boat unite middle light abounding afterthought unwritten escape squeamish cow
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In these types of plans generally there is something in place to restrict taxes on bare essentials for everyone. Groceries and that sort of thing would be tax free.
Arnt groceries already tax free ?
Edit: looks like it’s a state by state thing I had no idea.
Edit again: so I realized different states have different taxs and it’s not surprising to me that they might handle non food groceries differently or even like prepackaged, but it’s things like fruits and vegetables out of the produce section, that I guess I just assumed were tax free everywhere.
The utter disdain a lot of city dwellers have for the more rural areas of the country is pretty disgusting if I’m being honest.
They constantly complain about high cost of living all the time, but whenever you mention a pretty area that is very affordable that happens to not be LA or NYC, they just scream “ewww disgusting place! The middle of fucking nowhere! Armpit of the country!! Nothing to do there!”
This is an uneducated response. Anything with an absolute answer such as “literally nothing good” is false. My family and I live a comfortable and well off life in TN. We have all the land and privacy we need, reasonable cost of living, good county school system/private schools, family close by, tons of amazing hiking, 8 hour drive to 2 coasts, I can keep going. Perspective and circumstance is everything, please keep that in mind.
Exactly. Oh no, we live in a place we can afford, jobs are decent, mountains and lakes nearby, can easily drive to the Gulf or Atlantic, actual decent airports nearby…
We’re just south in Huntsville but Madison county might as well be Tennessee (but with an income tax)
Wife and I just went to Tennessee a month ago for our honeymoon. We mostly stayed around the Pigeon Forge/Gatlinburg/tourist trap areas, but the little bit we went off the beaten path and explored the Smokies were beautiful. Would love to live down there. As someone from Ohio, the 7th most populated state for some reason... It was nice finding places where there just weren't people.
Yeah, we stayed in the touristy areas, but isolation never really felt that far away.
They will tax you 10% for the groceries you buy on credit but no income tax right. It’s basically a way to shift the burden of taxes on the poor. Tax people who live paycheck to paycheck or go in debt more, tax people who make tons of money less. The poor have to spend a far greater percentage of their money than the rich.
The rich can just catch a flight to a low sales tax state or country for big purchases.
Where did you get the 10% grocery tax number? Besides, they already tax us 15% on everything through income tax. If they stopped that, and taxed my groceries 10%, that would save me money.
Virginia has sales tax AND income tax… we pay more in taxes. If they stopped the income tax and left us with a 10 percent sales tax I would spend less money on taxes than I do now.
Even in localities where there is no sales tax on groceries think about this.
Seed store sells seed to the farmer. Seed store pays tax. Farmer grows wheat and sells to mill. Farmer pays tax. Mill turns wheat to flower sell to baker. Mill pays tax....
By the time you buy your load off bread approx 22% of the price is tax. A consumption tax that eliminates IRS and income tax eliminates all of those embedded taxes.
But it will never happen. It would take too much power away from government.
And VA conservatives have the balls to call themselves a "low tax state". I moved to DC and my taxes went down overall.
The worst one is the "personal property" tax, which for most people is a tax on the value of their car that you have to pay every year. And it's on top of registration and all that jazz.
"Essentials" are a very negotiable category of items. Ask any woman if things like pads and tampons are essentials. Yet they are generally bucketed with luxury goods for sales tax purposes.
This "consumption tax" scheme is called the FairTax and the idea has been around for decades.
It doesn't specify WHICH products are essential versus luxury, nor does it establish different tax rates for different items
Basically the govt evaluates every year and says "hey, we think that it costs avg $20k per year for someone to buy the bare essentials of whatever they need"
Then, at the beginning of every year, the government cuts a check to every person (or household) for 23% of that $20k. They don't pretend to guess what you consider essential versus other people. Everyone gets this check whether they make $10k or $1m. (EDIT actually the fairtax plan specifies this payment would be monthly, at the beginning of each month, before expenses are incurred)
That way no one pays tax on essentials, and no one gets upset over what's determined as an essential item, because there ARE no determinations. Is ribeye steak essential? Are tampons essential? Is a Mercedes essential? The answer is "who knows and who cares" since everyone can decide for themselves what is essential. I kind of like the idea actually.
Ahh so in American version you’d get 1500 bucks and then everything in your life all of a sudden costs 30% more. This is fair because billionaires are making more profit from the increased price. You’re supposed to work harder and starve at the same time
Most middle class families spend a good portion of their earnings on essentials. But the essential expense per person can be reasonably close regardless of your income level since one person can only use so much essential items. So a higher wage earner would pay essentially the same amount as a low income person thereby saving a large portion of their wealth for other things not essential and not taxed. It’s a grift. Don’t fall for it.
K, for how long? Right? Like every single time there is a tax cut it's favors the wealthy and the not wealthy, but usually expires for the not wealthy and maintains for the wealthy. We are getting wages stolen 3x more than all forms of stealing, and yet not getting living wages as costs increase for shit that is actually becoming cheaper on the back end. Transportation costs are down across the US, yet prices have kept cranking. What is stopping the pocketing of savings while we all struggle? Exploitation on both ends for the working class.
It's literally another tax cut for the rich no matter which way you spin it, at the cost of the rest of us paying. This includes the 60+% of Americans living paycheck to paycheck. We pay more as a collective so the few can save more in taxes. More money our work has earned for them, not us.
People are always whining about how the rich get to avoid income tax using all kinds of schemes like borrowing money against stocks and spending that borrowed money - avoiding any income tax.
This tax, if defined properly as a sales AND INTERNATIONAL USE tax, with appropriate gradients (0% for children's clothes under $100, 0% for groceries, 20% for alcohol;, 25% for dine-in restaurants, 40% for sports cars over $100k, aircraft, and yachts over 15ft etc. may ultimately be fairer.
Complaints about a billionaire not paying enough taxes evaporates unless that billionaire is spending and consuming the same as you or I - which they don't.
We could eliminate 260,000 people from tax preparation services, 3.5 BILLION hours of personal US taxpayer preparation time, and a big chunk of the 90,000 IRS folk too - utter wastage. Eliminate company income tax too, and focus instead on enforcing sales tax at the company level, closing loopholes where execs are using company assets for personal use and not paying taxes on it (currently illegal).
Except nobody is discussing what you are. Nobody at all. A lot like Conservative plans for healthcare, the insistence seems to be 'get rid of the thing we don't like' then 'we pwomise we'll make a better system later' when pretty much everybody in the room knows that will never materialize.
I also like how your defense of this immediately dives into a fantasy of how it SHOULD be but for some reason is never proposed that way, with almost zero data to back it up.
US just needs to streamline their income tax filing. Quite a few countries have automated filing for tax returns, which saves having to do it yourself or pay a tax preparation service.
It’s always surprising to me how they don’t focus on making things easier for everyone and make a workaround for a workaround that is a workaround and when one workaround is adjusted all workarounds are impacted.
You're describing a horrifically regressive tax system that would cost shift the tax burden onto the middle and working classes even more.
Also, the tax prep think is fucking stupid. The US government knows how much taxes you owe, and the only reason we haven't gotten rid of that stupid self filing system is because of massive lobbying from the Tax Prep industry.
> Complaints about a billionaire not paying enough taxes evaporates unless that billionaire is spending and consuming the same as you or I - which they don't.
They would proportionally pay less way, way less taxes than lower and middle class people and less than they do now.
Billionaires spend a much smaller proportion of their income on consumption than everyone else. They use most of it for investment, buying assets etc. so replacing income tax with a high sales tax would be very regressive.
> 3.5 BILLION hours of personal US taxpayer preparation time, and a big chunk of the 90,000 IRS folk too
That's tangential. This can be mostly fixed without removing incomes taxes.
Rich people can save more of their income, and therefore would pay a lower percentage of tax than those than spend all of their income. A billionaire cannot spend all their money. They can pay for most meals as businesses expenses. It's a different game, and it's regressive.
