Don't take my word for it, it's better explained in Emancipating America from The Income Tax.
Government Services and PurchasesThe question of the proper tax treatment of government services--such as municipal garbage collection, utilities, visits to national parks, and rides on Amtrak--presents special problems. [56] To the fullest extent possible, a national sales tax should provide parity between government services and private services. Excluding commercial activities of the government from the tax base would provide a tax advantage when government is competing with private providers of services. Hence, when the government sells a good or service, such as public transit or publications, the sales tax should be imposed on the sale price. [57]
The complication is that most government goods and services are not sold in the marketplace. They are often given away and in many cases no market price exists for the services in question. Moreover, the recipients or beneficiaries of the services are unclear or unknown. For example, how would we allocate the benefits conferred on the public by national defense, the State Department, the Environmental Protection Agency, National Public Radio, or the White House?
Taxing this part of the economy is not as administratively simple under a sales tax as it is under an income tax. Government services are taxed by both the current graduated income tax and the flat tax--through the income tax imposed on government workers' wages and salaries (i.e., most of government value added). One conceivable way to tax government fully and equally under the NST system would be to impose a separate excise tax on government wages. That is the approach we have adopted in this study. [58]
The complication is that most government goods and services are not sold in the marketplace. They are often given away
Given away?....that shows what he thinks of the confiscation of our money to the government.
BTW, it's interesting they noted NPR as a government service in the same breath as the powerhouse agency's "national defense, the State Department, the Environmental Protection Agency, or the White House?"....All supported by taxpayers only to be taxed once again under your fraud...but of course before a sales tax is imposed those "services" are just "given away" aren't they?
Want another?
The most popular was the one introduced by the gentleman from Georgia (Mr. LINDER). He is touting this as a national sales tax, and the rate he pegged within the committee was 23 percent. Upon questioning, we found out that it is not 23 percent, it was almost 30 percent, on every good and service produced in this country, prescription drugs, funeral services, everything. We talked to the Joint Committee on Taxation, which is a scientific committee, to give us expertise. They said that national sales tax, to be revenue neutral, would have to be a 59 percent rate. Is that what you are going to replace the current code with?Interesting, I asked the gentleman a question. I said, Mr. LINDER, would the national sales tax apply to wages for municipal employees? He said, Oh, no, [Page: H2274] GPO's PDF no, no, no. Then one of his staff persons poked him on the back and said, it is in the bill.
It is in the bill. So the authors do not even know what their proposal is. As the questioning developed, your municipality would have to pay the Federal Government 30 percent of their municipal wage base, because it is a service. And where would your municipalities get the money from? They would radically increase the property tax. In the City of Milwaukee, that would be a very, very bad mistake, because property taxes are relatively high.
Sorry...You are wrong again as usual. "Any government" wages salary and benefits would be subject to your phony sales tax...and this further illustrates how mislesding your use of "sales tax" is.
It is in the bill. So the authors (and you) do not even know what their proposal is.
To suggest that government "services" like national defense or the White House or any other's for that matter would be funded by a sales tax only to be taxed once again as a "service" is nothing short of fraud, not to mention the HUGE increase in the cost of government.
Your plan starts with a lie in it's "sales tax" title, then continues the lie with the rate, then YOU have to lie because it can't stand on it's own merits.
Simply put, your plan sucks.
Good article, discussing the problems inherent in both income taxes and sales taxes as well. Mastromarco does an excellent job of clarifying the issues that need to be addressed. Everyone should read it in its entirety. I'm glad you pointed it out.
Another good paper by Mastromarco is here discussing the same subject in additional detail:
Everyone should read that as well.
As far as your other quote lewislynn, why didn't you give us your source so we all could find out who is speaking and in what context.
Here at least is a link you should have provided or at the source you should have cited.
Refer: 12. DATE CERTAIN TAX CODE REPLACEMENT ACT, House Congressional Record April 13, 2000 pages H2259-H2282; speaking of a memo regarding the Joint Tax Committee's assessment of the total Federal tax rate as a percentage of family consumption expenditures based on Clinton administration expectations for government growth in program funding.
I note from the Congressional record page H2273, the speaker you are citing is
"Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from Wisconsin (Mr. KLECZKA).
Mr. KLECZKA. Mr. Speaker, I thank the gentleman from New York for yielding me time."
Mr. Kleczka is Rep. Gerald Kleczka (D Wisconsin 4th district); Such a conservative fellow, You know, like in Republicans want to throw old people in the streets and starve babies DEMOCRAPS, arguing against throwing out the INCOME TAX.
