My thoughts are: Poor people spend ALL their money! Wealthier people spend A Fraction of their money! Ergo: A scheme to reduce the taxes on the wealthy and increase the tax burden on those least able to afford it. I think it stinks!
I think it would be very good news... for Canada. Imagine the numbers crossing the border to do their shopping (too bad if you live in the South).
A consumption tax would seem to have as many flaws and loopholes as an income tax. Besides, it wouldn't address the real problems - how much is spent (or wasted) by government, creeping complexity of tax rules (of course the "fair tax" looks less complicated on paper - but imagine it after the lobbyists got started), and tax evasion/avoidance by the unscrupulous.
I wonder if the book addresses two particular loopholes - people registering themselves as spurious companies to avoid the tax, which is only on retail goods, and (for example) a car salesman selling a new car to his asistant for a buck, with 25c tax, so that the assistant can then sell it to the real customer at the real price, but tax-free.
This message has been edited. Last edited by: newnickname,
Echoing Frank's opinion, I must point out that there is a reason that there is a lower limit on taxable incomes. Under a national sales tax plan, people whose incomes are so low that they do not pay any income tax would be faced with a tax that they simply cannot pay. The federal poverty lower limit is already a very low figure, yet there are a great deal of people who don't even make that much. A national sales tax would put these people in an impossible situation; if they buy enough food for the month, they can't afford the rent, and if they pay the rent, they can't afford enough food for the month. Of course, many of these people are taking medications, and the meds, taxed or not, would be the first item cut from their budget. -------- 2005 Health & Human Services Poverty Guidelines Size of Family Unit (48 Contiguous Only) States and D.C. 1 $ 9,570 2 12,830 3 16,090 4 19,350 5 22,610 6 25,870 7 29,130 8 32,390
For each additional person, add $3,180
SOURCE: Federal Register, Vol. 70, No. 33, February 18, 2005, pp. 8373-8375.
Note: All figures are pre-tax. -------- According to USCensus.gov, the percentage of Americans living in poverty during the years 2003-2004 was 12.6% Imagine a single woman with two children trying to make ends meet on $16,100 a year. Compare your family's income and size with these tables. Now think about this: According to the federal government, she and her children are above the poverty line.
Posts: 16615 | Location: Lincoln Place, Granite City, IL, USA | Registered: 06-03-02
It works just fine when all the people spend the same on purchases all the time. Then you know from week to week and year to year how much tax revenue there will be. The government can plan its spending accordingly.
In the real world that doesn't happen.People stop spending sometimes. They keep more of their income. If you tax the spending then you lose revenue when that happens. If you tax the income, whether or not they spend a penny of it, you still get the revenue regardless. What is more, it is fairly easy to predict accurately from week to week and year to year how much income the nations' people will have and to plan accordingly.
Income tax is easy and cheap to collect, too. Most people are employed by some corporation or by the government itself and so the tax can be deducted at source, straight from the salaries. That's a lot easier than finding and calculating thousands of invoices and receipts and working out the percentage(s) representing the sum due as tax.
If you must tax goods and services then have Value Added Tax , as used throughout the European Union, not sales tax. No country in the EU does without income tax though
Under Boortz' proposal, apparently, everyone would be sent a check equal to the amount calculated by some federal office as necessary for the basics of life. Like the tax itself, that sounds simple, but imagine how it would work in the real world of fiddled statistics and pre-election give-aways. (Wasn't it Reagan's administration that had ketchup re-classified as a vegetable, to make the basic, necessary diet look more
Unlike VAT, the Boortz tax would only apply once, at the point of retail sale of a new product - leading to the possibility of all kinds of avoidance scams, including simple collusion between buyer and seller to ignore the tax.
NNN-It would appear you have a copy of the book or doing a bit more research on the subject.
You reminded me of a time when Richard Nixon was President. As legend had it, his favorite course for lunch was cottage cheese & ketchup. The critics problem with this was the poor couldn't afford the ketchup
Also I am glad you pointed out the checks that would be sent out for the necessities. This would address Mr. Frank & DG's concern about the poor being taxed.
Also NNN, you mentioned that your home country might benefit due to people crossing the border to buy their goods to escape paying a National Sales Tax. That might not necessarily be the case. According to the book, we already have a lot of hidden taxes already embeded in the prices. As a result the prices of goods may very well go down. And you are correct in saying the tax is applied only once, no VAT being added along the way in the prices of goods. To me it would appear a VAT would only complicate the tax system. Something we certainly don't need.
Posts: 2219 | Location: Martinsville, IL | Registered: 06-03-02
