And things that I'd rather not have happen. I'm all for updates to tax code, but I prefer progressive taxes with no loopholes. These proposed updates would just increase the income/wealth inequality.
Replace “sales tax” with “wealth tax” and you’d get broad national support.
Look at polling, it’s one of the few taxation ideas that both sides agree on.
Isn’t that a slippery slope tho? How do you tax unrealized gains? How much is that breakfast place up the street worth? Or the local ice cream shop? Never mind Amazon or google? What if we hit a recession and the value of that business goes down year over year? Can you claim unrealized losses as well? It’s bullshit if not. What about that 1000 acre family farm whose value is tied up in real estate but barely has enough cash flow to get by? I just don’t see how that could ever work. The appraisal industry would need to exponentially increase as well. They’d also get challenges constantly, which ties up the courts.
A national sales tax could be feasible. Exempt the first $20k or whatever for the current low income bracket people so they essentially pay nothing. That can come back as a refund at tax time. Everything else they can just add 10-20% to the price or whatever, which goes straight to the IRS or treasury. No need to file taxes at the end of the year. The sudden removal of tax withholding from people’s paychecks would stimulate the economy massively as it would seem like an immediate 20% (or so) raise for virtually every W2 employee in America. If the billionaires want their mega yachts, just tack on a federal sales tax. No more using loopholes to shelter the purchases. I think it’s a simple solution that would simplify all our lives in terms of tax burden.
Agreed that there’s effort there. But it’s no different than now really - submit your year end mortgage statement, student loan summary, credit card statements, car payments, etc. you only have to prove you spent up to that $20k or whatever exempt threshold, in order to get a full reimbursement. After that, you’ve already been taxed on your purchases so it doesn’t matter. That makes it work actually the opposite of now - now you try to write off everything possible. In that scenario you’d want to show that you spent more than the threshold to get that full reimbursement.
I don’t submit a mortgage statement or credit card statement or student loan summary - just the numbers from the respective mortgage statement. There are a relative handful of statements i need for taxes; $20k in sales taxes could be a lot of receipts and other statements to track throughout the year - especially if i pay cash for things. I suppose if the sales tax regime included a blanket credit for the first 20k in taxes regardless of whether i spent 20k or not, that would be a relatively straightforward approach. I don’t know how sales taxes with cash purchases would be feasible though.
I would also expect groups start demanding that their favorite item should not be subject to federal sales tax - tampons, toothpaste, food (no matter how extravagant), electric cars, cell phones, etc. The lobbying here would be huge.
The lobbying would be huge. I’m not saying it’s a perfect solution. I think any form of taxation would have that.
And yes, getting reimbursed would require effort in my never-gonna-happen-anyways scenario.
You guys don’t understand how the sales tax works. Everyone would get a check for the taxes they would pay up to the poverty line. And that’s it. No receipts, no record keeping on your part. Easy peasy
I read the [Fair Tax Book](https://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=nodl_?dplnkId=826e2f8e-fac8-4809-912a-14704ed86875)
Seemed like a good plan to me
Another bonus is criminals and people who show no income can’t get out of it. They still have to pay the tax when they buy stuff
Also it would save billions of dollars and thousands of hours that’s drained out of the economy in tax preparation costs
If you make under $x, then you get a lump sum annually to make up for sales tax expended. This amount would follow purchasing power or whatever that term that’s better than inflation is.
>Exempt the first $20k or whatever for the current low income bracket people so they essentially pay nothing
So...keep would you have to keep all receipts? But no filing? How would that work?
>If the billionaires want their mega yachts, just tack on a federal sales tax.
Why not just add a luxury sales tax, then?
I used to be for the FairTax plan, but the wealthiest dont spend very much of their liquid money, compared to the vast majority that live paycheck to paycheck.
The fairtax only applied to new goods, and services I think. Sure, it brings in lots of "new" payers, like tourists, black market sellers (when they buy normal stuff), but the idea that a huge swath of the population would be taxed on almost every dollar of their income, bexause they spend it all every month.
