Question for the US Citizens. - Page 3

B-Line · #21 08-13-2007, 07:45 PM

Ok,

What about this.. Of course there are probably examples why it would not work, but just for the fun of it:

Eric, you say we need to suspend Sales Tax... What if we go the complete and opposite direction. What if there is no income tax and there is no capitol gains,

So what if we did away with ALL taxes, except SALES TAX.. You only pay taxes on what you spend. You buy a car, you pay tax. You buy a house, you pay tax. You buy clothes, you pay tax.

So instead of the gov't taxing my wages, they are taxing my spending.. The percentage will always stay the same, but the amount of tax you pay will change determined by what you are buying.

B

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Eric5273 · #22 08-13-2007, 08:33 PM

Quote:

Originally Posted by B-Line

Ok,

What about this.. Of course there are probably examples why it would not work, but just for the fun of it:

Eric, you say we need to suspend Sales Tax... What if we go the complete and opposite direction. What if there is no income tax and there is no capitol gains,

So what if we did away with ALL taxes, except SALES TAX.. You only pay taxes on what you spend. You buy a car, you pay tax. You buy a house, you pay tax. You buy clothes, you pay tax.

So instead of the gov't taxing my wages, they are taxing my spending.. The percentage will always stay the same, but the amount of tax you pay will change determined by what you are buying.

B

Then you are in favor of a regressive tax (taxing poor people a higher percentage than rich people). Poor people, by necessity, spend a higher percentage of their earnings than rich people -- most of whom save a fair percentage of their earnings. Therefore, poor people will end up being taxed a higher percentage of their earnings.

In addition, you are favoring a tax system which discourages spending -- something that most economists would tell you will hurt the economy. A good healthy economy is one that encourages people to spend their money.

The end result of such a system, compared to the current system, will be that poor people will be taxed 3-4 times as much as they are currently, middle class people will be taxed 2-3 times as much as they are currently, and wealthy people will be taxed less than half of what they are currently. Be prepared to have mass poverty and the complete elimination of the middle class.

MD11F · #23 08-13-2007, 09:28 PM

Quote:

Originally Posted by Eric5273

Then you are in favor of a regressive tax (taxing poor people a higher percentage than rich people). Poor people, by necessity, spend a higher percentage of their earnings than rich people -- most of whom save a fair percentage of their earnings. Therefore, poor people will end up being taxed a higher percentage of their earnings.

In addition, you are favoring a tax system which discourages spending -- something that most economists would tell you will hurt the economy. A good healthy economy is one that encourages people to spend their money.

The end result of such a system, compared to the current system, will be that poor people will be taxed 3-4 times as much as they are currently, middle class people will be taxed 2-3 times as much as they are currently, and wealthy people will be taxed less than half of what they are currently. Be prepared to have mass poverty and the complete elimination of the middle class.

Bad idea unless you place a means test on it.... exemption for anyone making less than a certain amount.

Ishniknork · #24 08-14-2007, 03:24 AM

Quote:

Originally Posted by Eric5273

What you propose will result in some people having to pay more in taxes than they earn.

I'll use as an example a professional boxer:

A well-known boxer makes $10 million for a championship fight. That is what his paycheck is for: $10 million.

He then is required by contract to pay $3 million to his manager, $1.5 million to his trainer, $750k to the assistant trainer, and another $500k to his supporting staff who helped him during the 8 weeks of training and preperation. He has to pay $100k for renting the training facilities for 8 weeks, $300k for his entire staff to have room and board during the training, $50k for travel and hotel expenses for his entire staff, etc.

Let's suppose that by the time he is done paying out all his expenses, he is left with $3 million. Yet, according to the tax law, he is required to pay 35% of his income in taxes. His "adjusted gross income" is $3 million. If you require him to pay taxes on $10 million, he will end up having to pay more than he earns.