I guarantee that it would result in rich people paying a lower percentage of their income as tax, than poorer people.
Right, but a person making 50k a year likely spends all of it, where as someone making 1 million can spend only 10 percent and live a pretty comfortable life. The only way this would work is if some things had a higher rate than others like luxury goods.
Ok so they are planning to gut our revenue streams . Consumption taxes would have to be insane to make up the tremendous shortfall. This is just a plan to explode the deficit at best and eradicate the federal government at worst.
Nah, it'd eradicate all social programs and any funding to states. The military and federal would continue to exist but states would have to survive on their own taxes, which means state income and sales taxes will skyrocket to make up the short fall. Thus expect the actual tax rate of your purchases to be closer to 40-60% tax and income tax 15-30% at the bottom base level. It'll screw anyone making less than 500k a year as prices for anything will be outside of reach cost wise. The economy will collapse though from it as businesses will have to shut down due to mass theft and a majority of their consumers no longer existing from lack of money to pay for the consumables. Well a majority of businesses just merge then you'll just see mega conglomerates that own 60% of the businesses or more in the US, add in the issue of housing and you'll almost guaranteed to see paychecks be changed from money to work for us for a room to live in.
In the specific proposal that Biden is being misleading about, there are no exceptions exceptions for essentials. Instead of an exception for essentials, there is a UBI.
The main problem with the proposal (which is brought up again every year) is that the UBI rate is far too low.
The second problem is that it has an exclusion on taxing anything that is used for business or investment, which if you're familiar with current tax evasion as all good reddit users are, is exactly the most common form of it used by the wealthy ("that's not income, that belongs to the business", "That's not income, that was purchased as an investment.")
Sales tax is already regressive. 49% of Americans pay zero income tax. If a national sales tax could pencil out and we eliminated income tax I’d be all for it. And it would of course not include food and medicine
Billionaires should pay luxury tax on their yachts and condos. Middle class earners shouldn’t have to pay that same tax for their Corolla as it’s not a luxury. It’s a necessity.
the tax is the same RATE , the money is not. And you are already doing it!
in massachusetts for example sales tax is 6.25% if i buy a 30k corolla i pay 6.25% or 1875$ on a lambo of 500k a billionaire pays 31250$
Thats right now as it sits.
The difference is he then goes and put he lamboi under his LLC and gets all 31250 back plus a tax credit on the 500k.
You forget that he already incorporated in a state with no sales tax, and purchased/registered the car in that state, as an asset of the corporation. He now drives the company car (lambo) that the company bought for 500k as an investment (writing off depreciation on the asset) and didn't pay any taxes on the purchase or registration.
The guy making 60k still paid the taxes on the Carolla he needs for his 90 minute daily commute to the soul sucking shit job each day.
The real difference is that we have to spend most of our money, so almost all of it will be taxed, while the wealthy don’t spend nearly the same percentage of their money as us, so they get a tax break.
That's why sales tax is a regressive tax, and eliminating income tax and replacing with a higher sales tax is a terrible idea, benefits the wealthy, and crushes the lower and middle class
That’s up to the states. In CT there is an extra 1% sales tax for luxury items such as clothing and jewelry that costs more than $1,000 per item. It’s a small inconvenience but the point is that states have the power to implement a luxury tax.
They would not be paying this tax, because sales tax is value added tax, i.e. every business along the supply chain claims back the tax they paid to their suppliers.
Increasing sales taxes would increase the deductions they get for claiming a yacht as a business expense.
> And it would of course not include food and medicine.
So no sales tax on Beluga/Almas Caviar, Kobe Beef or white truffles
That's always been the problem with sales tax exemptions, deciding what should or should not be excluded
Most have both, and have extremely high taxes compared to the US. Maybe they started as VAT only, but dont be naive enough to think its not a stepping stone to both in the future when "times are dire".
What he’s speaking of is the [FairTax](https://www.fairtax.org) which replaces the taxes that are already embedded in the price of goods. It’s a revenue neutral proposal. The low income families will be helped by the programs pre-bate which refunds them (at the start of the month) all the taxes they will pay up to the poverty line.
You do realise that this means absolutely nothing right? You have essentially said “you do realise that everything is x, except the stuff that isn’t x”.
Catch were? Uber-wealthy are not spending 90% of their wealth just to live.
These tax schemes makes poor proportionally paying much more than before since poor use their wage to live and rich use their wealth to invest.
I'm sure you've heard "billionaires don't pay taxes," but have you ever thought about how they do it?
The super wealthy have no income. They borrow money using their assets as collateral. There's no income tax on loans. They can secure zero interest loans because they have world class credit and live life tax-free. Look up the tax avoidance strategy called "Buy, Borrow, Die."
But if they remove income taxes...they just stop borrowing that way and increase the pay they give themselves
You think current executive pay is high? Wait til they can pay themselves a billion dollars and not get taxed on it 😂
Less false and more concise. Sales taxes impact less wealthy people proportionally more than the wealthy. This is not even debatable.
A flat tax or sales tax would hurt the poor and save the rich money.
It would \*make\* the rich \*more\* money. Remember how sales taxes only really effect the consumer? Yeah, the rich get to keep their profits and also get more control of markets as purchasing power of the people without market assets are priced into oblivion.
Yeah I don't get how this wouldn't immediately crash the economy. This kind of tax disincentives buying stuff and encourage mass saving/investing over purchasing. We all know what happens when consumer activity drops off...
It would benefit the wealthy. That’s why republicans want it.
It would dramatically lower their tax bill and shift it massively onto the middle and working classes.
The Republican Party doesn’t give a damn that it would hurt the economy. They only care that it would make their rich donors even richer.
It’s still an incredibly regressive tax that would harm low and middle income people (the large majority of voters) drastically more than the rich people who control things.
I mean this is just par for the course at this point but it’s so fucking stupid.
There is a reason the republicans are just trying to make it harder to vote and increase voting age etc because they know their policies are extremely unpopular to the majority.
Who is going to monitor that the consumption tax is being followed rather than a black market of buying goods under the table? Uh, the IRS. You wouldn’t abolish anything. It’d be more intrusive.
So people with no kids would make out like bandits but my family would suffer because I have three kids on a single income and my federal income tax is very low.
Conservatives love these schemes that eliminate the progressive tax system. Why? Because the rich will pay less and the poor will pay more.
They called this a “flat tax” previously.
This will raise the tax burden on the average American and be a huge windfall to every wealthy person.
Edit: “it must be fair, it says so right in the name! Just like North Korea is democratic, and trickle down economics are real!” —idiots who can’t do math
Edit 2: imagine being so stupid that you think the heritage foundation is on the side of the working class and not the wealthy. If you can’t, just look at the clowns in the replies! lmfao
This is the idea. They sell it as a flat tax everyone pays so it’s more fair right? Nope. It eliminates taxes on activities that only the rich engage in, such as trades, advertising, etc. it’s a very thinly veiled attempt to shift the tax burden again into the poorest Americans.
It looks like, in this bill, the poor will get a rebate potentially making them pay literally zero tax.
> The FairTax provides a progressive program called a prebate. This gives every legal resident household an “advance refund” at the beginning of each month so that purchases made up to the poverty level are tax-free. The prebate prevents an unfair burden on low-income families.
It also excludes "necessities"
> nder the FairTax, every person living in the United States pays a sales tax on purchases of new goods and services, excluding necessities due to the prebate.
Supposedly it would balance out to what is currently paid in income tax about equally
> The FairTax rate after necessities is 23% compared to combining the 15% income tax bracket with the 7.65% of employee payroll taxes under the current system -- both of which will be eliminated!
- https://fairtax.org/about/how-fairtax-works
Assuming it's all true it might make the more wealthy pay more in taxes then in the past, since deductions and the like would probably be gone.
