Do you? Like on gasoline? Tobacco?
30% sound about right?
I think you are right. However, Its never going to happen, all we will see is an ever evolving more convoluted tax system.
No on just about everything.
Maybe the first$15k per person should be tax free, and maybe all medical care should be tax free, but what I am talking about is a national sales tax, kinda like the sales taxes that already apply in most states.
Gasoline and tobacco have a national sales tax in practice.
Not 30%? What’s your number?
And if it replaces income tax, what will happen next? What will government have to do?
I dunno what number to use.
In general consumption taxes are better for the economy than income taxes.
Thus in general a national sales ta that replaces part of income taxes would be a good thing
The first number that comes to mind is 12.4%.
That is a replacement for
6.2% – employer portion of OASDI tax, plus
6.2% – employee portion of OASDI tax.
30% is the number in the fair tax proposal.
Then the government will have to ensure you spend every penny you make.
I don’t disagree, when applied correctly. I have lived in countries with VAT.
How are you going to adjust for the “poor” who don’t pay income tax but who do consume?
Couple ways to do that
EX’s
1.) Don’t do it at all. If it replaces the OASDI taxes then the working poor are getting net no change. Those who use EBT don’t pay sales taxes anyway.
2.) Structure it as a Consumption bae income tax (CBIT) and allow a standard deduction of, I dunno, $40,000 per household or some such.
They don’t just use EBT. And 12% use EBT. What about the other 28% who don’t pay income tax?
Now you’re cutting out consumers.
A household exemption on a sales tax? That tax is usually paid by the seller. Who would expect everyone to record every purchase they made?
In Texas, where we have a sales tax but no income tax, necessities such as food and medicine are exempt from the sales tax. If an IPad is purchased, the seller pays a sales tax regardless of their income.
What?
No food and medicine aren’t exempt.
If you prefer, they are collected by the seller and sent to the state.
With a few exceptions. Check your HEB receipt next time.
Who pays?
A consumption based income tax is easy peasy, certainly not more difficult than our current 6,781 page tax code with 68,129 pages of regulations and guidance (plus 100,000’s of pages of case law.)
Line 1) What did you earn?
Line 2) Subtract what you saved/invested
Line 3) Subtract $40,000
Line 4) Pay X% of the rest.
Your assumption that Biden should know better is problematic. You’re refering to a man who should be prescribed a helmet and geritol.
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A value-added tax is also easy peasy. (so easy they already do it in many European countries).
Joe’s Steakhouse
Pays $10 for a steak.
Cooks it and sells it for $25.
Pays tax on the $15 mark-up.
Chez Foo-foo
Pays $10 for a steak.
Cooks it and sells it for $100.
Pays a tax on the $90 mark-up.
Easier? By that standard an income tax is
- What did you earn?
- Pay x%
