Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look

[dbackjon]

Levy Viewed as Way to Reduce Deficits, Fund Health Reform

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

http://www.washingtonpost.com/wp-dyn/co ... 02909.html

[Col Hogan]

If we keep the current income tax structure, and just add a VAT on top...that will be the killer for the middle class in this country...

The Cato Institute has an interesting proposal that would eliminate the income tax (and just about all the IRS) and institute a National Sales Tax

The Cato Institute has developed a national sales tax plan with the following four features:

* An 18 percent sales tax on all final use goods and services (this is not a retail sales tax) except housing and securities. Over time the rate would gradually decline to below 15 percent.
* Every American would receive an annual rebate on the tax paid on the first $5,000 of purchases. This would mean that for a family of four, the first $20,000 of consumption during the year would be tax free.
* The states--45 of which already have an income tax--would be responsible for collecting the national sales tax. (The federal government would reimburse the states for the cost of collection. This would not constitute an unfunded mandate.) With the states collecting the tax, the federal IRS police force would be largely disbanded. With the infrastructure of the income tax system dismantled, it would be very difficult for a new income tax to be reinvented.
* A two-thirds supermajority requirement in both houses to raise the sales tax or any other federal tax.

The national sales tax is the only plan that fixes all of the defects of the current income tax system. Here is how:

1. Because the sales tax exempts all savings and investment, the double taxation problem would be eliminated. Because the sales tax is a single flat rate, the disincentive effects from high marginal rates would be eliminated. That giant sucking sound you would be hearing would be investment capital from across the globe sweeping into the United States.
2. By eliminating the income tax entirely, compliance costs- -estimated at $200 billion a year--would be substantially reduced.
3. The sales tax would virtually eliminate the Internal Revenue Service. The sales tax is the only plan that solves the intrusiveness of the current system.
4. A sales tax would be paid by consumers every time they purchased a good or service at the cash register. Because the tax would appear on the receipt, the sales tax would be highly visible to taxpayers. All purchases--from an 89 cents grape slurpee at seven-11 to a $20,000 Ford Bronco--would be taxed. Taxpayers would be constantly reminded of what a hefty price we pay for government in America today.

http://www.cato.org/testimony/ct-it68.html


Yep, it's been around since 1995...but now it's time may have come...

[AZGrizFan]

Here's a novel concept: How about we just stop spending so much fucking money?

[Cleets Part 2]

Here's a novel concept: How about we just stop spending so much **** money?

What..!!!
Jeezus man, we'd run out of stuff to complain about

[Wedgebuster]

Folks like us would resort to barter and black marketing because we would have to.

[bobbythekidd]

They are not doing away with the Income Tax, but just adding a VAT to it. Unlike the Tax plan that Col Hogan posted from the Cato Institute this is hugely regressive and over burdens the lower and middle classes. ...and AZ, they are wanting to use this new VAT to fund expanses in Heath Care.

[slycat]

Bad idea. I agree with Z, one thing at a time. Lets worry about getting out of the current recession first.

[Col Hogan]

Here's a novel concept: How about we just stop spending so much **** money?

Oh, I don't disagree...but if Washington is into messing with the tax system, the Cato Institute plan is one of the better ones out there...

[Appaholic]

Here's a novel concept: How about we just stop spending so much **** money?

Ohh AZ!... ...stop it.... ....you're killing me!... ..."stop spending money" he says!..... .....whew!....that's a good one....

[Pwns]

As long as they only go after those evil tobacco users, alcohol drinkers, and junk food eaters then I'm okay with it!

[catamount man]

it is the plan of Marxism unfolding right before our eyes and you can deny all you want, but it's total bullshit big government domination. FUCK YOU OBAMA, YOUR MARXIST PIG!!!!!!!!!!!!!!!!!!!!!!

[Ibanez]

How about the government pays taxes on everything it buys, make initiatives to bring and keep businesses in the USA, we increase the sin tax, give breaks to the Middle Class, spend more on Education, streamline the DoD, SSA and the other forgotten problems.

[native]

How about the government pays taxes on everything it buys, make initiatives to bring and keep businesses in the USA, we increase the sin tax, give breaks to the Middle Class, spend more on Education, streamline the DoD, SSA and the other forgotten problems.

Are you being sarcastic, or serious?

[Ibanez]

How about the government pays taxes on everything it buys, make initiatives to bring and keep businesses in the USA, we increase the sin tax, give breaks to the Middle Class, spend more on Education, streamline the DoD, SSA and the other forgotten problems.