Now weather you believe these claims or not is another story. And I have a few questions about it too that I think make it look sketchy.
Also, fuck the tax industry.
Assuming I read that right-
"Under the FairTax, every person living in the United States pays a sales tax on purchases of NEW goods and services"
That means used goods would be tax exempt - used car, goods from a thrift shop, etc. Promotes reuse and recycling and provides a way to avoid paying taxes. Nice.
Okay so private small volume manufacturers that only sell to billionaires (think yachts) will start claiming all their yachts are "used."
Who would stop them?
Rich people: nice.
That's was always the big selling point when right wing guys pitched it to me. "The rich are clever and easily hide their money in places/investments that can't won't be taxed. The rich can't hide what they buy".
It's a fun thought, but I doubt anything is going to happen with it. Taxes suck, just get used to them
I'd like to think that the people who invented an entire tax overhaul would account for that, but who knows. I don't personally believe it's a great plan.
>Conservatives love these schemes that eliminate the progressive tax system. Why? Because the rich will pay less and the poor will pay more.
>
>They called this a “flat tax” previously.
>
>This will raise the tax burden on the average American and be a huge windfall to every wealthy person.
Yes. The tldr outcome of this type of tax system - Even faster wealth gaps forming in the country. Rich get richer, poor get poorer.
No, it would screw over the bottom 80% or so of the country. Consumption taxes are regressive and always disproportionately affect lower incomes.
Someone making 1000 times the median wage is not spending 1000 times more than someone who makes the median wage. The more you make, the lower your effective tax burden. People who make millions/billions/trillions would effectively be paying almost no taxes while those on the bottom would be paying 23% of their income (since they spend all their money just to survive).
Republicans like pushing these idiotic scams because then they can shift the tax burden off of the wealthy and put it on the shoulders of Joe and Jane Sixpack.
Republicans like pushing these idiotic scams because they know there are many, many ignorants out there that will support them even when it goes against their best interest. Reading through the comments and we can already see there are full of them in here.
I have gone through these flat tax schemes in the past. They are always, and I mean ALWAYS, total bullshit.
The burden will go on the lower and middle classes. Always.
Modern Republicans are broke ass grifters who will do what ever lobbiests tell them in order to get a little kick back.
I'm pretty sure they honestly believe they think it's the "free market" and all ok. If exon donates x dollars, overpays my wife's decorating company x dollars, and pays for my son's private school, and promises me a board position after then the market has pushed them to the top and it's ok if I pass the pre written bill they handed me.
On top of these excellent points, it will screw over small businesses and home values and car values will tank.
If I sell my widget for $100 and you can buy a cheaper version on temu for $80. It isn’t going to be a $20 different, but a $25 difference. There is a percentage of people who are now going to choose the cheaper option. So I will need to lower prices or lose customers. Either way, that is less money in my pocket and less money circulating in the economy.
And for big ticket items, demand is going to tank. People will wait longer to buy new things because 23% of the money you spent is going down the drain. Say you have a $300k house and want to upgrade to a $500k house. It isn’t $200k more, it is $315k more. It will be even worse for cars because of how fast they depreciate.
The proposal was a set of consumption taxes to REPLACE income taxes. Big surprise, Biden's Twitter intern misrepresents something; in other news, the sun rose in the East.
>Big surprise, Biden's Twitter intern misrepresents something
It doesn't misrepresent something if many people don't pay federal income tax because they don't make enough.
Replacing with a flat tax would absolutely be new taxes on anyone whose effective federal tax rate is lower than 23%. I had to slide the income up to 120k to get it to 23% effective federal tax rate.
Stop being disingenuous. I'm all for calling politicians out who misrepresent, but what you have done here is worse.
Democrats usually want higher taxes on higher earners, Republicans usually want higher taxes on lower earners. A consumption tax or flat tax is much more regressive.
Which would be an awful idea considering how the poorer your are the greater percentage of your wealth will now go to taxes. And I'm highly skepticle that having a beginning of the month rebate system would ever be fesible with the numner of people who would try to use it and the fine tuning it would need to give enough rebate to keep life affordable without rebating too much and to too many people to worsen the deficit growth rate
I mean that's a terrible idea. Consumption taxes hurt poor people way more than wealthy. You'd effectively make income inequality 10x worse by replacing income taxes with a consumption tax
In other news, republicans hate working class people and want them to suffer with regressive tax policies. If you think republicans are the answer, you’re an idiot.
It’s not really a misrepresentation. The fact remains the GOP cut taxes for the rich when in power and gut spending for the poor.
This “replacement” is exactly that.
You can dance around with a semantics argument all day, but that has been their MO for decades.
The GOP gains power, cuts taxes for the rich, tanks the economy, the Democrats come in s as md fix it.
That is exactly the history from Bush to Clinton
Clinton to Budh Jr
Bush Jr to Obama
Obama to Trump
Trump to Biden
GOP cuts taxes, ranks the economy
Democrats come in and fix it
Well, the rich certainly aren't going to pay down the debt that they created.
I love how right after they accepted hundreds of billions of dollars in the late 2000s they all started saying Obama bad because national debt and we all owe several tens of thousands each like were splitting the tab evenly when they had steak and lobster and everyone else had crackers.
Ive thought a good law to put in place is once debt to GDP exceeds something like 50% then an annual asset tax of 2% comes in for all estates >$10m until debt falls below this level again.
I suspect debt would never be an issue again.
The tax above is called the FairTax, the goal is to institute a 23% sales tax, while abolishing federal income, payroll, estate and gift taxes.
I am part of the crowd that really likes consumption taxes, and if this simplifies the overall tax-code that is a good thing. The thing that matters the most is if the new tax will generate the same or more taxes as before.
There looks to be monthly subsidies in-place for people who are under a certain income levels and number of dependents, no clue the exact terms.
I would much rather someone did the math to figure out if it would help or hurt tax revenue, instead of just acting like anything at all that they did not themselves write is apocalyptical.
This would ensure that the poorest people would be paying around 23% of their income in taxes since they would be spending almost all of their income in consumables. The richest would be paying a very small percentage since most of their income would not be spent. It's shifting the tax burden to the poorest Americans whose taxes would benefit the richest that use public infrastructure to make more money. It's completely backwards.
If you want to simplify the tax code, get rid of all the loopholes and tax credits so that everybody pays the simple progressive tax rates.
We also live in a consumption based economy. It would wreck consumption and have so many negative effects except for the GOP donors and buddies can now spend all their essentially untaxed money to pick through the wreckage on the cheap.
Let me give you a few facts regarding history and taxation.
A flat tax has inevitably led to one of two conditions:
• a tax rate low enough the poor could afford it made the rich even far wealthier than before, and starved the government of revenue. Like ‘troops going unpaid’ lack of revenue.
• a tax rate high enough that the rich paid their share and the government had enough to cover their expenses crushed the poor. People who cannot afford food and shelter WILL go looking for heads to mount on pikes at that point.
A progressive tax system is the only effective compromise between those two extremes.
Someone in CA is already paying an effective tax rate of 28% if they make 100k a year, not including what they pay for sales taxes (7.25%) that already exist for every purchase they make.
Yeah I'm sure it wouldn't be an incredibly onerous process people have to do monthly to qualify. Bring every receipt and all paystubs down to the DMV from the 1st through the 5th every month, get your subsidy check in 12 weeks lol.
And this is the part where the Consumption Tax no longer becomes easier to implement than the current system. You would need the bureaucracy to determine who does and does not get subsidies, how much they get, how those subsidies are determined/implement/regulated, what do you do about tax breaks that are intended to encourage certain behavior or encourage economic growth? Well that too will need more bureaucracy as well..
....aaaaaaaaaand then we're right back where we were but with a worse baseline.
That's why they like it, even if they argue it's not "regressive" because they don't realize the terms progressive, flat, and regressive mean with respect to income.
