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Author Topic: National Sales Tax  (Read 16022 times)
Paelos
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on: September 14, 2004, 10:17:26 AM

Fairer system, or screwjob on the poor?

I can already guess how this will divide up among party lines, but I am very much in favor of a system that doesn't have me dealing with the insanity of the tax codes and exemptions as an accountant. Frankly, I see that this system has worked wonders in Texas, where there is no state income tax. They specifically target goods at a higher rate, gas specifically. I do think it's a possibly system, if a poverty line is established that can receive tax rebates or prebates.

Quote from: George Bush
I'm not exactly sure how big the national sales tax is going to have to be, but it's kind of an interesting idea that we ought to explore seriously


Quote from: John Kerry's camp
If [Bush] has his way, every trip to the supermarket will feel like a visit to H&R Block and every day will be April 15. And now that this plan has been exposed, George W. Bush is trying to mislead the public into thinking it was just an off-the-cuff comment


AND I HEAR HE EATS BABIES!

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Abagadro
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Reply #1 on: September 14, 2004, 10:22:28 AM

Bush is trying to make the income tax solely wage-based by removing all taxation of wealth and investment-based income.  Add to this a sales-tax and/or VAT and you have an extremely regressive system.  It will only make your tax filings easier if you have lots of investment income.  Otherwise, you won't see any change except an additional 7-10% on everything you buy.

No thanks.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
kidder
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Reply #2 on: September 14, 2004, 10:30:58 AM

Quote from: Abagadro
Bush is trying to make the income tax solely wage-based by removing all taxation of wealth and investment-based income.  Add to this a sales-tax and/or VAT and you have an extremely regressive system.  It will only make your tax filings easier if you have lots of investment income.  Otherwise, you won't see any change except an additional 7-10% on everything you buy.

No thanks.


I'm sorry... Isn't the national sales tax suppose to replace INCOME tax?  How would we not see a difference?  We wouldn't file federal income taxes anymore, because there would be a sales tax instead.  Only people spending money on big ticket, non-necessity items would be paying tax.  There is more to it than that, but that is the basic theory.  No more April 15th's...at least for federal.  States would likely follow.

Kidder
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Margalis
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Reply #3 on: September 14, 2004, 10:41:19 AM

It wouldn't be big ticket items, it would be ALL item.

They say the poverty line is 8k a year. That's laughable. So if you make 9k a year, you get to pay 26% sales tax on everything you buy, great!

It encourages people not to buy, which is dumb, and a flat tax is just a bad idea in general. Flat taxes are NOT fair. Just because the number is fixed doesn't make it "fair", that's first grade level analysis.

Any resonable human being who has thought about it for more than 30 seconds realizes that the value of money is not fixed, it depends on how much money you already have.

For they guy making 10k a year, 26% sales tax is a hell of a lot different than 26% for a guy making 100k a year.

vampirehipi23: I would enjoy a book written by a monkey and turned into a movie rather than this.
Paelos
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Reply #4 on: September 14, 2004, 10:54:55 AM

Granted its a system that needs tweaks in places, as the poverty line issue is definetely one of them. I would like to see a sliding poverty line scale in percentage rebates probably up to about $20K a year. Couple that with possible dependent rebates as well for a flat rate. I do know that simplifying the process would eliminate federal funds going down the toilet just to keep the IRS functioning, and it would also eliminate the costs of people cheating the system. You can't dodge a sales tax easily.

The idea of consumption decreasing is an adequate rebuke of the system, but it overlooks two key factors. One, there would no longer be income removed from your paycheck, and thus you would have more distributable income to pay for things. Two, the consumption decrease would be temporary while buyers adjusted to price changes. Once the growing pains are gone, the system will operate as normal.

As for capital gains, that would have to be looked into more. Personally, I'm fine with no capital gains tax, as are most of the investors. However, I know that would make the have-nots jealous, so it probably won't happen.

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kidder
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Reply #5 on: September 14, 2004, 10:56:17 AM

You are right...not on big ticket items...all items.  Here is a link to an overview of some of the good points:

http://www.fairtaxvolunteer.org/smart/sketch.html

I'm paying well over 33% of my income now.  A 26% tax instead sounds better to me.  Perhaps someone with a better understanding of this could enlighten me?