Are you being sarcastic, or serious?

A little of both, why? Do you have a serious or sarcastic comment?

[native]

Are you being sarcastic, or serious?

A little of both, why? Do you have a serious or sarcastic comment?

Mark, I don't want to pick on you. I just wanted to understand where you were coming from. I can see now that some elements are farcical and some are serious.

So, my response to your original post is, "same old, same old is not going to do the job."

[Ibanez]

A little of both, why? Do you have a serious or sarcastic comment?

Mark, I don't want to pick on you. I just wanted to understand where you were coming from. I can see now that some elements are farcical and some are serious.

So, my response to your original post is, "same old, same old is not going to do the job."

Pick on me? HA HA HA! That's good.

Think about this, The government spend billions of dollars on Defense. Aside from labor costs, the gov't money used by a company to research, build or purchase products is not taxed. If the gov't paid taxes, it would essentially recover vast amounts of money. They don't pay taxes, and therefore, pay higher prices. Don't believe me? There is a company called Base-X, which builds portable shelters and thier accessories. There are two types of pricing, one is for state governments and private entities. The other is GSA aka Gov't pricing, and is sometimes $1,000's higher than "retail". Dell, Panasonic, APC, DRS Technologies, etc.. all charge the gov't more. Additionally, if our tax code was leaner, with fewer loopholes and more incentives, then business could profit more here than abroad. It's not so much a matter of more taxes, it's a matter of smarter taxes.

We keep electing crap. That's our political system, Crap In-Crap Out.

[Ibanez]

As long as they only go after those evil tobacco users, alcohol drinkers, and junk food eaters then I'm okay with it!

What about the Fornicators?

[citdog]

A NATIONAL SALES TAX, IN LIEU OF THE INCOME TAX, WOULD BE AN EXCELLENT IDEA.......FINALLY THESE ILLEGAL MEXICANS WOULD PAY SOME TAX INSTEAD OF LIVING LIKE SUBHUMAN LEECHES OFF THE LABORS OF OTHERS.

[hank scorpio]

They are not doing away with the Income Tax, but just adding a VAT to it. Unlike the Tax plan that Col Hogan posted from the Cato Institute this is hugely regressive and over burdens the lower and middle classes. ...and AZ, they are wanting to use this new VAT to fund expanses in Heath Care.

Col Hogan's posted plan is still a flat tax, you are just substituting a standard deduction for a $5,000 rebate.

Regressive in my book.

[native]

...Pick on me? HA HA HA! That's good.

I know you can hold your own and are not some fragile wall flower. It's just that I tire of the constant pissing contests which usually lack entertainment value. I admit that sometimes I give in to temptation and piss on someone's leg, and that some posters such as BlueHen and a handful of others actually work hard and consistently succeed in providing a little humor. But overall, people too often just piss and shout to no useful purpose.

...Think about this, The government spend billions of dollars on Defense. Aside from labor costs, the gov't money used by a company to research, build or purchase products is not taxed. If the gov't paid taxes, it would essentially recover vast amounts of money. They don't pay taxes, and therefore, pay higher prices. Don't believe me? There is a company called Base-X, which builds portable shelters and thier accessories. There are two types of pricing, one is for state governments and private entities. The other is GSA aka Gov't pricing, and is sometimes $1,000's higher than "retail". Dell, Panasonic, APC, DRS Technologies, etc.. all charge the gov't more. ...

I think your math and some of your assumptions are flawed. In the first place, the additional taxes you propose are not consistent with the "leaner" and "smarter" taxes you espouse. In the second place, you are not accounting for the inherent inefficiency of the administrative fees the government must charge to collect your new taxes. Finally, federal contractors pay sales taxes like everyone else on the things they buy and own. The only taxes not paid are on items purchased on behalf of the federal government and owned by the federal government.

There may be instances of surplus or differently configured items which are cheaper than GSA schedule, but a company cannot retain its GSA schedule if it does not provide the feds the best price for identically configured and packaged items. Please provide a specific example with links if you think you can prove otherwise.

[Ibanez]

...Pick on me? HA HA HA! That's good.

I know you can hold your own and are not some fragile wall flower. It's just that I tire of the constant pissing contests which usually lack entertainment value. I admit that sometimes I give in to temptation and piss on someone's leg, and that some posters such as BlueHen and a handful of others actually work hard and consistently succeed in providing a little humor. But overall, people too often just piss and shout to no useful purpose.