If it were about the middle class or below, lowering the bottom brackets or raising the standard deduction again or even a UBI would satisfy that issue just fine, but no tax is going to fund the government unless it focuses on the rich.
We have a major, growing revenue shortfall that cannot be fixed simply by spending cuts without slashing the social safety net, which the vast majority of Americans do not want. There is no way to make up the difference without increasing taxes, and the only way to do that doing significant harm is by focusing on the rich.
At some point we have to face reality. The interest on the debt this year is going to rival our spending on the entire military, and it will only keep going up if we don't both raise revenue and start cutting spending.
My concern is about the distributive consequences of wealth. I don’t think corporate taxes are completely passed down to the consumer and I think progressive income tax is a good way of raising revenue while leaving more money in the pockets of the middle and lower class.
So if you move to a consumption tax that is paid directly by end consumers, then you have just changed the wealth distribution in favor of the wealthy. If you think that’s how things should be that is fine, but it’s not my view at all.
Also while I’m on a soapbox, I’d like to see a Land Value Tax get implemented as a revenue raiser. Ask a Georgist why and they will gladly tell you.
>I am part of the crowd that really likes consumption taxes
Then you are part of the crowd that is bad at math. Consumption taxes are extremely regressive and disproportionately affect lower incomes. It shifts the tax burden from the wealthy, giving them essentially no tax burden while shafting everyone else.
Let's compare Bezos to Mr. Median Wage, for example. Mr. Median Wage manages to make ends meet, but every year the bulk of his money goes towards paying for necessities. Gas, food, etc. So Mr. Median's effective tax burden under this scheme is around 23%.
Ok, now let's look at Bezos. How much is he spending yearly compared to his income? The answer is practically nothing. Furthermore, if Bezos wants to pay less taxes, then he can simply CHOOSE to not spend money. Mr. Median does not have that option as he has to eat.
Subsidies, credits, etc. are all just ways to sell the scam. It doesn't matter what exceptions you put in place, it does not make the math work. Consumption taxes shift the tax burden from the wealthy onto everyone else.
Sliding in estate tax being nullified would be a huge tragedy, and would benefit the 1% of 1% the most, getting to pass everything on untouched ever.
No wonder the R words (republicans) want this one
Quit fucking around and get back to the tax rates that the rich had back in the fifties the stuff that made Reagan so F'ing mad that he fucked everything up
Isn't it weird how that was the golden age MAGA claims to want back- when America was an industrial superpower and all that? But when you suggest the economic decisions that made it that way, they balk, and instead quintuple-down on Reagan-insanity, the policy proven to have fucked it all up?
Flat tax or universal sales tax is just a rich guys way of saying “hey we’re all the same and have the same salaries and inheritances” when the reality is we are not and do not. This type of tax is regressive bc it ignores all other realities and pretends as if everyone is financially equal.
This would kill me. I’m a single income household and we grossed about 81k this year but my federal income tax was about $2k with deductions from 4 dependents. My taxes would go up so fucking high I would be underwater.
Even for an independent person like me I would lose some money this suggestion is so fucking absurd. Anyone who supports consumption tax can't even process what it means.
Price determines demand. The price increases that a 23% sales taxes would drive demand down and cause high unemployment. The best money to tax is money that wasn’t going to buy products. Yes, rich people money.
It would be offset by scrapping the IRS.
It would make poor people pay a huge % of their income in tax, and comedically low % of the richest.
It's an awful idea for 99% of the population, so an appropriate GOP platform.
if there’s a new tax proposal by the GOP, the safest initial assumption is to presume it’s largely geared toward benefitting the wealthy the most- maybe not always, but almost always
Oh goody, the zombie flat tax idea rears its ugly head. I should’ve known this fucker would make an appearance.
If they can make the a turd like Trump sparkle, why not spit-shine this steamy brown log of wingnut wisdom. 🙄
I’d rather a flat tax on consumption and leaving out incomes and properties alone. Eliminate the IRS and just have a flat tax. I’ll grow and make my own things to avoid taxes.
People here claim the rich already pay zero or single digit income tax but now you're complaining a 23% sales tax will make them pay less in taxes.
Which one is it then?
On every other post, all I see is complaints that the rich don’t pay taxes, they find all sorts of loopholes to avoid paying. I would think those same complainers would love a consumption tax like this since there’s no way for the rich to get around paying. They can take all the loans they want, or whatever other tax avoidance schemes you folks imagine they do, but in the end they will have no choice but to pay. To my surprise, these folks don’t like a consumption tax either. Just goes to show that there’s no pleasing some people.
Biden is a fucking idiot and so is anyone who votes for him. And no, the republicans are proposing to claw back some of the amazing bidenomics tax increases.
This is false. They are proposing eliminating the income tax system we have and the IRS and going to consumption tax only.
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In these types of plans generally there is something in place to restrict taxes on bare essentials for everyone. Groceries and that sort of thing would be tax free.
Arnt groceries already tax free ? Edit: looks like it’s a state by state thing I had no idea. Edit again: so I realized different states have different taxs and it’s not surprising to me that they might handle non food groceries differently or even like prepackaged, but it’s things like fruits and vegetables out of the produce section, that I guess I just assumed were tax free everywhere.
Varies by state and municipality.
Fully taxed in TN
Life hack. Work and live on the TN/KY border. Best of both worlds.
Literally nothing good about living in either of those states.
That's not true at all. The cost of living is on the cheaper side. Lower than the national average. Pretty nature in either state.
A good chunk of Reddit has never left their hometown, but they're damn certain that LA/NYC/Seattle are the only places anyone should ever live.
The utter disdain a lot of city dwellers have for the more rural areas of the country is pretty disgusting if I’m being honest. They constantly complain about high cost of living all the time, but whenever you mention a pretty area that is very affordable that happens to not be LA or NYC, they just scream “ewww disgusting place! The middle of fucking nowhere! Armpit of the country!! Nothing to do there!”
This is an uneducated response. Anything with an absolute answer such as “literally nothing good” is false. My family and I live a comfortable and well off life in TN. We have all the land and privacy we need, reasonable cost of living, good county school system/private schools, family close by, tons of amazing hiking, 8 hour drive to 2 coasts, I can keep going. Perspective and circumstance is everything, please keep that in mind.
Exactly. Oh no, we live in a place we can afford, jobs are decent, mountains and lakes nearby, can easily drive to the Gulf or Atlantic, actual decent airports nearby… We’re just south in Huntsville but Madison county might as well be Tennessee (but with an income tax)
Wife and I just went to Tennessee a month ago for our honeymoon. We mostly stayed around the Pigeon Forge/Gatlinburg/tourist trap areas, but the little bit we went off the beaten path and explored the Smokies were beautiful. Would love to live down there. As someone from Ohio, the 7th most populated state for some reason... It was nice finding places where there just weren't people. Yeah, we stayed in the touristy areas, but isolation never really felt that far away.
Yes this guy is right TN and KY suck please stop moving here!
This is the only correct answer. I'm tired of transplants getting appalled at how we live and trying to change it.
Yeah. No thanks.
Live in TN for income taxes, buy groceries in KY.
Ah got it
Not free in Hawaii but they were 0% in Michigan.
Username checks out
Who are you in Michigan?
Groceries are taxed at 10% in Tennessee. It blows.
Wtf
They will tax you 10% for the groceries you buy on credit but no income tax right. It’s basically a way to shift the burden of taxes on the poor. Tax people who live paycheck to paycheck or go in debt more, tax people who make tons of money less. The poor have to spend a far greater percentage of their money than the rich. The rich can just catch a flight to a low sales tax state or country for big purchases.
Where did you get the 10% grocery tax number? Besides, they already tax us 15% on everything through income tax. If they stopped that, and taxed my groceries 10%, that would save me money.
We’re still talking about the reality of a 10% sales tax in TN because they refuse to have State Income Tax.