I can see how IRS employees, or tax accountants might be upset about this...since it might mean their jobs.

Kidder
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slog
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Reply #6 on: September 14, 2004, 11:09:10 AM

simple example:

Person A makes 10,000 per year
Person B makes 100,000 per year
Person C makes 1,000,000 per year
Assume a 10% sales tax

A is fucking poor.  spends every last dime he makes, cause he can't afford to save.

10,000 * 10% = 1,000 paid in taxes for one year, or 10% of his income.

B is doing pretty well.  Saves 10% of his income, spends the rest.

90,000 * 10% - 9,000 paid in taxes for one year, or 9% of his income

C is fucking rich .  Saves 40% of his income per year.

600,000 * 10% = 60,000 paid in taxes, or 6% of his income.



Is this fair?  Depends on your opininion.  The system benenfits people who can save their money, but only the rich(er) can afford to save.

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Reply #7 on: September 14, 2004, 11:12:21 AM

Quote from: kidder

I'm paying well over 33% of my income now.  A 26% tax instead sounds better to me.  Perhaps someone with a better understanding of this could enlighten me?


cause you are not actually paying 33%.  that may be your tax bracket, but it's a lot harder than that to figure out your tax burden.

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Big Gulp
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Reply #8 on: September 14, 2004, 11:27:59 AM

I'd be completely in favor of a national sales tax, and I'd really like it if they'd just integrate the tax into the price like they do in Germany.  This was in the days before the Euro, but if something was labelled as DM 5.25, you paid DM 5.25.

What I'd be firmly against is VAT.  Valued Added Tax is an economic solution that looks great on paper, but is horrible in actual execution.  It was something that I absolutely hated where I encountered it, like in the UK.
Paelos
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Reply #9 on: September 14, 2004, 11:39:34 AM

A very in-depth paper on the subject

Some highlights:

Quote
A 1992 study by political scientist James L. Payne estimated that Americans spend roughly 5.4 billion man-hours computing their taxes.(15) This is more man-hours than used to build every car, van, truck, and airplane manufactured in the United States. It is more than the total number of hours worked in a year by every resident of the state of Indiana. The deadweight economic loss is estimated by Dr. Payne at well over $200 billion


Quote
First, the regressivity issue can be overcome easily. If we were to provide a rebate on a generous portion of the tax that every American pays, then the regressivity disappears. I advocate that every individual receive a rebate on the tax paid on the first $5,000 of purchases he makes during the year. This would mean that a family of four would pay no tax on its first $20,000 of purchases each year. There are various ways of providing this rebate. Assuming that the sales tax were set at 18 percent, a family of four would be entitled to a rebate of $3,600 ($20,000 x 18 percent) for the year. The government could send a quarterly rebate check of $900 to every family of four; a $450 check to every family of two; and so on.

Another possibility would be to provide every family with an annual "smart card" that would have a sales tax credit based on family size. A married couple with no kids would receive a $10,000 credit on its card. Each time the couple made a purchase, the smart card would deduct that amount until the card's $10,000 credit was used up. After the first $10,000 of purchases, the family would begin to pay the sales tax.

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slog
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Reply #10 on: September 14, 2004, 12:19:18 PM

Quote from: Big Gulp
I'd be completely in favor of a national sales tax, and I'd really like it if they'd just integrate the tax into the price like they do in Germany.  This was in the days before the Euro, but if something was labelled as DM 5.25, you paid DM 5.25.


This is called a Value Added Tax.

Quote


What I'd be firmly against is VAT.  Valued Added Tax is an economic solution that looks great on paper, but is horrible in actual execution.  It was something that I absolutely hated where I encountered it, like in the UK.


L
O
L

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Abagadro
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Reply #11 on: September 14, 2004, 12:23:37 PM

Quote
I'm sorry... Isn't the national sales tax suppose to replace INCOME tax?


Not really.  More likely it will be to stop-gap the loss of revenue from Bush's "ownership society" where if you make money by owning something, you pay no tax, but if you make money by busting your ass every day, you pay taxes, plus get hit with a sales tax.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
HaemishM
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Reply #12 on: September 14, 2004, 01:15:45 PM

This is an idea that sounds great, in the little soundbite chunks most politicians use to try to sell their ideas. Unfortunately, the more you think about it, the less you should like it.

