23% sales tax; no fed. income tax

Proposed. By a guy named Bork. Where are those economic majors to sift thru this?

Whaddya think? I think getting rid of this huge accounting mess, making the IRS ... gone for the most part would greatly simplify my life. You spend a lot, you pay a lot. BTW, the 23% would basically match what the federal government obtains using the current system.

I guess this applies to any purchase... Wonder how this would affect the stock market. But, bottom line, no paying Uncle Sam in April (for me anyway, I am one of those that take their time getting the taxes done).

[somerfrost]

Originally Posted by pgardn

Proposed. By a guy named Bork. Where are those economic majors to sift thru this?

Whaddya think? I think getting rid of this huge accounting mess, making the IRS ... gone for the most part would greatly simplify my life. You spend a lot, you pay a lot. BTW, the 23% would basically match what the federal government obtains using the current system.

I guess this applies to any purchase... Wonder how this would affect the stock market. But, bottom line, no paying Uncle Sam in April (for me anyway, I am one of those that take their time getting the taxes done).

terrible idea...would effect the poor much more than the rich (no big surprise), while the rich would pay more for luxury items, everybody needs food, clothing etc...it would be a huge break for the richest folks!

Originally Posted by somerfrost

terrible idea...would effect the poor much more than the rich (no big surprise), while the rich would pay more for luxury items, everybody needs food, clothing etc...it would be a huge break for the richest folks!

Does make sense. 23% for people who have very little money and hardly pay any income tax, if any at all, would crush them. Paying 23% extra for food... not good.

What about the middle class though?

[somerfrost]

Originally Posted by pgardn

Does make sense. 23% for people who have very little money and hardly pay any income tax, if any at all, would crush them. Paying 23% extra for food... not good.

What about the middle class though?

It wouldn't be as bad for the middle class but still...middle class America struggles now, even a little more burden would eventually sink many! Rich folks don't live paycheck to paycheck while most Middle class folks do. Look at it this way (oversimplified I know but still)...today the tax rates increase with income so the rich pay more in taxes (at least before they find loopholes), this system would have them paying at the same rate so the difference would have to come from somewhere...namely middle class and poor folks!

[brianwspencer]

Originally Posted by pgardn

Does make sense. 23% for people who have very little money and hardly pay any income tax, if any at all, would crush them. Paying 23% extra for food... not good.

What about the middle class though?

it's still a disaster, because you're still stuck paying social secutiry, still stuck paying state taxes, still stuck paying medicare payments to the government. basically, for someone like me, you'd be taking out the 15-20% federal tax, leaving all the other payroll deductions and then saying that I have to pay 23% on everything I buy, including food, clothing, gas, other necessities.

That's about the worst idea i've heard all day, and I'm sitting next a total tool at work here.

[Danzig]

surely they wouldn't tax food, altho where i live, there is a state sales tax on food.

also, 23% sounds incredibly high to me. especially when i factor in that i already pay 10.% in local/state sales tax. that's a lot of money!
i wish they could simplify the tax code, just think if we no longer had to pay all those folks at the irs!
maybe they could send out 'tax cards'-depending on what level of income you are-they scan your card before you check out at the store, and the register figures your sales tax based on the bar code on your card.
hell, if they can use those stupid cards at grocery stores to store info on what kind of peanut butter you prefer, they could do this.

[GenuineRisk]

I agree with the others about it being a huge drain on the poor, and likely the middle class as well, but pgardn, I'm SOOOOO glad you brought it up, because on the surface flat taxes and national sales tax seem like a good idea-- hey! Everyone pays the same!-- and it's not until people actually start discussing it that the inherent flaws in the proposed ideas come out. (and that goes for some liberal sacred cows too) As always, grateful for Derby Trail-- I get horseracing education and can talk politics, too.

By the way, I was in favor of a sales tax for a while, too, until someone pointed out to me what a burden it would be on the poor. I hadn't thought about the cost of necessities as a portion of total income until then and how taxing purchased things would necessitate more of the poor's total income going towards taxes than the wealthy's. (The guy who explained it to me, by the way, is a self-made wealthy guy who very much favors graduated income tax with the rich paying more than the poor. So, yes, he was biased, but against his own financial interests, so go figure)

Well its not actually everyone pays the same. Its whoever consumes the most, pays the most. But the food clothes and gas part would really hurt. And clearly wealthy people consume more. But they can afford to, and 23% would not hurt them near as much.

And Z, 23% was what the study suggested would be needed based on current consumption, and current federal taxes.

If it had to be done, I would leave food and clothes off the list. Gas, I could live with. I rode the bus for a number of months when my car broke down.

Candy not considered a food. Make those kids eat fruit. Man that would really save some teeth. And then, what exactly is Candy... ? and the whole mess starts up again.