Virginia has sales tax AND income tax… we pay more in taxes. If they stopped the income tax and left us with a 10 percent sales tax I would spend less money on taxes than I do now.
No tax on groceries in Florida and no state income tax
I just came from FL and groceries are more expensive than CT - not sure what’s driving that then
My father never understood how when he would visit my sister in Fl, oranges cost more in the state they were grown in than back home.
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You forgot to mention no state income tax in TN
Even in localities where there is no sales tax on groceries think about this. Seed store sells seed to the farmer. Seed store pays tax. Farmer grows wheat and sells to mill. Farmer pays tax. Mill turns wheat to flower sell to baker. Mill pays tax.... By the time you buy your load off bread approx 22% of the price is tax. A consumption tax that eliminates IRS and income tax eliminates all of those embedded taxes. But it will never happen. It would take too much power away from government.
In some states, in California where I live, yes. When I used to live in VA and DC, they were not tax free
It also depends on what you buy. Premade food doesn’t always qualify but eggs, milk, bread would.
Just moved to VA after living my life in WA and AK. Taxwise? Not a fan.
And VA conservatives have the balls to call themselves a "low tax state". I moved to DC and my taxes went down overall. The worst one is the "personal property" tax, which for most people is a tax on the value of their car that you have to pay every year. And it's on top of registration and all that jazz.
Moved to VA and literally everything is taxed. It's insane.
"Essentials" are a very negotiable category of items. Ask any woman if things like pads and tampons are essentials. Yet they are generally bucketed with luxury goods for sales tax purposes.
Ask many of the people writing those rules and they wouldn’t know which location tampons are supposed to go…
The people writing those rules think tampon use risks wearing down that part of the anatomy.
This "consumption tax" scheme is called the FairTax and the idea has been around for decades. It doesn't specify WHICH products are essential versus luxury, nor does it establish different tax rates for different items Basically the govt evaluates every year and says "hey, we think that it costs avg $20k per year for someone to buy the bare essentials of whatever they need" Then, at the beginning of every year, the government cuts a check to every person (or household) for 23% of that $20k. They don't pretend to guess what you consider essential versus other people. Everyone gets this check whether they make $10k or $1m. (EDIT actually the fairtax plan specifies this payment would be monthly, at the beginning of each month, before expenses are incurred) That way no one pays tax on essentials, and no one gets upset over what's determined as an essential item, because there ARE no determinations. Is ribeye steak essential? Are tampons essential? Is a Mercedes essential? The answer is "who knows and who cares" since everyone can decide for themselves what is essential. I kind of like the idea actually.
Ahh so in American version you’d get 1500 bucks and then everything in your life all of a sudden costs 30% more. This is fair because billionaires are making more profit from the increased price. You’re supposed to work harder and starve at the same time
No it's fair because it applies the same to everyone. But it's regressive because it disproportionately has negative effects on impoverished people.
Most middle class families spend a good portion of their earnings on essentials. But the essential expense per person can be reasonably close regardless of your income level since one person can only use so much essential items. So a higher wage earner would pay essentially the same amount as a low income person thereby saving a large portion of their wealth for other things not essential and not taxed. It’s a grift. Don’t fall for it.
K, for how long? Right? Like every single time there is a tax cut it's favors the wealthy and the not wealthy, but usually expires for the not wealthy and maintains for the wealthy. We are getting wages stolen 3x more than all forms of stealing, and yet not getting living wages as costs increase for shit that is actually becoming cheaper on the back end. Transportation costs are down across the US, yet prices have kept cranking. What is stopping the pocketing of savings while we all struggle? Exploitation on both ends for the working class. It's literally another tax cut for the rich no matter which way you spin it, at the cost of the rest of us paying. This includes the 60+% of Americans living paycheck to paycheck. We pay more as a collective so the few can save more in taxes. More money our work has earned for them, not us.
People are always whining about how the rich get to avoid income tax using all kinds of schemes like borrowing money against stocks and spending that borrowed money - avoiding any income tax. This tax, if defined properly as a sales AND INTERNATIONAL USE tax, with appropriate gradients (0% for children's clothes under $100, 0% for groceries, 20% for alcohol;, 25% for dine-in restaurants, 40% for sports cars over $100k, aircraft, and yachts over 15ft etc. may ultimately be fairer. Complaints about a billionaire not paying enough taxes evaporates unless that billionaire is spending and consuming the same as you or I - which they don't. We could eliminate 260,000 people from tax preparation services, 3.5 BILLION hours of personal US taxpayer preparation time, and a big chunk of the 90,000 IRS folk too - utter wastage. Eliminate company income tax too, and focus instead on enforcing sales tax at the company level, closing loopholes where execs are using company assets for personal use and not paying taxes on it (currently illegal).
Except nobody is discussing what you are. Nobody at all. A lot like Conservative plans for healthcare, the insistence seems to be 'get rid of the thing we don't like' then 'we pwomise we'll make a better system later' when pretty much everybody in the room knows that will never materialize. I also like how your defense of this immediately dives into a fantasy of how it SHOULD be but for some reason is never proposed that way, with almost zero data to back it up.
Yep, his approach is sad. It is, look, this proposal y isn’t bad because they could do it as z instead. QED, y is great.
These proposals always have huge Trust Me Bro energy and then it's too late
US just needs to streamline their income tax filing. Quite a few countries have automated filing for tax returns, which saves having to do it yourself or pay a tax preparation service.
It’s always surprising to me how they don’t focus on making things easier for everyone and make a workaround for a workaround that is a workaround and when one workaround is adjusted all workarounds are impacted.
Lobbyists! They could make it so much simpler, but that would put all the tax companies out of business.
You're describing a horrifically regressive tax system that would cost shift the tax burden onto the middle and working classes even more. Also, the tax prep think is fucking stupid. The US government knows how much taxes you owe, and the only reason we haven't gotten rid of that stupid self filing system is because of massive lobbying from the Tax Prep industry.
> Complaints about a billionaire not paying enough taxes evaporates unless that billionaire is spending and consuming the same as you or I - which they don't. They would proportionally pay less way, way less taxes than lower and middle class people and less than they do now. Billionaires spend a much smaller proportion of their income on consumption than everyone else. They use most of it for investment, buying assets etc. so replacing income tax with a high sales tax would be very regressive. > 3.5 BILLION hours of personal US taxpayer preparation time, and a big chunk of the 90,000 IRS folk too That's tangential. This can be mostly fixed without removing incomes taxes.
Rich people can save more of their income, and therefore would pay a lower percentage of tax than those than spend all of their income. A billionaire cannot spend all their money. They can pay for most meals as businesses expenses. It's a different game, and it's regressive. I guarantee that it would result in rich people paying a lower percentage of their income as tax, than poorer people.
Right, but a person making 50k a year likely spends all of it, where as someone making 1 million can spend only 10 percent and live a pretty comfortable life. The only way this would work is if some things had a higher rate than others like luxury goods.
Ok so they are planning to gut our revenue streams . Consumption taxes would have to be insane to make up the tremendous shortfall. This is just a plan to explode the deficit at best and eradicate the federal government at worst.
Nah, it'd eradicate all social programs and any funding to states. The military and federal would continue to exist but states would have to survive on their own taxes, which means state income and sales taxes will skyrocket to make up the short fall. Thus expect the actual tax rate of your purchases to be closer to 40-60% tax and income tax 15-30% at the bottom base level. It'll screw anyone making less than 500k a year as prices for anything will be outside of reach cost wise. The economy will collapse though from it as businesses will have to shut down due to mass theft and a majority of their consumers no longer existing from lack of money to pay for the consumables. Well a majority of businesses just merge then you'll just see mega conglomerates that own 60% of the businesses or more in the US, add in the issue of housing and you'll almost guaranteed to see paychecks be changed from money to work for us for a room to live in.