Biggest bugaboo is the exemptions for the impoverished. Who administers that? Who administers the rebates if we ditch the IRS? Some administrative body will have to oversee it. I like how the politician who suggested this in the article above just foists the job off on the states. Thanks a bunch, cockknocker, who's going to fund that state agency when most state budgets are stretched to the max as it is? Not to mention that if we are hit with a national sales tax in addition to a state sales tax, that's double taxation.

And if we completely remove the corporate tax burden by taking away income tax, that places the burden at the cash register even higher. I'm sure businesses love it, because that means workers cost them less. I am entirely skeptical that an added tax on every sale is going to make up such a huge shortfall.

Though I hate the IRS, I'm thinking there are better ideas than this one to fix the tax problems of this country.

Krakrok
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Reply #13 on: September 14, 2004, 01:57:32 PM

Quote from: kidder
I'm sorry... Isn't the national sales tax suppose to replace INCOME tax?


Yes. Abagadro is smoking crack.

You only pay tax when you SPEND money. Yes it is true that when Joe StockBroker grabs $10k off a stock market sale he pays no tax. Currently he'd pay 15% tax on that money. With the sales tax way he would pay 23% when he SPENDS the money.


When Joe Pauper buys a box of Cheerios he pays 23% tax (+~6.5% state tax).

When Joe Middle Class buys a new house he pays 23% tax (+~6.5% state tax).

When Joe Crack Dealer buys a new BMW with cash he pays 23% tax (+~6.5% state tax).

When Joe Rich Guy buys a $1 million dollar private jet he pays 23% tax (+~6.5% state tax).

When Joe Ultra Rich Guy drops $23 million on a fifth house in Carmel, CA he pays 23% tax (+~6.5% state tax).

None of the above would pay income tax. There would be no more taxes taken out of a pay check.


All cash transactions that never gets reported to the IRS like Joe Crack Dealer's money gets taxed when they SPEND it.


If I have $2 million in the bank and I'm making $200k a year off dividends/interest that's great. I'm making $200k and pay no tax. But if I want to SPEND the $200k I pay 23% tax on it. If I want to drop half of the $200k on a new car I take a 23% sales tax hit.


You think something that encourages people to save money is a bad thing? Currently most Americans save nothing. They have no idea how to save. Which means when the economy dumps they get janked. If they had been encouraged to save money instead of blowing it on the latest "Super Duper MPAA Action Movie" they might not be as bad off. And in case you hadn't noticed being credit card maxed out isn't the best place to be. When you file for bankruptcy now your credit card debt is NOT wiped out.

There might be a short term economic impact by American's starting to save money but I think it would help cushion economic problems in the long run by everyone having some savings.

Corporations only pay 10% of the income tax collected in the US right now (AKA they don't pay jack crap because they have the will and the way to find all the loopholes). The same goes for the ultra rich. For the most part they have the will and the way to pay as little tax as possible already, be it offshoring it, expensing options, using charity trust funds, farm equipment loopholes (read Humvee's), or other such means.

There are already import duties in place. If you buy a car in Oregon (which has no State sales tax) and you bring it to California you have to pay a duty on it when you register the car.

When Joe Foreign Music Label #2 ships all it's profits overseas it still takes the 23% tax hit when it SPENDS money on it's operation in the US.

And then there is all the movie companies. Know how they say X and X movie grossed $200 million. The joke in the movie industry is that no movies ever make any money. They siphon off all of the profit into their production companies and the movies NET $0 dollars (which is one reason why Stan Lee sued them over Spiderman royalties). With a national sales tax the production company that just dropped $250k on new film equipment just pay 23% sales tax on it.

----

Disclaimer: Count on the politicians to fuck up the implimentation though so it wouldn't work as described.
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Reply #14 on: September 14, 2004, 02:24:46 PM

If food, clothing and shelter and first car/computer are exempted, then a national sales tax sounds like a good plan. Otherwise, it's too way regressive of a tax…

"Should the batman kill Joker because it would save more lives?" is a fundamentally different question from "should the batman have a bunch of machineguns that go BATBATBATBATBAT because its totally cool?". ~Goumindong
SurfD
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Reply #15 on: September 14, 2004, 03:24:11 PM

ROTFL, I say go for it.

