Posted on 03/12/2002 9:37:30 AM PST by Willie Green
Edited on 09/03/2002 4:50:05 AM PDT by Jim Robinson. [history]
I totally agree with you, George. Sales taxes are inherently regressive since fixed and low-income families must devote a larger percentage of their sparse resources to acquiring the necessities of life: food, clothing, shelter, medicines. Rebates/prebates are merely a ruse to suck people into the grasp of the welfare state from cradle to grave.
Furthermore, the NRST is extremely heinous in its redefinition of new homes as "consumable goods or services" rather than "real property". The purchase of one's own home is probably the single most important investment most people make in their lifetimes, yet through taxation, the NRST hinders the potential for people to acquire "real property" and pull themselves up by their own bootstraps.
The NRST promotes two-tiered socio-economic stratification -- the same abhorrent condition that the corrupt, ruling-elite PRI imposed on Mexico.
"The NRST promotes two-tiered socio-economic stratification "WG, EXACTLY. The two tiers with the "top" tier's enforcers is the ONLY way that socialism can exist. MANY of the policies already made into law are DESIGNED to eliminate the middle class, and they continue with those proposals. INCLUDING the NRST, and Dick Armey's "flat" tax. Peace and love, George.
We had a misunderstanding. When you said,
"Under a consumption tax, CEO's will pay less tax and working folks will pay more tax", I thought you meant
"Under a consumption tax, CEOs will pay less tax than working folks and working folks will pay more tax than CEOs.
Now that you have posted your reasoning, I understand that you mean "Under a consumption tax, CEO's will pay less tax than they pay now and working folks will pay more tax than they pay now.
Yes, CEO's may pay less tax under a consumption tax than they pay now...but it is the case that EVERYONE - except those who currently have zero income tax burden will pay less under a consumption tax. This is possible due to the increase (nearly a doubling) in the size of the tax base. A certain amount of dollars must be raised...if we nearly double the number of individuals from whom we collect, then we don't need to collect as much from each person.
Which brings us to the poorer folks. It is true that regressive taxes are the most harmful taxes to poorer folks. Indeed, the existing payroll tax is extremely regressive...do you agree? In fact it is so regressive that even if you are homeless, you pay 15.3% of your wages in payroll tax, but if you make millions, you only pay that 15.3% on the first $80,000 you earn. THAT, sir, is regressive.
BTW did I mention that all flat tax proposals keep the payroll tax and withholding? So if you're against regressivity, it seems that you'd want to choose a tax reform option that wasn't regressive - but the flat income tax has the most regressive of all payroll tax! Did you not know that?
Anyway, to avoid regressivity (and you say you want to do this), the consumption tax eliminates tax on necessities. Tax on your necessities of life is ZERO. So if you're poor, and you spend nearly all of your money on necessities, you will pay nearly no tax. Thus the regressivity is eliminated under HR2525.
In summary, it is the case that poor people, rich people, and middle income people all will pay less under a consumtion tax than they currently pay in income related taxes. Also, the regressivity of sales taxes has been eliminated by eliminating the tax on necessities.
I understand why you, or anyone, would object to a tax plan that made one taxpayer group's tax burden increase while another taxpayer group's tax burden decreased! That's what happens with our graduated income tax on a regular basis (everytime Congress need to buy some votes.) But the nrst, because it is not regressive, does not do this.
The only group of individuals who may pay more tax under a consumption tax are those individuals who currently pay no tax. Also, imports will have the nrst imposed, making American goods more competitive at home....and American made goods will leave our shores without the cost of the income tax, making American goods more competitive abroad.
Thank you for posting "your" reasoning.
It is not true that "food is not currently taxed". It is. That fact that you don't think it's taxed shows you've been tricked. All costs, whether related to production, transportation, or taxation, affect prices and wages. More expenses means higher prices and lower wages to the extent of the expenses. Taxes and compliance costs are just another expense, so they obviously affect prices and wages. Since food producers experience tax costs and compliance costs, food prices do include an aspect of taxation. So food IS currently being taxed.
Everyone will pay less under an NRST, except those currently paying no income related taxes. the lower wage earning and "fixed income" folks WILL pay more.
Again, the prebate eliminates tax on necessities, so the tax is not regressive.
EG: An family AT the poverty level - family of four w/ income of 22,500 pays ZERO tax. If the family is AT the poverty level, by definition they spend ALL of their money on necessities. Since necessities are not taxed, they have ZERO tax burden.
An family at twice the poverty level - family of four w/ income of 45,000 pays a maximum of 11.5% of spending in taxes. I say maximum because if the family either saves any money, invests any money, or buys an already taxed item, there will be even less tax to pay. This family of four's maximum consumption tax would be $2588. Under the flat income tax, this family (exempting the first $10,000 of "income"- however you define that) would pay the income tax on $35000. Did you say you wanted 10% flat tax?...That would be MORE tax under the flat tax!
BTW the flat income tax also includes the 15.3% payroll tax, meaning this family would also have 2678 deducted from their paychecks before they even see them. Golly, that's a total of 6178!!! That doesn't even include the 2678 his employer "contributes" (which makes this family's wages that much lower.)
All people will pay less under an NRST, exept those who currently pay no income related taxes.
Supporters of flat income tax often forget about the most-regressive payroll tax. Did you?
Remember that the nrst is not regressive, and I can easily show this with an example. If you can show otherwise with an example, I'd like to see it. I haven't been able to construct a regressive example yet, and I've tried.