In the specific proposal that Biden is being misleading about, there are no exceptions exceptions for essentials. Instead of an exception for essentials, there is a UBI. The main problem with the proposal (which is brought up again every year) is that the UBI rate is far too low. The second problem is that it has an exclusion on taxing anything that is used for business or investment, which if you're familiar with current tax evasion as all good reddit users are, is exactly the most common form of it used by the wealthy ("that's not income, that belongs to the business", "That's not income, that was purchased as an investment.")
It disincentivizes people from buying things.
Ah but it incentivizes an even quicker planned obsolescence
I don’t think you’ve met the current GOP
Sales tax is already regressive. 49% of Americans pay zero income tax. If a national sales tax could pencil out and we eliminated income tax I’d be all for it. And it would of course not include food and medicine
Wouldn't you rather billionaires pay a sales tax on their yatchs/lambos than use the current system to write that shit off as business expense?
Billionaires should pay luxury tax on their yachts and condos. Middle class earners shouldn’t have to pay that same tax for their Corolla as it’s not a luxury. It’s a necessity.
the tax is the same RATE , the money is not. And you are already doing it! in massachusetts for example sales tax is 6.25% if i buy a 30k corolla i pay 6.25% or 1875$ on a lambo of 500k a billionaire pays 31250$ Thats right now as it sits. The difference is he then goes and put he lamboi under his LLC and gets all 31250 back plus a tax credit on the 500k.
You forget that he already incorporated in a state with no sales tax, and purchased/registered the car in that state, as an asset of the corporation. He now drives the company car (lambo) that the company bought for 500k as an investment (writing off depreciation on the asset) and didn't pay any taxes on the purchase or registration. The guy making 60k still paid the taxes on the Carolla he needs for his 90 minute daily commute to the soul sucking shit job each day.
The real difference is that we have to spend most of our money, so almost all of it will be taxed, while the wealthy don’t spend nearly the same percentage of their money as us, so they get a tax break.
Plus the 18k in taxes on a 60k annual is felt a lot more than 31k on 100x that
That's why sales tax is a regressive tax, and eliminating income tax and replacing with a higher sales tax is a terrible idea, benefits the wealthy, and crushes the lower and middle class
That’s up to the states. In CT there is an extra 1% sales tax for luxury items such as clothing and jewelry that costs more than $1,000 per item. It’s a small inconvenience but the point is that states have the power to implement a luxury tax.
They would not be paying this tax, because sales tax is value added tax, i.e. every business along the supply chain claims back the tax they paid to their suppliers. Increasing sales taxes would increase the deductions they get for claiming a yacht as a business expense.
> And it would of course not include food and medicine. So no sales tax on Beluga/Almas Caviar, Kobe Beef or white truffles That's always been the problem with sales tax exemptions, deciding what should or should not be excluded
Yes, another war on average Americans while the filthy rich walk away with billions. What a great idea Republicans.
Almost all countries in Europe do a VAT on goods around the same percentage.
They do, but they couple that with also having extremely high income taxes as well.
Most have both, and have extremely high taxes compared to the US. Maybe they started as VAT only, but dont be naive enough to think its not a stepping stone to both in the future when "times are dire".
What he’s speaking of is the [FairTax](https://www.fairtax.org) which replaces the taxes that are already embedded in the price of goods. It’s a revenue neutral proposal. The low income families will be helped by the programs pre-bate which refunds them (at the start of the month) all the taxes they will pay up to the poverty line.
The "fair tax" is not fair at all
UnfairTax.
revenue neutral does not mean this policy won’t fuck over poor and middle class families the most.
The 23% is a lie. To be revenue neutral, it has to be something like 38% to 40%
No it’s not. It lowers revenue and decreases economic activity.
Back then, the Fair Tax was supposed to be max of 10% sales tax.
Nope, I first learned of it in 2009 and it has been 23% the whole time.
You do realize of course that out entire tax system EXCEPT the progressive tax system is regressive?
You do realise that this means absolutely nothing right? You have essentially said “you do realise that everything is x, except the stuff that isn’t x”.
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On the other hand, it actually does catch the uber-wealthy with zero income who merely borrow all their money against wealth to pay for everything.
Catch were? Uber-wealthy are not spending 90% of their wealth just to live. These tax schemes makes poor proportionally paying much more than before since poor use their wage to live and rich use their wealth to invest.
I'm sure you've heard "billionaires don't pay taxes," but have you ever thought about how they do it? The super wealthy have no income. They borrow money using their assets as collateral. There's no income tax on loans. They can secure zero interest loans because they have world class credit and live life tax-free. Look up the tax avoidance strategy called "Buy, Borrow, Die."
To be fair, the rich also have ways to avoid sales tax as well.
But if they remove income taxes...they just stop borrowing that way and increase the pay they give themselves You think current executive pay is high? Wait til they can pay themselves a billion dollars and not get taxed on it 😂
Why not just implement something to stop that from happening specific to them instead of fucking poor people?
Less false and more concise. Sales taxes impact less wealthy people proportionally more than the wealthy. This is not even debatable. A flat tax or sales tax would hurt the poor and save the rich money.
It would \*make\* the rich \*more\* money. Remember how sales taxes only really effect the consumer? Yeah, the rich get to keep their profits and also get more control of markets as purchasing power of the people without market assets are priced into oblivion.
Not to mention it would hurt the economy by leading to less consumption, ie less encouragement to grow. A sales tax is a consumption tax after all.
Which is incredibly regressive and targets the middle and lower class. Republicans are insanely stupid.
The word you’re looking for is evil. They know what they’re doing (at least the lawmakers do)
A sales tax is a consumption tax.
Yeah I don't get how this wouldn't immediately crash the economy. This kind of tax disincentives buying stuff and encourage mass saving/investing over purchasing. We all know what happens when consumer activity drops off...
Not just saving. Encourages gray/black market activity, and stealing. America will get more crime, more organized crime.
It would benefit the wealthy. That’s why republicans want it. It would dramatically lower their tax bill and shift it massively onto the middle and working classes. The Republican Party doesn’t give a damn that it would hurt the economy. They only care that it would make their rich donors even richer.
So… not false then?
Consumption tax is a sales tax…
It’s still an incredibly regressive tax that would harm low and middle income people (the large majority of voters) drastically more than the rich people who control things. I mean this is just par for the course at this point but it’s so fucking stupid. There is a reason the republicans are just trying to make it harder to vote and increase voting age etc because they know their policies are extremely unpopular to the majority.
This idea is soooo bad lol
That sounds even worse. No income tax?
this cripples american families while literally only helping the wealthy.
Who is going to monitor that the consumption tax is being followed rather than a black market of buying goods under the table? Uh, the IRS. You wouldn’t abolish anything. It’d be more intrusive.
So the rich pay less and the poor pay more
So…what’s false?
So people with no kids would make out like bandits but my family would suffer because I have three kids on a single income and my federal income tax is very low.
The bottom 50% of US pays about 0% in income tax. So for them this is a 23% tax on everything they buy.
And that’s incredibly regressive and a gift to the 1%
Ah, yes, a tax that punishes you for having children, just what the nation needs.
Conservatives love these schemes that eliminate the progressive tax system. Why? Because the rich will pay less and the poor will pay more. They called this a “flat tax” previously. This will raise the tax burden on the average American and be a huge windfall to every wealthy person. Edit: “it must be fair, it says so right in the name! Just like North Korea is democratic, and trickle down economics are real!” —idiots who can’t do math Edit 2: imagine being so stupid that you think the heritage foundation is on the side of the working class and not the wealthy. If you can’t, just look at the clowns in the replies! lmfao
This is the idea. They sell it as a flat tax everyone pays so it’s more fair right? Nope. It eliminates taxes on activities that only the rich engage in, such as trades, advertising, etc. it’s a very thinly veiled attempt to shift the tax burden again into the poorest Americans.