After all, when the price of all your shit goes up by 23%, even more people will be hopping over the border to buy stuff in Canada :P

Will have to keep an eye on that one, if it goes through, maybe i should go into the duty free business.

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Zaphkiel
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Reply #16 on: September 14, 2004, 05:25:19 PM

Quote from: Krakrok
You only pay tax when you SPEND money. Yes it is true that when Joe StockBroker grabs $10k off a stock market sale he pays no tax. Currently he'd pay 15% tax on that money. With the sales tax way he would pay 23% when he SPENDS the money.



   Does he pay 23% if he spends it on stocks?  What about bonds?  Does Comcast pay tax when it buys another cable company?  
   As long as the first 10 -20K is exempt ( and I like the smart card idea) I might support it.  IF stocks and company buy-outs are taxed.
Dark Vengeance
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Reply #17 on: September 14, 2004, 05:28:45 PM

Quote from: naum
If food, clothing and shelter and first car/computer are exempted, then a national sales tax sounds like a good plan. Otherwise, it's too way regressive of a tax…


Food, I agree with.

Clothing...not sure I agree. We spend a lot of money on clothing that has nothing to do with FUNCTION. If there was some specific type of generic clothing, I'd have no problem with selling a tax-free type of no-frills cotton underwear, t-shirts, socks, shoes, winter coat, and jeans. In other words, just this side of a burlap sack for the folks who can't afford to "not be caught dead in generic clothes".

Shelter? I wouldn't tax rent, but I would tax purchasing a home/land. Makes it a little harder to get into home ownership, but by not taxing rent, you help people make the transition by allowing them to save for their down payment. But I'm a nice enough guy to suggest a one-time exemption for first-time home buyers. Rental properties end up getting taxed as they are built, and/or purchased...plus anything the landlord has to buy to maintain the facility is taxed as well. Rentals become more affordable, because rental properties have to give renters a financial incentive to keep renting.

First car? Again, I'd base some of this on the type of car. Buying a used car for your first time? Sure...that's not bad. Trying to buy a BMW, or a brand-new Cadillac? That's a bit much. I'd say first-time cars are tax free up to $10,000, and any car can be purchased tax free if the sticker price totals under $5,000. Of course, we should also consider that in some urban centers, like New York, owning a car is considered a bit of luxury by some.

First computer??? That's really pushing it....I'd disagree.

Bring the noise.
Cheers..............
Margalis
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Reply #18 on: September 14, 2004, 05:56:38 PM

See..already you guys have made this "simple" plan into something pretty complex. Now you have to have an agency that keeps track of whether or not this type of clothing is funtional enough, whether or not this guy is buying a car for the first or second time, etc. Then, when you buy that house or car, you have to fill out a bunch of paperwork proving no prior ownership, etc.

Our EXISTING tax code sounds pretty simple if you don't get into the details. The more you make, the higher the percentage on your income is taken off. That's the one sentence executive summary.  Too bad actual policies are longer than one line...

Our tax laws could use some work, but that honest coversation starts with:
1: What are the major problems?
2: How do we fix them?

If tax code complexity is such a big problem, how about making it less complex? That has NOTHING to do with a new system. As I said above, the basic idea *is* pretty simple.

---
About the guy who wrote the paper claiming time wasted on taxes: replaces "taxes" with "snacks", "football", "water cooler conversation" or "masturbation" and you get the same thing. That is the dot-com era logic of "dog food is a 10 billion dollar industry, if we just get 1% we will be rich!" If you didn't spend that time doing taxes, you would have spent that time in some other wasteful way, not curing cancer...


Edit: That paper was total bullshit. If you read it with a critical eye it is extremely short on facts and full of leading language, baseless speculation, etc. I also find it odd that real estate as mentioned as not taxed...why not? Is land really that different from a microwave dinner?

There are some good arguments for a flat tax, that wasn't one of them.

What if I am paying for my kids college tuition, am I taxed on that? If so, good luck selling that to the public. If not, you've opened up a giant can of worms of "things we won't tax even though we said we would tax every good and service." Or is college not considered a good or service?