P, Under the provisions that any new tax system would HAVE to maintain enough to run government at its current levels {The downsizing will happen later< /sarcasm >}, That statement {where ever it came from} is pure unadulterated bullshit. Another sales pitch? This is unnecessary. I ain't buyin'. Peace and love, George.
P, This is GOOD!! That 10% rate can be lowered then! I "want" every swinging taxpaying entity to pay the SAME percentage based on "income from whatever source derived" with NO deductiona, and/or exemptions. Course, we both know which of my hands will fill first from "wants", or defecation. Peace and love, George.
I have been unable to find ANY situation in which the nrst makes anyone pay more as a percent.
Are you sure you don't want the flati ncome tax to exempt the first 10k or 17k?
P, Preferrably no. As I've written before, let government expenditures SHOW exactly WHAT social engineering godgov is pushing under the whims of man on any given day and/or year. NOT hidden in some obfuscatory tax code as they are doing today so well.
YES!! I do think{?} it best that NO deductions and/or exemptions be allowed in the tax system. History SHOWS that groups and individuals are VERY adept of argueing "MY CAUSE" since "THEY ARE GETTING THEIRS"!! How many pages is the tax code now? And, that's BESIDES the massive paperwork godgov creates by "giving" their largess out. NO deductions, and/or exemptions. For, where does it stop? Or does it never as our present code seems to indicate?. I started out with no deductions and/or exemptions, but was persuaded that, "The poor need help." I have returned to, "If they need help, and government is going to supply that help, it should NOT be done within the tax code, but by RECORDED government expenditures." Peace and love, George.
Under the provisions that any new tax system would HAVE to maintain enough to run government at its current levels
That statement {where ever it came from} is pure unadulterated bullshit. Another sales pitch? This is unnecessary. I ain't buyin'.
That is called a straw dog George, because the basic statement is untrue, and your are just saying you don't believe it. How droll. Anyone can shoot down an obvious untrue premise.
Revenue neutrality merely means one does not add to the current deficit nor decrease current surplus revenues. That does not mean, the same amount of dollars are required for there are real reductions in the expenditures that government has just by eliminating the income/payroll tax system with it's high costs imposed upon everyone to just comply with it.
They all mean a lower budget to fund thus lower taxes and tax rate.
The net effect on your personal budget will be you pay no more than you do today to buy products, with the NRST included in your payment for those products.
As importantly you receive a full paycheck with no witholding of any kind, plus receiving the monthly pre-bate that provides the same protection of the personal exemption in your income tax.
All told, the standard of living for everyone would increase by much more than 15% over what it is today.
The NRST bill clearly states what the tax rate is: 23% of spending for new goods and services.
The current income/payroll tax collects 24% of a household's gross income. The NRST collects 23% of (Gross Income less state taxes, less povertyline income, less savings and investment). That George is a clear drop in the rate of taxation.
However, because the rate of taxation falls the economy increases which provides the necessary revenue for running government at current service levels.
It is up to the appropriations process to decrease the amount the government spends George, tax bills won't do the job and can't. You have to actually repeal bills to decrease government, and that means people have to push congress to get their. That won't happen under an income/payroll tax system that hides the burdens of government in corporations and monetary inflation from the sight of the electorate.
Now Georage, and you intend to take even more persons of the tax rolls in your plan by increasing personal expemptions and hiding taxes out of sight, by collecting them via business revenues. Out of sight out of mind means:
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
With government just growing ever faster.
YES!! I do think{?} it best that NO deductions and/or exemptions be allowed in the tax system.
Bull George, for it is you who stated that there should be a $10k personal exemption to "protect the poor". You can't have it both ways George. Either you tax everyone the same or you don't.
You can't use the excuse that an NRST might tax the poor when you are now claiming it is wrong for your own version of an income tax to not tax the poor.
That leaves your arguments in the dumpster George. What you try to decry in the NRST you condone in your own tax. That is hypocricy George.
"If they need help, and government is going to supply that help, it should NOT be done within the tax code, but by RECORDED government expenditures."
Then why do you call for a $10k exemption in your "flat" income tax George and why do you demand that taxes be collected from gross business revenues instead of in plain view of the citizen.
Your statements are inconsistent and evasive.
P, Preferrably no. As I've written before, let government expenditures SHOW exactly WHAT social engineering godgov is pushing under the whims of man on any given day and/or year. NOT hidden in some obfuscatory tax code as they are doing today so well.
YEAH! We sure agree on this! The more we eliminate hidden tax, the better off we will be...do you agree?
It's refreshing to see a point of view unlike most others! Of those who prefer the flat tax over the nrst, you are the only poster I've seen say what you've said...I am in 100% agreement with you. NO HIDDEN TAXES!!! The more we see and feel the bite of taxation, the more likely we will be to refuse further increases...and the more likely it will be that government actually (gasp) decreases spending!
It seems we have the same goal in mind...reduce gov't spending and taxation. We just have different ways of trying to achieve it...
We are both in agreement that the currents system hides, "obfuscates", and otherwise misleads individuals with regard to the amount of tax the pay. We further agree that this aspect of taxation is undesirable and that to improve our tax system, hidden taxes must be eliminated/minimized. The agreement on this issue was established in the previous few posts.
So we agree that we should eliminate/minimize hidden taxes.
We also agree that any tax system should NOT be regressive. This agreement was also established on posts in this thead.
So that's TWO important aspects of a tax system that we agree on.
Now we're getting somewhere!
Let's focus on which tax reform option
a)is not regressive
b)does not hide taxes
Is there any other aspect of taxation you feel is important? If so, out with it and let's talk!
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