Analyzing to statements of Rep. Frost(D-Texas) House Democratic Caucus chairman, Rep. Kleczka(D-Wisconson) and other House Democratic Caucus members, the House Democratic Caucus hoped to be able raise total federal taxes across 5 years to 59.5% of family consumption expenditures. That indicates a whopping 37.3% of gross family income, more than 1.5 times the effective total federal tax rate(24.2%) born by the nation's familys in 1999 as estimated by CBO.
59% over five years(11%/annum) is the increase in tax rates that the DEMOCRAPS (read Joint Tax Committee) wanted and you are supporting that?
It is not the tax rate of the NRST, nor will it ever be.
What Rep. Kleczka doesn't say is he and his Folks want to increase the income/payroll tax enough to ensure they have that much. The chart he is referring to reflects Democrap hopes for us.
Tell us lewislynn, if every voter is required to pay the same tax rate without exception, just who is going to support any Congress Critter with the temerity to propose a 60% tax rate on every person in the country?
Get real.
In response to your and the Chairman of the Democratic Caucus, Representative FROST (D), Charlie Rangle(D) and your MR. KLECZKA shall we see what the Republican, side of this issue is? Since we have clearly seen where the DemonCraps lie..
I believe we should hear "the rest of the story."
Rep Linder, a Republican supporting the repeal of the income tax, Refer: 12. DATE CERTAIN TAX CODE REPLACEMENT ACT, House Congressional Record April 13, 2000 Page H2266
"Mr. LINDER. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, the IRS has made criminals of us all, and it is time for it to go away. And that is what this is about, scrapping the code. This is real. Now, it may be a joke for Democrats, who have spent 40 years building up this monstrosity, but this is very real.
And there are some very real proposals to replace it, proposals that have been studied for years. My proposal, which has been ridiculed today, has been studied for over 3 1/2 years, with $15 million spent in universities from Harvard to Boston College to MIT to Stanford to Rice, and none of them came up with a 60 percent tax rate.
Guess who did? A committee whose members have their entire political capital invested, or their intellectual capital invested in the Tax Code. They would lie to get this thing defeated, because we have depreciated their intellectual capital if we get rid of all the income taxes and all the difficulties and the taxes are transparent and easy to understand. They will not be needed any more.
If we get rid of this Tax Code with a single transparent, straightforward, simple sales tax, Americans will know what it costs every time they buy something, what it costs for government. What they are not telling the American public is that currently, as the gentleman from Ohio pointed out, we know that 22 to 25 percent, according to various studies, of what taxpayers currently pay for at retail is the current embedded cost of this tax system.
They would rather have a hidden tax than a transparent tax because they know, if taxpayers saw how much government was costing them, they would rebel and ask us to reduce the role of government in their lives. We are currently paying it. It is hidden. They like that.
This income tax was originally intended and promised to only tax the top 2 percent of the income earners in America. That was the promise that was made in 1913. And indeed, if we think back to the last two tax increases, 1990 and 1993, the promise was made we are only going to raise the taxes on the top 1 percent. Well, guess what? In 1990, the top 1 percent paid $106 billion in taxes. And after the tax increase on them, the following year they paid $100 billion. Because rich people are often smart people, they can find ways to rearrange their income.
But each of these tax increases, that these folks so love, reverberates through the system and we all pay. We all pay. All we want is to get rid of a monstrosity that no one understands; that confuses every taxpayer and keeps hidden what the actual cost of government is, and then let us have a debate on what to replace it with. It may not be my tax bill; perhaps it will be the bill offered by the gentleman from Texas (Mr. ARMEY) or the gentleman from Ohio (Mr. TRAFICANT) or the gentleman from Louisiana (Mr. TAUZIN). But it will be simpler, more understandable, and it will be fairer.
One of my favorite stories about the 1913 debate on the 16th amendment to impose the income tax was that one of the Senators was ridiculed and laughed off the floor of the United States Senate for saying something absolutely
outrageous. He said this: ``Mark my words, before this is over, the government will be taking 10 percent of everything you earn.'' It was considered so outrageous by his colleagues that they ridiculed him off the floor of the Senate.
I feel certain that is what gave fresh meaning to my favorite country western song, ``If 10 Percent Is Enough for Jesus it Ought to be Enough for Uncle Sam.''
SEE: Democrats Planning for Rise of Total Federal Tax Rate to 37% from current 23%