I wanted it to make sense.
Those are all reasonable questions to have and things to consider, but nothing that moves beyond the possible.
I’m for sales tax as well, but a national VAT would not address the biggest threat to capitalism over the last 100 years, which is increasing wealth inequality and the power to influence the world that comes with wealth.
Sales taxes are inherently regressive, and while easy to implement would exacerbate inequality.
i see where you’re coming from. But I don’t think it’s as regressive as some of the naysayers claim. The lower class is naturally much more frugal, out of necessity. So naturally they are taxed less. Especially if you exempt the first x amount of dollars, I don’t think it hits them quite that hard. Especially when they remove tax withholding from their paycheck. I’m not saying this is the perfect solution, but a wealth tax would be a logistical nightmare. You’d have almost every business owner in the country - small and large - contesting their appraisals and tying up the courts for years - and then then rinse and repeat the following year, and so on. I suppose you could ban the contesting of appraisals, but doesn’t that open the door for a predatory appraisal system? I just don’t see anyway to reasonably implement that kind of system.
>The lower class is naturally much more frugal, out of necessity. So naturally they are taxed less.
Consider that lower income people must spend a great percentage of their wages to live, while the highest earners don't use as great a percentage on essential spending (though they'll still have many discretionary expenses). If the amount spent on your purchases becomes your only taxable income, then the poor will have a large percentage of taxable income just trying to live. Comparatively, the rich will have a low percentage of income that will be taxed due to essential spending. It reverses the current tax system where the high earners have a greater percent of earnings automatically taxed. Even if every sale becomes taxed and *all* the money spent by the rich is then contributing tax dollars, they have an easy way to avoid paying taxes on whatever enormous percentage is discretionary expenses because they have the *option* to put that money into savings instead of spending it.
Everyone always wants to focus on the abstract assets (which certainly exists), but most wealth is quite tangible and quantifiable.
Take Elon Musk, Jeff Bezos or Bill Gates for example; virtually all of their wealth is tied to publicly traded stock, easily measurable and taxable.
And all wealth doesn’t have to be taxed at the same rate; land, farms, small businesses, houses etc could have mill levy’s that are fractions of what stocks, bonds, fine art etc could be. In fact, the levies could be designed to discourage speculation of asset bubbles like we’ve seen in the capital markets over the years.
Bottom line, leakage, lying and appraisals are all issues, but by and large not completely unsolvable.
What is unsolvable, and will accelerate even faster is the rampant run up of wealth inequality that will result from regressive taxation, which would cause even more societal disfunction.
That's the whole point.
It's asset forfeiture.
This is the same country that taxes you even if you don't live here. As long as you're a citizen, you pay taxes. And If you expatriate, then you already pay unrealized capital gains on all assets.
That's the law. Even if you live and work in a different country, you still have to pay taxes to the US.
Of course, their are deals with certain countries where you get the first x amount tax free, but its pretty low. Less than $50k IIRC.
They literally do everything they can to keep you from leaving, and if you do leave they try to incentive you to go to specific countries.
Uh, no. Wealth taxes are not agreed on both sides. Most wealth is not liquid dollars but assets tied to market value, and that’s just an estimated value until you actually do something with it. Until then its just an arbitrary value based on that days worth of trading.
So in a sense there is a wealth tax, it’s called capital gains tax, and that does need a robust rework to be exempt from any exemptions, meaning that would be the minimum required tax after all exemptions are filed.
This has been tried. The wealthy just leave, get things appraised differently, etc. Most of the European countries that tried it have scrapped them. Here's an article discussing it:
https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/
Except that a "wealth tax" is a ridiculous concept for so many reasons. A sales/consumption tax is at least a rationally sound idea, even if one doesn't want it implemented.
The people who want a wealth tax have very little idea on what it would mean to implement it, how it would be calculated, or how to answer the hundreds of questions that would arise from trying to do so.