While most people do not encounter such high expenses, there are quite a few professions that work like this. The IRS allows you to work as an "independent contractor" which means you can deduct all your expenses and only pay taxes on your "adjusted gross income". Without this, many professions could not exist.

I see what your saying. I just didn't go into enough detail. The boxer would be his own "business" as an independant contractor but would only pay tax on his own 3 million. The people he paid that worked for him would pay the rest of the tax on the money he paid them. But I suppose he would have to provide records for what he paid out. Therefore, the damed "Adjusted Gross Income" thing would still be necessary.

I started to say in my post that businesses and corporations would only pay tax on the money they retained after paying all salaries/wages. You know, that money they have leftover that they won't give raises with? (

) Things like electricity, buildings, property taxes, etc. are their responsibility as the cost of doing business.

Main thing is after all is said and done everyone pays the same percetage for their tax.

He-he, get this. I'm watching a show right now that says businesses and corporations allow a person concessions on taxes that an individual cannot take! Gaining hundreds of tax write-offs!

LVR · #25 08-14-2007, 08:35 AM

Quote:

Originally Posted by Eric5273

Then you are in favor of a regressive tax (taxing poor people a higher percentage than rich people). Poor people, by necessity, spend a higher percentage of their earnings than rich people -- most of whom save a fair percentage of their earnings. Therefore, poor people will end up being taxed a higher percentage of their earnings.

In addition, you are favoring a tax system which discourages spending -- something that most economists would tell you will hurt the economy. A good healthy economy is one that encourages people to spend their money.

The end result of such a system, compared to the current system, will be that poor people will be taxed 3-4 times as much as they are currently, middle class people will be taxed 2-3 times as much as they are currently, and wealthy people will be taxed less than half of what they are currently. Be prepared to have mass poverty and the complete elimination of the middle class.

Gotta disagree with ya on this one.... In Australia we had this debate a number of years ago and an election was fought (and won) over it. It's called GST (Goods and Services Tax) and replaced a raft of other taxes. The doomsdayers predicted the end of the world, poor people on the welfare queues getting further and further behind.

The reality has been markedly different. It was set at 10%, collected by the Federal Government on behalf of the States. The states love it because it eliminates the cash trade to a reasonably large extent and as it is across the board, and is calculated BEFORE the price ie all prices inc GST (or have to be clearly marked otherwise) the general public doesn't even see it on a daily basis.

Australia has a very prosperous economy and the states now have record incomes to spend on social systems and infrastructure (whether they do or not is another matter). Accordingly, Australians have voted one side of politics in at national level (eg DEM's) and the other at state level (REP). This prevents the GST ever being increased as it requires state and federal agreement to do so.

The reality of this system is that it does not discriminate between rich or poor... you use (consume) you pay...

On a slightly different note, curious to know exactly what you guys all mean by 'flat tax' ????

Cheers

Wagner · #26 08-14-2007, 08:37 AM

Careful LVR, you're using facts

Eric5273 · #27 08-14-2007, 12:16 PM

I guess I don't see how you get around the fact that poor people, by necesity, spend a higher percentage of their income than rich people. If you were to eliminate this sales tax on items like food and rent, then I can see how it would work.

MD11F · #28 08-14-2007, 12:33 PM

Quote:

Originally Posted by Eric5273

I guess I don't see how you get around the fact that poor people, by necesity, spend a higher percentage of their income than rich people. If you were to eliminate this sales tax on items like food and rent, then I can see how it would work.

like I've said already... you means test it. If you're making X/per year you don't pay ANY tax.

Eric5273 · #29 08-14-2007, 01:30 PM

Quote:

Originally Posted by MD11F

like I've said already... you means test it. If you're making X/per year you don't pay ANY tax.

I see how that would work as far as an income tax goes, but you could not implement that with regards to a sales tax.

View Poll Results: Flat Tax vs Income Tax
Yes - Flat Tax is the way to go.	25	86.21%
No - Income Tax is the only fair way to tax citizens.	4	13.79%
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