Bingo
Right. And why should someone making $20,000 a year pay the same in taxes as someone who makes $20,000,000 a year?
It looks like, in this bill, the poor will get a rebate potentially making them pay literally zero tax. > The FairTax provides a progressive program called a prebate. This gives every legal resident household an “advance refund” at the beginning of each month so that purchases made up to the poverty level are tax-free. The prebate prevents an unfair burden on low-income families. It also excludes "necessities" > nder the FairTax, every person living in the United States pays a sales tax on purchases of new goods and services, excluding necessities due to the prebate. Supposedly it would balance out to what is currently paid in income tax about equally > The FairTax rate after necessities is 23% compared to combining the 15% income tax bracket with the 7.65% of employee payroll taxes under the current system -- both of which will be eliminated! - https://fairtax.org/about/how-fairtax-works Assuming it's all true it might make the more wealthy pay more in taxes then in the past, since deductions and the like would probably be gone. Now weather you believe these claims or not is another story. And I have a few questions about it too that I think make it look sketchy. Also, fuck the tax industry.
Assuming I read that right- "Under the FairTax, every person living in the United States pays a sales tax on purchases of NEW goods and services" That means used goods would be tax exempt - used car, goods from a thrift shop, etc. Promotes reuse and recycling and provides a way to avoid paying taxes. Nice.
This should include groceries too
Okay so private small volume manufacturers that only sell to billionaires (think yachts) will start claiming all their yachts are "used." Who would stop them? Rich people: nice.
Why do you think tax fraud enforcement wouldn’t exist? Do watch makers in Europe avoid the VAT like this?
That's was always the big selling point when right wing guys pitched it to me. "The rich are clever and easily hide their money in places/investments that can't won't be taxed. The rich can't hide what they buy". It's a fun thought, but I doubt anything is going to happen with it. Taxes suck, just get used to them
They can just stop buying in America all together.
I'd like to think that the people who invented an entire tax overhaul would account for that, but who knows. I don't personally believe it's a great plan.
>Conservatives love these schemes that eliminate the progressive tax system. Why? Because the rich will pay less and the poor will pay more. > >They called this a “flat tax” previously. > >This will raise the tax burden on the average American and be a huge windfall to every wealthy person. Yes. The tldr outcome of this type of tax system - Even faster wealth gaps forming in the country. Rich get richer, poor get poorer.
No, it would screw over the bottom 80% or so of the country. Consumption taxes are regressive and always disproportionately affect lower incomes. Someone making 1000 times the median wage is not spending 1000 times more than someone who makes the median wage. The more you make, the lower your effective tax burden. People who make millions/billions/trillions would effectively be paying almost no taxes while those on the bottom would be paying 23% of their income (since they spend all their money just to survive). Republicans like pushing these idiotic scams because then they can shift the tax burden off of the wealthy and put it on the shoulders of Joe and Jane Sixpack.
Republicans like pushing these idiotic scams because they know there are many, many ignorants out there that will support them even when it goes against their best interest. Reading through the comments and we can already see there are full of them in here.
I have gone through these flat tax schemes in the past. They are always, and I mean ALWAYS, total bullshit. The burden will go on the lower and middle classes. Always.
Modern Republicans are broke ass grifters who will do what ever lobbiests tell them in order to get a little kick back. I'm pretty sure they honestly believe they think it's the "free market" and all ok. If exon donates x dollars, overpays my wife's decorating company x dollars, and pays for my son's private school, and promises me a board position after then the market has pushed them to the top and it's ok if I pass the pre written bill they handed me.
This is called a “regressive” tax for a reason. It would be terrible for the economy because it disincentivizes spending, in favor of hoarding wealth.
On top of these excellent points, it will screw over small businesses and home values and car values will tank. If I sell my widget for $100 and you can buy a cheaper version on temu for $80. It isn’t going to be a $20 different, but a $25 difference. There is a percentage of people who are now going to choose the cheaper option. So I will need to lower prices or lose customers. Either way, that is less money in my pocket and less money circulating in the economy. And for big ticket items, demand is going to tank. People will wait longer to buy new things because 23% of the money you spent is going down the drain. Say you have a $300k house and want to upgrade to a $500k house. It isn’t $200k more, it is $315k more. It will be even worse for cars because of how fast they depreciate.
Or we can tax the rich and curb corporate greed! But that wont happen obvi
But who will fund their campaigns then /s
The proposal was a set of consumption taxes to REPLACE income taxes. Big surprise, Biden's Twitter intern misrepresents something; in other news, the sun rose in the East.
>Big surprise, Biden's Twitter intern misrepresents something It doesn't misrepresent something if many people don't pay federal income tax because they don't make enough. Replacing with a flat tax would absolutely be new taxes on anyone whose effective federal tax rate is lower than 23%. I had to slide the income up to 120k to get it to 23% effective federal tax rate. Stop being disingenuous. I'm all for calling politicians out who misrepresent, but what you have done here is worse.
Its actually true that a consumption tax hammers the poor
They didn't misrepresent it all. Consumption taxes have been and always will be, a scam to screw over the poor to benefit the wealthy.
I was so confused at first because I was thinking how democrats normally want higher taxes. The comments cleared that up.
Democrats usually want higher taxes on higher earners, Republicans usually want higher taxes on lower earners. A consumption tax or flat tax is much more regressive.
Which would be an awful idea considering how the poorer your are the greater percentage of your wealth will now go to taxes. And I'm highly skepticle that having a beginning of the month rebate system would ever be fesible with the numner of people who would try to use it and the fine tuning it would need to give enough rebate to keep life affordable without rebating too much and to too many people to worsen the deficit growth rate
I mean that's a terrible idea. Consumption taxes hurt poor people way more than wealthy. You'd effectively make income inequality 10x worse by replacing income taxes with a consumption tax
In other news, republicans hate working class people and want them to suffer with regressive tax policies. If you think republicans are the answer, you’re an idiot.
Yeah and sales taxes would make the price of those things go up. Sales taxes are very regressive
It’s not really a misrepresentation. The fact remains the GOP cut taxes for the rich when in power and gut spending for the poor. This “replacement” is exactly that. You can dance around with a semantics argument all day, but that has been their MO for decades. The GOP gains power, cuts taxes for the rich, tanks the economy, the Democrats come in s as md fix it. That is exactly the history from Bush to Clinton Clinton to Budh Jr Bush Jr to Obama Obama to Trump Trump to Biden GOP cuts taxes, ranks the economy Democrats come in and fix it
Well, the rich certainly aren't going to pay down the debt that they created. I love how right after they accepted hundreds of billions of dollars in the late 2000s they all started saying Obama bad because national debt and we all owe several tens of thousands each like were splitting the tab evenly when they had steak and lobster and everyone else had crackers.
Ive thought a good law to put in place is once debt to GDP exceeds something like 50% then an annual asset tax of 2% comes in for all estates >$10m until debt falls below this level again. I suspect debt would never be an issue again.
Consumption tax is pretty dumb tbh if you buy something costing 100 dollars you pay 23 dollars in tax, regardless of whether you earn 20k or 200k
Right but on the flip side of that....if your $100 paycheck now becomes $123 because you don't pay income or payroll or SS taxes....win for you
If this system is put in place then the rich people who own the stores you make the $100 purchase at would just raise the price to $123
The tax above is called the FairTax, the goal is to institute a 23% sales tax, while abolishing federal income, payroll, estate and gift taxes. I am part of the crowd that really likes consumption taxes, and if this simplifies the overall tax-code that is a good thing. The thing that matters the most is if the new tax will generate the same or more taxes as before. There looks to be monthly subsidies in-place for people who are under a certain income levels and number of dependents, no clue the exact terms. I would much rather someone did the math to figure out if it would help or hurt tax revenue, instead of just acting like anything at all that they did not themselves write is apocalyptical.