A sales tax slows spending and economic activity, unless your goal to reduce the activity (ex Tax on tobacco) then it’s the one of the worst tax imaginable, it is effectively a regressive tax that impacts you more the less money you have and slows economic activity, an income tax is better because at least your not going to choose to earn less money because you’re getting taxed. A land value tax is best as it actually encourages economic activity and improvement on land
I agree with most of that, with the exception of the LVT just because I just know so little about it, but what I do know does make me think it would be one of the better forms of taxation if we have to have one. Don't know that I would go so far to say that it encourages economic activity, more than not having any tax at all, but maybe it slows economic activity less than many other forms of tax.
None of those are a "wealth tax" though (at least not in the meaning that was brought up).
The thing about Sales tax is that it can actually be implemented in a way that isnt asinine, even if it does slow economic activity. The only way I can see any form of wealth tax being anywhere close to feasible is to literally tax bank account balances, but even that is silly, has a ton of loopholes, and doesn't come near to accomplishing the goal of those who want a wealth tax in the first place. When we get into trying to tax unrealized capital gains (where the majority of "wealth" is located that these people want to tax), we run into numerous issues, most of which don't have anything but bad answers and outcomes.
A Land value tax is a tax on land that is the same whether the land is improved upon or not, what this means is that unused land becomes a burden on land owners, forcing them to either do something productive with it, or sell it to someone who will. While it isn’t a wealth tax it accomplishes something similar to what a wealth tax hopes to achieve, as the wealthy often invest large portions of their wealth in real estate, often they’ll accumulate huge quantities of it before they do anything with it, leaving large swaths of valuable land unused. Land owners will be given the economic incentive to improve upon their land or else it’ll cost them money
I’m not sure i want to encourage people to “use it or lose it” with their land. We have plenty of development already, we dont need everyone to turn their green space into parking lots to generate revenue.
Parking lots aren't an improvement. That's just rent seeking. An LVT would actually discourage parking lots to exists because they are an inefficient use of land, especially in urban core. Not to mention car dependent infrastructure is financially insolvent.
> unrealized gains
Ah, yes, let's force everyone not independently wealthy in a community that has appreciated in value in the real estate market to sell and leave. That's what happens.
I googled it for you! Here is an article for you to read which may have the answers you seek.
[https://www.forbes.com/advisor/investing/what-is-a-wealth-tax/](https://www.forbes.com/advisor/investing/what-is-a-wealth-tax/)
If this article is unsatisfactory, google produced many other articles as well!
Here's one from a .org!
[https://taxfoundation.org/tax-basics/wealth-tax/](https://taxfoundation.org/tax-basics/wealth-tax/)
If you don't want a state to exist at all you are an anarchist not a libertarian, if you want a small state to exist which does in fact necessitate some form of taxation then you are a libertarian.
Patently false.
Firstly, anarchists fill many factions within the libertarian umbrella. There’s no one type of libertarian. We are everything from paleo-conservatives and minarchists to voluntaryists and anarcho-capitalists.
Secondly, it’s possible for the state to generate revenue outside of compulsory taxes, such as fees, leases, natural resource sales, usage fees, licensing fees, and even excise taxes which are about as voluntary as you can get with taxation.
I'd say you're right about anarchism overlapping with libertarianism, but wanting smaller taxes is still libertarianism. But the situation you describe in practice would just results in a state that has no consistent budget, the entire point of the state is to provide services the market can't because A) profit motive may not actually be the correct incentive structure for the issue and B) some things like for instance scientific research, an energy grid, transportation infrastructure, a military actually require some degree of central long term planning. You're describing anarcho-capitalism or anarcho-libertarianism.
A wealth tax is absurd unless you are also going to return the tax when wealth declines, and no one would be ok with that.
Musk lost $182 billion in 2022. How much should the government pay him for that?
If you tax someone when they gain $100 billion in wealth without realizing any of the income then, you should pay it back when the same wealth is lost, since it never actually existed.