I would also point out that a flat tax isn't going to make your taxes any lower, on average. If you are in a low income bracket, it will probably make it higher. The fact is, we have money going out and need money going in. As long as the money coming in is the overall same amount, all you are doing is redistributing who pays what, not changing the average.

I make decent money and I rarely buy things so it would be a hit with me. But then again my friend who lives paycheck to paycheck would probably be screwed.

The best solution would be to have the government spend less money, but neither party is for that. Remember when Republicans were the party for a smaller, less intrusive government? The good old days...

vampirehipi23: I would enjoy a book written by a monkey and turned into a movie rather than this.
Merusk
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Reply #19 on: September 14, 2004, 06:00:32 PM

As Joe Rich guy, why the fuck would I buy ANYTHING in the US? LOL American tax system, I buy your goods in Japan and ship them over in my private jet! (shit, SurfD pointed this out already.)

Of course, I'm all for it. All my income is tied up in school loans, health insurance and house payments. The rest goes to savings or my 401k.  If I dump $7k a year back into the economy on goods I've gone on a wild spending spree the entire year - and yeah, that figure includes food. I'm saving more cashand the gvt's getting less. I'm already a saver, I'm not dumping the extra into the economy, it's going into my pocket.  Go sales tax.

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Reply #20 on: September 14, 2004, 06:02:46 PM

National Sales Tax is a great idea.  My only concern would be the short-term effect on consumption.

Bruce
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Reply #21 on: September 14, 2004, 06:03:17 PM

Quote from: Zaphkiel
Does he pay 23% if he spends it on stocks?  What about bonds?


Well, this kind of depends, doesn't it? Why couldn't we continue to allow programs similar to the 401(k) that allow tax-free investments to be made via payroll deduction?

I'm just not entirely sure I grasp why people want to beat up on investors....I would think that people would want to have the ability to make investments tax-free so that the poor and middle-class can make more investments.

Stocks provide capital for American business, and bonds provide capital to our government....both offer an ROI, which is an absolute must if you want people to either risk their money on business ventures, or to effectively lend money to our government. You've got to give them a reason to put the money to good use instead of simply hoarding it (not that banking institutions are averse to investments either).

Quote
Does Comcast pay tax when it buys another cable company?


All you do then is watch as more companies go bankrupt. You're effectively poisoning the smaller fish....sure, the big fish don't gobble them up, but they die anyway. Takeovers, mergers, and consolidations preserve more jobs than they cut (i.e. rendundant infrastructure). Additionally, when a company is bought out, their investors gain as the buyout can push up the stock value.

Not sure I see where you're going with this beyond taxing "evil" corporations. Those "evil" corporations provide jobs. Mergers and buyouts mean that part of the old company lives on.

Bring the noise.
Cheers..............
Margalis
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Reply #22 on: September 14, 2004, 06:26:35 PM

I think the point was we are moving towards a system where corporations are considered separate, equal entities in some situations but not others.

This gets to the basic point of why to incorporate at all. Corporations are separate legal entities. They have liability, even though they are abstract concepts. So, why shouldn't they pay taxes also?

It's not a matter of corporations being "evil" or not. They are legal entities, they buy stuff, they should be taxed in any system that taxes transactions.

Creating a corporation is really creating a proxy person, a fall guy. That guy should pay taxes. Hey, nobody forces you to incorporate! Not all businesses are corporations. If you choose to form a separate legal entity that assume your liabilities, it should also assume your tax liabilities. It isn't punishment.

Think about it this way: I choose to incorporate, you choose not to, and both our businesses spend $10 million. You get taxed and I don't, AND you are legally liable? That doesn't make sense. You get doubly screwed.

If you don't tax corporations, you can expect dummy corporations to pop up left and right. Start a corporation and pay zero taxes!

It's not about being "evil" or punishing anyone. A legal entity spends some money. We tax the spending of money. Hence they are taxed.

vampirehipi23: I would enjoy a book written by a monkey and turned into a movie rather than this.
Dark Vengeance
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Reply #23 on: September 14, 2004, 06:54:02 PM

Maybe you're misunderstanding me....taxing the purchase of assets makes sense. Microsoft decides to buy a copier from Xerox, sure...tax it. That's a business-to-business transaction....one business purchasing good or service from another.