[GenuineRisk]

Originally Posted by pgardn

Well its not actually everyone pays the same. Its whoever consumes the most, pays the most. But the food clothes and gas part would really hurt. And clearly wealthy people consume more. But they can afford to, and 23% would not hurt them near as much.

And Z, 23% was what the study suggested would be needed based on current consumption, and current federal taxes.

If it had to be done, I would leave food and clothes off the list. Gas, I could live with. I rode the bus for a number of months when my car broke down.

Candy not considered a food. Make those kids eat fruit. Man that would really save some teeth. And then, what exactly is Candy... ? and the whole mess starts up again.

Except you've got poor rural people, who have no access to mass transit. And then you'd have rich people buying $40,000 dresses and suits, tax-free.

And what about toilet paper?

As you said, and the whole mess starts up again. Perhaps life is a constant struggle for a simple solution that doesn't exist.

[Danzig]

food and meds should be exempt.
as for social security tax--not sure why you pay that out separately according to your check, it goes in the same big hole as fed income tax.

[SniperSB23]

How about a luxury tax? A certain amount of every product is untaxed and anything over that is taxed at 23%. So any car you buy isn't taxed on the first $8,000 but anything beyond there is taxed at 23%. Seems that would accomplish the goal of replacing income tax more effectively.

[Danzig]

i just wish they could simplify the fed tax system. all that paperwork, all the hourse spent filing. how hard is it to say i'm married, have two minor kids, what do i have to pay? and then pay it? how much money is spent on books, forms, 'help'(you ever call the irs 'help'line? not very helpful!), auditors...how much personnel do we pay to handle fed taxes???

[timmgirvan]

Originally Posted by SniperSB23

How about a luxury tax? A certain amount of every product is untaxed and anything over that is taxed at 23%. So any car you buy isn't taxed on the first $8,000 but anything beyond there is taxed at 23%. Seems that would accomplish the goal of replacing income tax more effectively.

Dude: just kidding....but what kind of car will you be buying for 8 grand?

[Rupert Pupkin]

Originally Posted by SniperSB23

How about a luxury tax? A certain amount of every product is untaxed and anything over that is taxed at 23%. So any car you buy isn't taxed on the first $8,000 but anything beyond there is taxed at 23%. Seems that would accomplish the goal of replacing income tax more effectively.

That sounds like a better idea than just a flat 23% sales tax. I agree with others that a flat 23% sales tax would be be too big of a burden on the poor.

I still think the best idea would be a combination of a flat tax and some type of less complex, progressive income tax. For example, maybe they could have a 10-12% flat sales tax and also a simple, progressive income tax where people who make under $25,000 a year pay no income tax, people who make $25,000-$50,000 a year could pay a 5% income tax, people who make $51,000-$100,000 a year could pay a 8% income tax, people who make $101,000-$200,000 a year could pay around a 10-12% income tax, and people who make over $200,000 a year could pay around a 15-20% income tax.

Z your right I completely forgot about the meds... see the list of exemptions starts growing and the complexity increases exponentially as GR mentioned. What a mess. I hate doing taxes, my father left me some property that is not worth much money and it is such a pain in the rear. And then he had an IRA so I have to withdraw a certain amount out of that small IRA every year using a formula that accountants have a mess with...

[Danzig]

Originally Posted by timmgirvan

Dude: just kidding....but what kind of car will you be buying for 8 grand?

no, he said the first 8 would be exempt. so if you bought a 30 k car, you'd be taxed on 22k.

Originally Posted by timmgirvan

Dude: just kidding....but what kind of car will you be buying for 8 grand?

A used car. Nothing wrong with that.

Originally Posted by Rupert Pupkin

That sounds like a better idea than just a flat 23% sales tax. I agree with others that a flat 23% sales tax would be be too big of a burden on the poor.

I still think the best idea would be a combination of a flat tax and some type of less complex, progressive income tax. For example, maybe they could have a 10-12% flat sales tax and also a simple, progressive income tax where people who make under $25,000 a year pay no income tax, people who make $25,000-$50,000 a year could pay a 5% income tax, people who make $51,000-$100,000 a year could pay a 8% income tax, people who make $101,000-$200,000 a year could pay around a 10-12% income tax, and people who make over $200,000 a year could pay around a 15-20% income tax.

And then the very rich give birth to a cow. If the trend above continues.

[SniperSB23]

Originally Posted by timmgirvan

Dude: just kidding....but what kind of car will you be buying for 8 grand?

Yeah, it isn't like if you buy a car for $8,001 you are suddenly getting taxed for 23% on all of it. You'd just get taxed 23 cents for that one dollar past $8,000. So a $15,000 car would cost you $1610 in sales tax as opposed to $1200 if the full price was taxed at 8 percent. A small difference if you are getting relief on income tax. The people buying $100,000 vehicles would be the ones getting hit by it as that would cost $21,160 in taxes rather than $8,000.

It might keep people from buying stuff they cant afford...

OH NO. That would ruin an economy that already runs on a huge deficit.