National Sales Tax

[Roac]

Taxing specific assets is a far cry from taxing total assets

Reread.  There are property tax, car tax, and inflation.  That means they tax the largest two assets, and the bulk of most people's wealth, directly.  Inflation hits every bit of your money; bonds, stocks, savings accounts, what's in your wallet.  It is taxation; the government controls how much printed money is in the system.  Their goal is to maintain a very tight grip on inflation at a couple percent - meaning the dollar in your pocket loses half its value in about 30 years.  If you had a million dollars, liquid, you'd lose about 25k in value over a year.  That's more than some people's salaries.  

No, the government doesn't tax everything.  They'd have a hard time trying - I guess I could stock up on gold bars, but they don't do much for me.  They'll dodge inflation (more or less - depends on the supply/demand of gold, but assume it here), but they aren't entertaining - like about anything I could buy (spend incentive), nor do they acrue wealth like investment (economic assist).

[Dark Vengeance]

Reread.  There are property tax, car tax, and inflation.  That means they tax the largest two assets, and the bulk of most people's wealth, directly.  Inflation hits every bit of your money; bonds, stocks, savings accounts, what's in your wallet.  It is taxation; the government controls how much printed money is in the system.  Their goal is to maintain a very tight grip on inflation at a couple percent - meaning the dollar in your pocket loses half its value in about 30 years.  If you had a million dollars, liquid, you'd lose about 25k in value over a year.  That's more than some people's salaries.

Inflation indeed reduces the purchasing power of the dollar in our economy, but you're fishing here. It isn't a direct tax, as it doesn't take money from you. It's a simple reduction in the value of individual units of currency due to increased supply. Moreover, it hits the value of every dollar equally.....quite different than A GRADUATED TAX ON TOTAL ASSETS, as was suggested earlier in the thread.
 

No, the government doesn't tax everything.  They'd have a hard time trying - I guess I could stock up on gold bars, but they don't do much for me.  They'll dodge inflation (more or less - depends on the supply/demand of gold, but assume it here), but they aren't entertaining - like about anything I could buy (spend incentive), nor do they acrue wealth like investment (economic assist).

Actually, I have some money invested in gold...the price of gold per ounce does, of course, fluctuate....but it's considered a pretty stable investment. I have money in the foreign currency markets too. Just part of diversification.

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

[geldonyetich]

I sure hope this proposed Sales Tax replacement is applied to purchases made outside of the United States as well.   Heck, even I have the internet, I can buy things from outside of the country easily.   If there's one thing that MMORPGs have taught me about economies, it's that people will take the path of least resistance whenever it's offered.    You'd get an economic double-whammy, not only are people not paying taxes by buying things from outside of the United States, but they are not supporting american businesses anymore.

[Roac]

[Inflation] isn't a direct tax, as it doesn't take money from you.

Yes it does.  The government isn't ripping money out of your pocket, as with income tax, but the value of your dollars drops overtime, and it is intentional.  It's a very intentional way for the government to cut your wealth by ~2.5% every year.  

Actually, I have some money invested in gold...

Yes, so do a lot of people, and it's very stable - because it's value doesn't change (mostly), while that of the dollar does.  Gold roughly matches inflation, and carries little risk compared to other investments, so conservative investors put a fair chunk of their money into it.  In truth however, you are not earning money by investing in gold, just preventing the government from hitting you up for investment.  To make things worse, you still are likely paying taxes; income tax when you sell them for profit, and sales tax if you literally bought a gold bar at a store (as opposed to through a mutual fund, etc).

And it is a tax because the government is using inflation as a tool to control concentration of wealth.  If the total sum of printed US bills in the world were $100 (simple example), and you and I each had $10, and the government decided one day to print another $100 - we effectively just got taxed for 50% of our wealth.  Instead of having 10% of the market each, we now have 5%, and the government has at least half.  The government took half our wealth - and half the wealth of the people holding the other $80 - and put it in their pocket.  It doesn't matter here that the government isn't physically taking away the dollar bills in your pocket; it works to their advantage that they don't, because people (like you, apparently) don't understand how it's affecting their personal budget, and that it has the same effect and similar goals to a tax.

[eldaec]

Sales tax works pretty well over here in Europe.

Most countries apply a higher rate to shit you don't need higher than to, say, food ('essentials' basically food, clothing, and printed material get a zero rating here in the UK), which works to stop it being excessively regressive.

It's also extremely cheap to administer, unlike, for instance, income tax.

Most importantly though it gives government a solid macro economic tool they wouldn't otherwise have. Want to encourage saving and slow consumption? Reduce income tax, increase sales tax. Want to encourage consumption at the expense of saving? Vice versa, and you can do either one without any net impact on total tax income or spend.

Most countries have a sales tax these days, it is not the end of the world.

[eldaec]

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.

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

There is a difference, and it relates to the way rebates work if you buy something, process it, and sell it on.

They look exactly the same to the consumer however.

[Dark Vengeance]

Yes it does.  The government isn't ripping money out of your pocket, as with income tax, but the value of your dollars drops overtime, and it is intentional.  It's a very intentional way for the government to cut your wealth by ~2.5% every year.

If you want to press the pedantic point that inflation diminishes the value of the dollar, fine. I've already conceded as much, and that it has the same net effect SIMILAR to taxation. It still does not make it a DIRECT TAX, akin to income tax or property tax. You've even said so yourself.

It does not remove dollars from your pocket...it merely diminishes the purchasing power each unit of currency has. Yes it has the same effect and similar goals.....but that doesn't change the fact that it IS NOT A TAX.

Unless you can change the definition of "tax" or "inflation, you're SOL on this one. You're arguing against "inflation doesn't take away money" by talking about the relative value of money. Inflation reduces

But yknow what....compare it to the suggested GRADUATED TAX ON TOTAL ASSETS in the thread. Inflation reduces the value of the dollar...and that effects EVERYONE.

Yes, so do a lot of people, and it's very stable - because it's value doesn't change (mostly), while that of the dollar does.

What's your point? That gold is less volatile than the dollar? Absolutely. Are you getting real gains in value? Not really....but if you can use such investments to RETAIN value while others lose that value to inflation, it is a net gain.

Now it's not the aggressive growth investments that stocks can be, but it is at least better than holding onto the raw currency, or sticking your funds into a non-interest-bearing account.

Moreover, it does act as a stabilizing force in my portfolio, balancing out some of the bigger risks I take elsewhere. So it does provide another benefit that isn't readily apparent...some additional peace of mind in a tough market.

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

[Johny Cee]

[Inflation] isn't a direct tax, as it doesn't take money from you.

Yes it does.  The government isn't ripping money out of your pocket, as with income tax, but the value of your dollars drops overtime, and it is intentional.  It's a very intentional way for the government to cut your wealth by ~2.5% every year.  

Actually, I have some money invested in gold...

Yes, so do a lot of people, and it's very stable - because it's value doesn't change (mostly), while that of the dollar does.  Gold roughly matches inflation, and carries little risk compared to other investments, so conservative investors put a fair chunk of their money into it.  In truth however, you are not earning money by investing in gold, just preventing the government from hitting you up for investment.  To make things worse, you still are likely paying taxes; income tax when you sell them for profit, and sales tax if you literally bought a gold bar at a store (as opposed to through a mutual fund, etc).

And it is a tax because the government is using inflation as a tool to control concentration of wealth.  If the total sum of printed US bills in the world were $100 (simple example), and you and I each had $10, and the government decided one day to print another $100 - we effectively just got taxed for 50% of our wealth.  Instead of having 10% of the market each, we now have 5%, and the government has at least half.  The government took half our wealth - and half the wealth of the people holding the other $80 - and put it in their pocket.  It doesn't matter here that the government isn't physically taking away the dollar bills in your pocket; it works to their advantage that they don't, because people (like you, apparently) don't understand how it's affecting their personal budget, and that it has the same effect and similar goals to a tax.

A little clarification,  because you're only partially right.

Inflation IS a direct tax when the government increases the RATE of inflation.  Generally referred to as siegnerage....  crap, can't spell it.  Basically, look at the massive inflation in Russia and Latin America in the 90's as your examples.  

In your example,  assume either devaluation if the money supply is constant and not being replaced, or a low rate of 2-4% if the gov't is replacing money regularly,  while introducing small amounts of new money or has GDP growth.  By printing another $100 dollars,  it's forced inflation from a couple percent to 100%.  

But the government doesn't net that entire difference.  In fact,   inflation will continue for some time AFTER the increase in money supply because peoples expectations affect the rate of inflation.  DV and Roac will obviously expect the government to print more money,  so will use their money to buy physical assets or foreign currency.  Supply of money will increase,  dropping it's price/value.  Also, as inflation worsens,  people will proactively devalue money to when they can actually spend it.

Essentially,  it's a ruinous cycle that leads to hyperinflation as the government's new printing of money will be devalued BEFORE it is introduced into the economy.  Plenty of stories from Russia about people standing in line for bread,  but by the time they get to the counter their money has lost a large portion of it's value.  Generally at this point people move to barter or they Dollarize.

In most developed nations,  there is a very low rate of inflation that has as much to do with GDP/purchasing power growth as it does with government's printing money.  There are many times the number of dollars "on paper" in bank accounts or ledgers or whatever as there are actual dollars,  and the government only prints enough to replace current supply.  Of course,  it's mostly interest rates/debt driven now, as well.

Summation:  Inflation in most developed nations is NOT a form of direct taxation currently.  A little creative work with the printing press/interest rates is needed first.

[Righ]

We should just give the rich people guns and the poor people sticks, and let them kill each other right now. It all sounds good until you realise how many fucking people we've made improverished in our reenactment of monarchy.

Federal sales taxes are one step closer to the big proletariat beat down.