...Think about this, The government spend billions of dollars on Defense. Aside from labor costs, the gov't money used by a company to research, build or purchase products is not taxed. If the gov't paid taxes, it would essentially recover vast amounts of money. They don't pay taxes, and therefore, pay higher prices. Don't believe me? There is a company called Base-X, which builds portable shelters and thier accessories. There are two types of pricing, one is for state governments and private entities. The other is GSA aka Gov't pricing, and is sometimes $1,000's higher than "retail". Dell, Panasonic, APC, DRS Technologies, etc.. all charge the gov't more. ...

I think your math and some of your assumptions are flawed. In the first place, the additional taxes you propose are not consistent with the "leaner" and "smarter" taxes you espouse. In the second place, you are not accounting for the inherent inefficiency of the administrative fees the government must charge to collect your new taxes. Finally, federal contractors pay sales taxes like everyone else on the things they buy and own. The only taxes not paid are on items purchased on behalf of the federal government and owned by the federal government.

There may be instances of surplus or differently configured items which are cheaper than GSA schedule, but a company cannot retain its GSA schedule if it does not provide the feds the best price for identically configured and packaged items. Please provide a specific example with links if you think you can prove otherwise.

1. I'm a federal contractor. I am in Supply Chain Logistics. Procurement is a major duty of mine. If I purchase something for the project, using project funds aka federal money aka the govt is buying the item, taxes will not be levied. You mentioned "federal contractors" and them paying taxes on things they buy and own. Well, that's a obvious answer. Not to be a smart ass, but no shit Sherlock. Of course, you can look at the FAR(Federal Acquisition Regulation) to see the exceptions. The taxes I speak of is the opposite of how it works today. Get rid of this GSA, give the Govt a percentage off across the board since they most of the time buy in bulk, and charge a tax. As long as the company has a Cage Code(http://www.dlis.dla.mil/cage_welcome.asp), the system could possibly work and work better. This would also eliminate the instances of the govt getting screwed over. The Govt isn't solely to blame in cases of misappropriation of funds or being used by a commercial company.

2. I can not give you the link to the GSA pricing I referred to because I don't think it exists, but I'll look for the PDF file later, but you may be able to look up Base-X and see that their GSA prices are a little higher than normal prices. Most other companies will give you pricing via quote, which then you can shop online and see that retail, the product is cheaper(Dell and Panasonic, I know this for fact).

3. Remember, I claimed not to be an economist. I merely work in a system where I see the tax potential. Of course my analysis is flawed, but I am not claiming to have the answer or for my opinion to be 100% accurate.

4. All opinions, interesting or not, are irrelevant

5. I enjoy humor

6. I like Pleasure spiked with Pain

7. Tallywacker

[catamount man]

A NATIONAL SALES TAX, IN LIEU OF THE INCOME TAX, WOULD BE AN EXCELLENT IDEA.......FINALLY THESE ILLEGAL MEXICANS WOULD PAY SOME TAX INSTEAD OF LIVING LIKE SUBHUMAN LEECHES OFF THE LABORS OF OTHERS.

Mexicans do work. I can take you to plenty of other places in Greenville and show you folks not working and they speak english.

[Ibanez]

A NATIONAL SALES TAX, IN LIEU OF THE INCOME TAX, WOULD BE AN EXCELLENT IDEA.......FINALLY THESE ILLEGAL MEXICANS WOULD PAY SOME TAX INSTEAD OF LIVING LIKE SUBHUMAN LEECHES OFF THE LABORS OF OTHERS.

Mexicans do work. I can take you to plenty of other places in Greenville and show you folks not working and they speak english.

Citdog is just showing his ignorance. While illegal immigrants pay no income tax, they are working the jobs that the lazy ass ghetto and trailer trash of this country won't.

[wkuhillhound]

A NATIONAL SALES TAX, IN LIEU OF THE INCOME TAX, WOULD BE AN EXCELLENT IDEA.......FINALLY THESE ILLEGAL MEXICANS WOULD PAY SOME TAX INSTEAD OF LIVING LIKE SUBHUMAN LEECHES OFF THE LABORS OF OTHERS.

The people that work jobs that YOU don't want. Grow a pair a split tobacco one summer and see how you like it. Oh, yeah I'm sorry illegal or legal Mexicans are beneath you.