OTOH, one airline buying out the other (as an example) is different. You're talking about buying assets that had already been taxed once, when originally purchased. Additionally, mergers and buyouts are preferable to simply letting companies go into bankruptcy.

Of course, when businesses pay taxes, they pass those costs along to their customers sooner or later....whether that means other businesses or consumers is irrelevant.

Bring the noise.
Cheers.............
Dark Vengeance
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Reply #24 on: September 14, 2004, 07:35:43 PM

Quote from: Margalis
See..already you guys have made this "simple" plan into something pretty complex. Now you have to have an agency that keeps track of whether or not this type of clothing is funtional enough, whether or not this guy is buying a car for the first or second time, etc. Then, when you buy that house or car, you have to fill out a bunch of paperwork proving no prior ownership, etc..


Just to clarify, a single registry, perhaps related to the social security number could be used to determine whether a car or house had been purchased before....or perhaps a notation on the credit report (no escaping a credit check when buying either) to indicate whether you have previously purchased a car or home.
 
You can spend up to $10k on your first car, and up to $5k on any car (EVER) and avoid paying any sales tax...NOT TOUGH. Rent isn't taxable, and a first-time home purchase isn't taxed...NOT TOUGH. Unprepared food isn't taxed...my home state does that already (i.e. groceries aren't taxed, restaurant meals are taxed)....again NOT TOUGH.

As to clothing, I'd just as soon say to tax it all. Ideally, if there were some way to essentially say "here is a crappy generic alternative that no self-respecting human would choose voluntarily if they had a choice, just to help the extremely poor", I'd be okay with that being tax-free. Since that isn't going to happen, you just tax all clothing.

Bring the noise.
Cheers.............
Zaphkiel
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Reply #25 on: September 14, 2004, 07:37:07 PM

Quote from: Dark Vengeance
Quote from: Zaphkiel
Does he pay 23% if he spends it on stocks?  What about bonds?


Well, this kind of depends, doesn't it? Why couldn't we continue to allow programs similar to the 401(k) that allow tax-free investments to be made via payroll deduction?

I'm just not entirely sure I grasp why people want to beat up on investors


    Why do you see treating investors exactly the same as everyone else "beating up" on them?   Personally, I think the stock market could use a bit of sales tax.  It would make people invest in things for the long term.  It would tend to make CEOs THINK about the long term.  401k's are fine, keep them as they are.
Abagadro
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Reply #26 on: September 14, 2004, 07:51:56 PM

I'm not on crack. Theoretically it is supposed to replace the income tax. In practice, there is no way you can shift that radically on a national basis. Won't happen.  It would turn the economy upside down. Phasing something like that in isn't easy either.

You will see it used to replace much of the tax cuts that are going in over the next 10 years that Bush wants to make permanent. Each and every one of those is a shift away from taxing wealth and the fruits of wealth, supposedly to spur people to "ownership," but it is a sop to his key consituency, rich folk.  Those have to be made up at some point and he is floating the balloon on sales tax to make that replacement.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

-H.L. Mencken
Zaphkiel
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Reply #27 on: September 14, 2004, 07:54:04 PM

Quote from: Dark Vengeance


As to clothing, I'd just as soon say to tax it all. Ideally, if there were some way to essentially say "here is a crappy generic alternative that no self-respecting human would choose voluntarily if they had a choice, just to help the extremely poor", I'd be okay with that being tax-free. Since that isn't going to happen, you just tax all clothing.

Bring the noise.
Cheers.............


    Norman Spinrad wrote a book, I think it was Child of Fortune??  where they had a dole that anyone could go on any time they wanted.  You got a cot to sleep on, clothes to wear, and food to eat.  The food was bland and tasteless, the cot was not very comfortable, and the clothes were plain and baggy.  The upside was there was no paperwork or distribution problems.  Anyone, even the very rich could come and get some, if they wanted to.  
   In a way, it was the perfect safety net.  Sounds like what you're looking for.   Guaranteed subsistance, and if you want more, you have to work for it.
Dark Vengeance
Delinquents
Posts: 1210


Reply #28 on: September 14, 2004, 08:20:47 PM

Quote from: Zaphkiel
Why do you see treating investors exactly the same as everyone else "beating up" on them?   Personally, I think the stock market could use a bit of sales tax. It would make people invest in things for the long term.


Because I see a difference between someone purchasing a tangible product or service, and putting capital into American companies so they have the capital to expand and grow. Indeed, investors get an ROI....that's why they invest. And everyone benefits from it when the company is successful. Company gets capital, hires employees, employees produce a product or provide a service in exchange for wages, company profits, investor gets a piece on that profit. Granted, when a company fails, the company and the investor have a lot to lose....but nothing ventured, nothing gained.

To do anything to discourage investing is stupid.....people that expect to retire on nothing but a savings anymore are deluding themselves. The young poor or middle class guy making an investment to plan for his future is more likely to be discouraged by a tax than the investment banker anyway (although their ROI needs to be higher, thus risk tolerance decreases).

Likewise it is stupid to institute a policy that encourages a specific type of investment strategy, particularly one that does not meet the needs of most investors. Long-term investments are not always the smart decision. There are plenty of times when making a short term investment is the proper move, especially in volatile industries. Many of these risky investments end up becoming innovative businesses, which contribute to our society at large.

Quote
It would tend to make CEOs THINK about the long term.


You make long-term investments based on sound fundamentals, and typically on a proven business. Long-term investing is betting on the tortoise instead of the hare.

Unfortunately, not every business or business concept is a safe bet....some just have an inherent amount of volatility and risk not found in other investments. Those risks have the potential to yield even greater rewards....and some of those risky business ideas come to fruition and become innovative, revolutionary companies.

Investors always want to see gains...gains in revenues, profits, profit margins. No matter what kind of tax you add, you don't change that. If I have money in a company that is losing money, I'm better off getting my money out, or putting it elsewhere, and waiting until the storm is over. Bear and bull markets, man.

Seriously, I'd be interested to see your portfolio, based on your statements here.

Quote
401k's are fine, keep them as they are.


401(k) investments are made prior to any deductions for INCOME TAX. No income tax = no 401(k) exemption from said income tax. "Keep it the same" isn't an option.

Bring the noise.
Cheers.............
Dark Vengeance
Delinquents
Posts: 1210


Reply #29 on: September 14, 2004, 08:32:10 PM

Quote from: Zaphkiel
In a way, it was the perfect safety net.  Sounds like what you're looking for.   Guaranteed subsistance, and if you want more, you have to work for it.


Making such things tax-free is a long way from simply handing them out.

Bring the noise.
Cheers............
Roac
Terracotta Army
Posts: 3338


Reply #30 on: September 14, 2004, 08:32:34 PM

Ok, wait.  Instead of the wealthy carrying more of the burden, since they garner more of the reward, the cost gets to be spread equally to all people, even if the means of all people are very unequal.  "The poor" get to be exempt, but those just above the line of "the poor" get to pay full tilt.  In addition, it penalizes people who spend money, in an economy that is entirely consumtion driven.  That is, our economy is run on the premise that we want people to spend as much money as they earn as we can get them to, but we want to change it to penalize them for doing it.

What the hell, is the government hiring MMOG devs to design economies now?  Ooh, I know, how about a faucet-drain driven economy?

-Roac
King of Ravens

"Young people who pretend to be wise to the ways of the world are mostly just cynics. Cynicism masquerades as wisdom, but it is the farthest thing from it. Because cynics don't learn anything. Because cynicism is a self-imposed blindness, a rejection of the world because we are afraid it will hurt us or disappoint us." -SC
Margalis
Terracotta Army
Posts: 12335


Reply #31 on: September 14, 2004, 10:31:22 PM

Does it really matter that much? In the end, the US is paying the same amount in taxes total.

I think less taxes would make most people happier than a different tax system, esepecially if that system is a national sales tax.

What's weird is that the Democrats are usually regarded as "tax and spend", while the Republicans have morphed into "spend and spend." Where is the "don't tax OR spend" party?

The choice now is spend a lot and pay for it, or spend a lot and create record deficits...the new Republican idea seems to be that they can spend as much or more than Dems, but tax less..."fuzzy math" GW!

The other day I saw an article refer to Bush as a "big government Republican." Lol. This is what people mean when they say they can't tell the parties apart. "I'm a Republican that believes in heavy government regulation, cops in the bedroom, and increased size and cost of government with more government intrusion!"

What ever happened to smaller government, no cops in the bedroom, right to privacy, no big brother, etc etc. Now the Democrats are the ones against Big Brother? It's hard to keep track. All this "triangulation" strategy of stealing the other guy's platform, plus catering to different bases is just becoming a mess.

So now, Republicans are for:
Heavy handed FCC regulation of content for morality. (but not regulation of what they are actually supposed to regulate)
Cops in the bedroom, amendments in the constitution regarding who can fuck who consensually. (Good thing to be spending time on!)
Increased government regulation of education. (States rights? Nope)
Database records of every citizen's habits and info.
Missions to Mars.
Increased spending.
Increased size of government.

Aren't these all things that just 10 years ago we would have said the Republicans were against?

I don't think it really has much meaning to be a Republican anymore. Fiscal conservative has meaning, neo-con has meaning, moral/religious conservative has meaning...but Republicanism is pretty watered down these days. Pro-business and what else?

To be fair, you can make a lot of the same points about Democrats.

I remember laughing at the last VP debates when Cheney and Lieberman kept agreeing on everything, and finally the moderator flat out asked if there was anything they disagreed on. That's just sad.

You would figure that if you had only 2 parties they would be polar opposites.

vampirehipi23: I would enjoy a book written by a monkey and turned into a movie rather than this.
Zaphkiel
Terracotta Army
Posts: 59


Reply #32 on: September 14, 2004, 10:56:49 PM

Quote from: Dark Vengeance
Quote from: Zaphkiel
Why do you see treating investors exactly the same as everyone else "beating up" on them?   Personally, I think the stock market could use a bit of sales tax. It would make people invest in things for the long term.


Because I see a difference between someone purchasing a tangible product or service, and putting capital into American companies so they have the capital to expand and grow. Indeed, investors get an ROI....that's why they invest. And everyone benefits from it when the company is successful. Company gets capital, hires employees, employees produce a product or provide a service in exchange for wages, company profits, investor gets a piece on that profit.
..


   Sorry, but no.  Investors are buying a product the company produces just as much as the people buying the washing machines.  They should be treated the same.  The dollars that come into a company from selling products have the same pictures of Washington on them that the sale of stock produces.  They both get used to hire employees, expand, etc..
Dark Vengeance
Delinquents
Posts: 1210


Reply #33 on: September 14, 2004, 11:43:39 PM

Quote from: Zaphkiel
Sorry, but no.  Investors are buying a product the company produces just as much as the people buying the washing machines.  They should be treated the same.


The "product" being a piece of paper....it's an intangible. You'd be better off comparing it to insurance than a washing machine. And that's fine...I don't think we should tax insurance premiums either.

Quote
The dollars that come into a company from selling products have the same pictures of Washington on them that the sale of stock produces.  They both get used to hire employees, expand, etc..


The difference of course being COST OF GOODS SOLD on products or services sold to the public. Those goods have an intrinsic value in and of themselves.

Stock certificates have no intrinsic value, and cost virtually nothing to create....hell, the stock you buy today could be worth absolutely NOTHING by tomorrow. The investor takes on a RISK, with no guarantee of getting anything in return. The point of taking that risk is SPECIFICALLY to provide capital to the company.....if the company turns that capital into a profit, the investor benefits. THE ONLY WAY THE INVESTOR GETS ANYTHING OUT OF THIS "PURCHASE" IS IF IT RESULTS IN A SUFFICENT ROI.

By comparison, if I buy a car and the company takes my money and uses it to improve their productivity and/or efficiency, do I get anything for that? NO. I paid my money, I got a car.

Bottom line is that you're comparing apples and oranges here.

Bring the noise.
Cheers.............
Arnold
Terracotta Army
Posts: 813


Reply #34 on: September 15, 2004, 12:47:56 AM

Quote from: SirBruce
National Sales Tax is a great idea.  My only concern would be the short-term effect on consumption.

Bruce


Probably good, as in LESS.  Americans consume way too much; we appear to be obsessed with it.  We need a little more conservation.  When 9/11 happened, did our "conservative" president tell us to tighten our belts to free resources for his "war on terror"?  NO, he said, "GO SPEND, SPEND, SPEND IF YOU ARE A REAL AMERICAN!"
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