were taxed extra.. I know that jewerly, any fur item, and specialty items like dress gloves and shoes with "decoration" on them..

I remember a chart that was under the glass at the register..and I would always have to check to make sure I collected the right amount of tax..

Back then we paid sales tax on EVERYTHING...food and medicine too..

[flaminbats]

52. this is the type of tax Kerry should bring back.

but items like books, medicine, clothes, food and water should be exempt.

[mtnester]

54. Imagine the black market on Hummers

and other luxury items for the uber rich with a national sales tax.

[Beetwasher]

59. "Mulling the Idea As Part of An Agenda for a Second Term"

These assholes. No clear plans, no spelled out agenda for a second term. They speak as ambiguously as possible about everything they are planning to do.

[GOPBasher]

60. Horrible.

That's a regressive tax. What we need is a more progressive income tax, not a sales tax that will hurt the middle class and the poor. Of course these assholes will try something like this.

[Rockholm]

64. Neato, A VAT in America.

If that is the case, I will move to England or Canada, thank you.

[yellowcanine]

67. Well the VAT hasn't exactly helped European economies - one could

argue that it may be one thing that drags down the EU economies compared to the U.S. economy. I don't know if that is true, I am no economist. But I think we go down this path with extreme caution. Of course, who thinks this is a serious proposal on *'s part anyway?

[Rockholm]

68. Exactly. I was being sarcastic.

If I wanted to pay a VAT (and that would be assuming that * somehow wins the election and initiates one), I would prefer to live in either England or Canada. I will not live under another for years of BushCo and watch this country disintergrate.

[yellowcanine]

74. I actually wasn't responding to your post. Great minds think alike?

I only saw your post after I posted mine. Seriously, one would think that any proposal to institute a National Sales Tax would look at the European VAT experience for guidance. Of course we all know this is an election ploy, not a serious proposal.

[Rockholm]

91. Very true.

[Zynx]

69. If you took out food, the tax would have to be very high.

That would whack average Americans really hard. They would have to pay 15% or more on everything. That's much higher than 70% of Americans pay now in income taxes.

[MallRat]

70. The poor spend money, the ultra-wealthy save money.

Replacing the IRS with a national sales tax would usher in a new era of American aristocracy, and would put the entire tax burden on the poor and working class.

This is a horrible, horrible idea that will be spun to unknowing dupes as "tax reform to empower American families." People aren't going to think this through, folks. They're going to hear "abolish the IRS," and say "Great Idea!"

We've got a lot of eyes to open before this gathers any steam- the very survival of our nation may be at stake.

-MR

[flaminbats]

86. you mean the poor save more in Tennessee than in Georgia or Kentucky?

They must feel sooo blessed to have that high state sales tax to encourage savings!

[Francine Frensky]

72. Bush wants an OLD-EUROPE tax for the United States???

I don't think so.

[stevedeshazer]

73. Another faux pas by the Bush team

Proposing a sales tax now is idiotic. Two swing states, Oregon and New Hampshire, have resisted efforts to impose a sales tax for years. Bush won't win any votes in those states with this dumb idea.

[leesa]

78. The tax and spend party.

[TrogL]

92. Call it the "Goods and Services Tax"

It brought down the Canadian Conservative Government 'cause it pissed people off so bad.

[Feanorcurufinwe]

93. Bush to middle class: say goodbye to your mortgage interest deduction.

[Generator]

94. That confirms if if there could ever be a doubt

Bush is intending to destroy this country. Another four years and there will be nothing left but a country for the rich by the rich.

God SAVE AMERICA from this petty evil rotten man.

[David Zephyr]

95. WalMart Now Wants to Do the Job of the IRS.

I have to laugh at George Bush's statement that this is "kind of interesting idea".

Kind of...

[dolstein]

98. The sales tax would need to be higher than the marginal tax rate

that most Americans currently pay. So for the vast majority of Americans, who consume far more than they save, replacing the income tax with a national sales tax would increase their tax burden.

[Tight_rope]

100. Any Tax reform suggested by Bushco is a "CON". Think about it.

In the past 3+years the Bush administration has not passed any bill that has not benefitted their rich fat asses. I say absolute "NO" to anything that Bushco proposes.

[struggle4progress]

108. kick

:kick: