Tax reform

[Felix_Nietsche]

"Are you saying that raising the direct cost to the consumer by 23% would have no effect on his buying habits? Sorry, but I find that view naive."
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No.....that is not what I'm saying.
I was making the point if we remove the 'hidden' taxes from goods and services and then we replaced it with a sales tax, the costs would be fairly close to each other...


Just for fun. Lets say a person makes $100K per year and they pay $30K per year in income taxes which leaves them a take home pay of $70K (lets ignore SS taxes to makes things simple). The have a spending power of $70K. Now lets eliminate the income tax and place it with 23% sales tax. Now the person has $100K in take home pay. If they spend all $100K in a year then their spending $81K on goods/services and $19K(assuming 23%) on taxes. Since $81K > $70K, then is it not true that the tax payer is better off with the sales tax? As for businesses, if they can eliminate most of the record keeping overhead, then they can sell their product/service for a lower price....which again benefits the consumer...

Foreign tourists could get stuck paying the sales tax but if congress chose to they could pass laws allowing tourists to save receipts and get a rebate if they chose to... US products sold overseas are not subject to the national sales tax but are subject to foreign tariffs...

As for paying higher financing to avoid the national sales tax, there are solutions to every problem... If someone finds a loophole to avoid paying the sales tax, then congress has the power to close it...

[InchoateHand]

Here's my tax solution. Get rid of 90% of government programs. Keep the military, the courts, law enforcement, a very few others. Get rid of everything else. We make taxation voluntary. Donations can easily support the dramatically reduced budget, along with a little bit of an inflation tax. And get this, people actually keep what they earn. And here's the kicker, if they don't earn it, they don't get it. At least not from the government. I'm guess without taxation, there'll be more tyhan enough private charity to make up the difference for those who really need it.

[Dead]

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Get rid of 90% of government programs.

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Inchoate! [img]/images/graemlins/shocked.gif[/img] [img]/images/graemlins/confused.gif[/img]

It's good to see you coming to terms with your homosexuality. [img]/images/graemlins/smirk.gif[/img]

[James Boston]

DISCLAIMER: I have NOTHING to back this up, but still beleive it to be 100% true.

I actaully think lowering, or eliminating, these taxes could be good. Since corporations are legal entities unto themselves, the decision makers are making their decisions based on priorities. I believe the list goes as such:

1) CEO's, high-ranking officers, etc...
2) shareholders (which include all of group 1 usually)
3) consumers
4) employees

3 & 4 are always going to get screwed when 1 & 2 try to ensure they still get plenty of money. So why not create a system where we go after the money from 1 & 2 directly rather than tax a legal entity where the tax will get passed on to 3 & 4.

[jakethebake]

Tax the rich. Seriously. Those fuckers get away with murder.

[James Boston]

That's basically my point. If we want to get "corporate tax dollars," we have to get it from those who end up with it. Taxing the corporation allows a handful of decision makers to decide where the effects of taxation will be felt, and it ain't in their bank account. Tax them, not the money they control.

[jakethebake]

The problem with this, however, is that the same money will simply be diverted back to the corporation---suddenly the CEO will live in a house owned by the corporation (and thus avoid paying taxes on it), he or she will have umpteen first class tickets to wherever, and they will be "corporate" business. Basically, if you only tax a CEOs income, you encourage them paying themselves with even more outlandish perks than they already enjoy. Its a catch-22 and I don't see a simple way to rectify it, though intuitively I agree with your assessment.

[Dead]

What's up with all this CEO hatred?

CEOs are the greatest people in the world. They provide all the goods and services to people on welfare. They should be given large tax breaks for their trouble.

[natedogg]

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If we want to get "corporate tax dollars," we have to get it from those who end up with it.

[/ QUOTE ]

There are no "corporate tax dollars". Corporate taxation is a tax on employees and consumers, period. This is basically fundamental economics. You gain no ground taxing corporations.

natedogg

[James Boston]

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They provide all the goods and services to people on welfare.

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I have no idea what that means.