23% national tax

[torch]

who is for or against and why. From what I have read I am for it! Abolish the 16th amendment, do away with income tax and withholding tax.

[TODO]

Give a link or something to it. Is that the same thing as fair tax?

[MudHog]

Below isn't saying I'm for or against, but I like the idea and would like to see the numbers add up.

The 23 Percent Solution?


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By Robert S. McIntyre


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Washington
Suppose a bunch of rich people want to promote a national sales tax to replace the Federal income tax. How do they try to persuade the public to support such a plan? Simple: play with the arithmetic.

Earlier this month, the well-financed group Americans for Fair Taxation, based in Texas, kicked off a sales-tax campaign with a full-page advertisement in several large newspapers. It called for replacing all the main Federal taxes--personal and corporate income taxes, payroll taxes and the estate tax--with a 23 percent national retail sales tax.

According to the group, such a plan would raise exactly as much money as current laws do, while cutting taxes for just about everyone. The group's plan has been implicitly endorsed by Representative Bill Archer, a Republican from Texas, the chairman of the tax-writing House Ways and Means Committee and a longtime sales-tax fan and income-tax hater.

I was curious about how the group did its arithmetic, so I checked out its Web site--www.fairtax.org--and sent a note to the E-mail address to get further information about the group's calculations.

According to the group's figures, at 1995 levels a new sales tax would have to raise $1.36 trillion to replace all Federal income taxes, payroll taxes and estate and gift taxes. Under its plan, the group says, taxable spending would be $4.6 trillion (after accounting for rebates to partly protect lower-income families).So, $1.36 trillion divided by $4.6 trillion would be the required sales tax rate. Fine, except that $1.36 trillion divided by $4.6 trillion is not 23 percent. It's about 30 percent.

It turns out that the group's purported 23 percent tax rate is misleading and hypothetical. It came up with that number by dividing the sales tax by the cost of a purchase plus the tax. So if the tax on a $100 purchase is $30, the group prefers to call it a 23 percent "tax inclusive rate" ($30 divided by $130). Ever hear of computing a sales tax like that?

The fact that the group's sales tax, even by its own figures, entails a 30 percent tax rate is only the beginning of the math problems. The group's backup materials also assert that almost a third of its projected sales-tax revenue is supposed to come from taxes the Government will pay to itself. Build a road, pay yourself a tax. Buy some planes for the Air Force, pay yourself some more. And so on.

Unfortunately, that shell game won't work. Without these phantom governmental tax payments, the sales tax rate would have to jump to 42 percent to break even.

A bit more digging reveals that a quarter of the remaining sales taxes are supposed to be paid on things like church services, free care at veterans hospitals and a variety of hard-to-tax financial services like free checking accounts. If we discount the taxes on these items, the sales tax rate would have to climb to an astronomical 56 percent to break even.

Apparently, the millions of dollars that Americans for Fair Taxation says it has spent on focus groups and polling have taught it an important lesson: giving people the real facts about a national sales tax is politically disastrous for its proponents. So the group is trying the only other available route: cooking the numbers.

[torch]

You know thats why I hate politics, you have to "Paul Harvey" everything to get the rest of the story.

[cwink]

Considering my current tax bracket is already over 23%, and I have to pay it wether or not I buy anything or not. I am for it.. Anytime I can control my own taxes I like that.

[driveby]

At least it would be a way to get some tax money out of all of the illegals who aren't paying any taxes now when they make their money.

[huntersmky]

exactly. I like the idea so far but i'm sure there is some hidden language in there

At least it would be a way to get some tax money out of all of the illegals who aren't paying any taxes now when they make their money.

[MudHog]

At least it would be a way to get some tax money out of all of the illegals who aren't paying any taxes now when they make their money.

not just the illegals, anyone on any gov't welfare program too.

which is why I'm for it and would like to see the numbers mean something before actually wanting it to happen.

[TODO]

I pay over 23% as well, but i do have some ability to write chit off which i guess you would loose with the fair tax. If they could make it work as advertised i would be for it. Fluck paying 56% sales tax thou as that article posted above implies.

[torch]

you also pay a 18.4c fuel tax on every gallon

[crow]

So, I hear you guys saying you want to base the national budget (military...everything) on what someone thinks someone else might spend in a given year. Lots of ambiguity in that, guys! Think about depending on a budget that comes out of an economy like the one we are in right now. Reckon there might be some shortfalls?

Can't say I'd like to stake the country's future on that! But, the tax code does need a complete redo based on a true "fair" and balanced mix of taxes so as not to beat up the true "working poor" and allowing the truly wealthy to escape taxes almost entirely.

crow

[torch]

You know this country was founded by rich land owners from England who were sick and tired of paying taxes. Just like what is happening now. I am in the higher tax bracket and just makes me sick every year to pay when I see people who only worked 3 weeks at the cotton gin get back up to 7500.00. Our tax codes need to be overhauled, at this point I wouldn't mind a flat 50% tax that every one pays.

[cwink]

So, I hear you guys saying you want to base the national budget (military...everything) on what someone thinks someone else might spend in a given year. Lots of ambiguity in that, guys! Think about depending on a budget that comes out of an economy like the one we are in right now. Reckon there might be some shortfalls?

Can't say I'd like to stake the country's future on that! But, the tax code does need a complete redo based on a true "fair" and balanced mix of taxes so as not to beat up the true "working poor" and allowing the truly wealthy to escape taxes almost entirely.

crow

I see what your saying, but there are shortfalls now and we have a completely messed up tax structure. I would venture to say that the shortfalls would be more than made up for by the lack of having to pay all those IRS people.. In a sales tax society the rich would pay more than the working class just because they can buy more. I would be willing to do a 10% flat tax and a 23% Sales tax.. At least I would know what to expect. And for the record I don't think tax revenues are the problem, I think the problem is SPENDING, WAY TO MUCH SPENDING both by this administration and the previous.

[Lazy Drake]

who is for or against and why. From what I have read I am for it! Abolish the 16th amendment, do away with income tax and withholding tax.

Will never happen. The current tax code is a conglomerate of special interest favors put together over the last 50 years. The special interest will not give up the tax breaks they have bought without a fight. The IRS employs 115K people, if we went to a flat tax lots would lose their job. We all know politicians don't like to cut jobs and if IRS employees are unionized that makes it tougher. In other words, the flat tax ain't happening.

[jacksbuddy]

Ok, I'm from the government, so this topic directly affects me. Take my comments with a grain of salt. BUT!

I pay too. And if you've ever been overseas, you'd appreciate what we have here in the USA more and more. I look at my tax bill as "Country Club Dues". My passport is blue, has an eagle on it, and reads "The United States of America". Here, I don't have the police coming to my house simply because they want to and asking me for my papers. I don't have to report to the local police station when I travel to another town. And I have no fear of soldiers attacking me if I want to say how terrible the government is to its citizens. (All of which I have either seen or experienced while overseas.)

Now, seeing as how I AM a government worker, I think it'd be a good idea for me to get busy giving you your money's worth. Y'all have a nice day.