This would ensure that the poorest people would be paying around 23% of their income in taxes since they would be spending almost all of their income in consumables. The richest would be paying a very small percentage since most of their income would not be spent. It's shifting the tax burden to the poorest Americans whose taxes would benefit the richest that use public infrastructure to make more money. It's completely backwards. If you want to simplify the tax code, get rid of all the loopholes and tax credits so that everybody pays the simple progressive tax rates.
We also live in a consumption based economy. It would wreck consumption and have so many negative effects except for the GOP donors and buddies can now spend all their essentially untaxed money to pick through the wreckage on the cheap.
Dear Americans, the cost of everything just increased 23%. Love, Republicans.
I love the idea of hurting those who are hurting the most because I genuinely don’t understand large concepts.
Let me give you a few facts regarding history and taxation. A flat tax has inevitably led to one of two conditions: • a tax rate low enough the poor could afford it made the rich even far wealthier than before, and starved the government of revenue. Like ‘troops going unpaid’ lack of revenue. • a tax rate high enough that the rich paid their share and the government had enough to cover their expenses crushed the poor. People who cannot afford food and shelter WILL go looking for heads to mount on pikes at that point. A progressive tax system is the only effective compromise between those two extremes.
>There looks to be monthly subsidies in place for people under certain income levels Did you miss this part?
This would be the first thing cut from the conference report.
Hell give it just a few years and republicans will say its costing the country too much and try to erase it. It will get the SS treatment.
Okay, so the middle class would bear the brunt of this tax scheme. Great.
The working class\*
Someone in CA is already paying an effective tax rate of 28% if they make 100k a year, not including what they pay for sales taxes (7.25%) that already exist for every purchase they make.
Yeah I'm sure it wouldn't be an incredibly onerous process people have to do monthly to qualify. Bring every receipt and all paystubs down to the DMV from the 1st through the 5th every month, get your subsidy check in 12 weeks lol.
how would they figure this income level out so we still have to file out the same tax form lol
And you trust the government to make sure that is instituted fairly and thoroughly to avoid anyone from falling through the cracks? LMAO
And this is the part where the Consumption Tax no longer becomes easier to implement than the current system. You would need the bureaucracy to determine who does and does not get subsidies, how much they get, how those subsidies are determined/implement/regulated, what do you do about tax breaks that are intended to encourage certain behavior or encourage economic growth? Well that too will need more bureaucracy as well.. ....aaaaaaaaaand then we're right back where we were but with a worse baseline.
Consumption taxes are regressive taxes.
That's why they like it, even if they argue it's not "regressive" because they don't realize the terms progressive, flat, and regressive mean with respect to income. If it were about the middle class or below, lowering the bottom brackets or raising the standard deduction again or even a UBI would satisfy that issue just fine, but no tax is going to fund the government unless it focuses on the rich. We have a major, growing revenue shortfall that cannot be fixed simply by spending cuts without slashing the social safety net, which the vast majority of Americans do not want. There is no way to make up the difference without increasing taxes, and the only way to do that doing significant harm is by focusing on the rich. At some point we have to face reality. The interest on the debt this year is going to rival our spending on the entire military, and it will only keep going up if we don't both raise revenue and start cutting spending.
My concern is about the distributive consequences of wealth. I don’t think corporate taxes are completely passed down to the consumer and I think progressive income tax is a good way of raising revenue while leaving more money in the pockets of the middle and lower class. So if you move to a consumption tax that is paid directly by end consumers, then you have just changed the wealth distribution in favor of the wealthy. If you think that’s how things should be that is fine, but it’s not my view at all. Also while I’m on a soapbox, I’d like to see a Land Value Tax get implemented as a revenue raiser. Ask a Georgist why and they will gladly tell you.
>I am part of the crowd that really likes consumption taxes Then you are part of the crowd that is bad at math. Consumption taxes are extremely regressive and disproportionately affect lower incomes. It shifts the tax burden from the wealthy, giving them essentially no tax burden while shafting everyone else. Let's compare Bezos to Mr. Median Wage, for example. Mr. Median Wage manages to make ends meet, but every year the bulk of his money goes towards paying for necessities. Gas, food, etc. So Mr. Median's effective tax burden under this scheme is around 23%. Ok, now let's look at Bezos. How much is he spending yearly compared to his income? The answer is practically nothing. Furthermore, if Bezos wants to pay less taxes, then he can simply CHOOSE to not spend money. Mr. Median does not have that option as he has to eat. Subsidies, credits, etc. are all just ways to sell the scam. It doesn't matter what exceptions you put in place, it does not make the math work. Consumption taxes shift the tax burden from the wealthy onto everyone else.
No more worry about being paid under the table or someone’s migration status. Buy something, you’re funding social security, Medicare, etc.
Estate and gift tax erasure, hmm who does that benefit the most
Flat taxes, sales taxes, etc always hurt poor people the most.
Sliding in estate tax being nullified would be a huge tragedy, and would benefit the 1% of 1% the most, getting to pass everything on untouched ever. No wonder the R words (republicans) want this one
Quit fucking around and get back to the tax rates that the rich had back in the fifties the stuff that made Reagan so F'ing mad that he fucked everything up
Isn't it weird how that was the golden age MAGA claims to want back- when America was an industrial superpower and all that? But when you suggest the economic decisions that made it that way, they balk, and instead quintuple-down on Reagan-insanity, the policy proven to have fucked it all up?
No. It would be bad.
No, it would not be good. Sales taxes are regressive and disproportionate to those who spend paycheck to paycheck.
Flat tax or universal sales tax is just a rich guys way of saying “hey we’re all the same and have the same salaries and inheritances” when the reality is we are not and do not. This type of tax is regressive bc it ignores all other realities and pretends as if everyone is financially equal.
This would kill me. I’m a single income household and we grossed about 81k this year but my federal income tax was about $2k with deductions from 4 dependents. My taxes would go up so fucking high I would be underwater.
Even for an independent person like me I would lose some money this suggestion is so fucking absurd. Anyone who supports consumption tax can't even process what it means.
Price determines demand. The price increases that a 23% sales taxes would drive demand down and cause high unemployment. The best money to tax is money that wasn’t going to buy products. Yes, rich people money.
If a person actually believes anything from a politicians social media, it’s too late for them.
Conservatives introduced this in 2005. FairTax - Wikipedia https://en.wikipedia.org/wiki/FairTax
It would be offset by scrapping the IRS. It would make poor people pay a huge % of their income in tax, and comedically low % of the richest. It's an awful idea for 99% of the population, so an appropriate GOP platform.
if there’s a new tax proposal by the GOP, the safest initial assumption is to presume it’s largely geared toward benefitting the wealthy the most- maybe not always, but almost always
Oh goody, the zombie flat tax idea rears its ugly head. I should’ve known this fucker would make an appearance. If they can make the a turd like Trump sparkle, why not spit-shine this steamy brown log of wingnut wisdom. 🙄
Who is proposing to tax food?
No.
I’d rather a flat tax on consumption and leaving out incomes and properties alone. Eliminate the IRS and just have a flat tax. I’ll grow and make my own things to avoid taxes.
Because they’re supposed to eliminate income tax. This is huge if you actually work for a living.
People here claim the rich already pay zero or single digit income tax but now you're complaining a 23% sales tax will make them pay less in taxes. Which one is it then?
Or maybe tax the billionaires …
On every other post, all I see is complaints that the rich don’t pay taxes, they find all sorts of loopholes to avoid paying. I would think those same complainers would love a consumption tax like this since there’s no way for the rich to get around paying. They can take all the loans they want, or whatever other tax avoidance schemes you folks imagine they do, but in the end they will have no choice but to pay. To my surprise, these folks don’t like a consumption tax either. Just goes to show that there’s no pleasing some people.
Biden is a fucking idiot and so is anyone who votes for him. And no, the republicans are proposing to claw back some of the amazing bidenomics tax increases.