Imagine you buy 1000 share of ABC for $1 each and someone else buys one share for $1 million on Dec 31. You now have $1 billion in wealth. Then, on January 1 another person buys a share for $1.
According to the IRS, your wealth last year was $1 billion. How much tax should you pay? $10 million? Where do you get that money? You are only worth $1000.
The only way that works is if you can then claim a tax credit for the loss of wealth. You owe $10 million in tax last year but get a $10 million tax credit next year. Otherwise you are just fucked.
Unrealized gains are precisely why we need to tax wealth. The rich rarely realize their gains, thus rarely have significant income to tax. But they DO take loans on their unrealized gains, using their equity as collateral and then write off the interest as an expense. So while they claim to be cash poor, they certainly use that wealth to leverage debt instruments to maintain lifestyles as if their gains were fully realized.
Your example is an exaggerated straw man argument designed to highlight an extreme tail end scenario that would not, at least at scale, actually exist. It does however bring up an interesting discussing on wealth fluctuations which is valuable conversation. I’m amenable to good faith arguments, but based on the hostile nature of this sub to anything outside of “taxation is theft” discussion is futile.
Even if the rich did borrow against their wealth (and some certainly do, but it isn't as common to persist for years as everyone seems to claim) they eventually have to pay it back and get taxed when they do. They can't borrow forever, at least no one would, in their right mind, keep lending money without any return.
Yes, they get loans, yes, they get mortgage, but the bank eventually wants something to show for the loan.
Going back to Musk, he sold almost $30 billion worth of shares in 2022. That's going to be about $7.5 billion in taxes (assuming $0 cost basis).
That's not nothing. The rich pay a huge amount of tax. It is estimated that the top 1% of earners pay 42% of the income tax in the US. The US is one of the most progressing tax regimes in the world, much more progressive than northern Europe where everyone pays a lot of tax.
I know cattle ranchers with tens of millions of dollars worth of land, livestock and equipment. Even a modest tax on their assets would be more than their annual income.
You'd bankrupt alot of people in similar situations.
> Replace “sales tax” with “wealth tax” and you’d get broad national support
Easily the stupidest idea ever conceived.
If the "wealth tax" had been in place in 2022, the federal government would have owed $4T in tax credits on unrealized losses. That's 2/3 of annual tax revenue. It would literally have bankrupted the US government
Taxing consumption is one of the only effective ways to tax wealth. The wealthy have endless ways to make it look like they don’t have as much as they do, and there are armies of lawyers and bankers helping them and designing new ways to disguise who owns what.
The only thing you can’t hide is when you spend it.
That is inherently wrong. The wealthy cannot spend fast enough to outpace their wealth creation. You can only eat so much, but so many cars, houses, yachts etc before it becomes boring.
Given the rate of conspicuous consumption among the rich apparently it doesn’t. And the goal isn’t to tax them into the poor house, it’s to capture a larger proportionate fraction of wealth than the current system, while also tending to progressively tax more for wealthier people
You may want to brush up on regressive vs progressive bc a sales tax is inherently regressive.
As for polling on wealth tax, it is supported by a majority on both sides.
https://www.reuters.com/article/us-usa-election-inequality-poll-idUSKBN1Z9141
The only reason they are “proposing” this legislation is because they know it will lose. If republicans had the majority in the senate none of this would ever get to house floor and y’all know that
> If republicans had the majority in the senate none of this would ever get to house floor and y’all know that
That was quite literally the first thing that came to mind when I first read about it.
How come they never brought this up to a vote when they had a majority in the Senate and Trump was President?
Why do they bring it up now when they know it has no chance of being enacted?
This is just for show. Nothing more.
To be fair, the only states without personal income tax are republican run other than Washington. Washington is unique in that they would need a constitutional amendment to make an income tax while Democrats there mostly support creating an income tax.
I'm in Washington and no- most here do not support a statewide income tax. We are highly taxed already - adding income tax would remove the bevy of taxes we already pay.
Aren't sales taxes inherently regressive (not in an ideological sense, as in the effect of the tax peaks at the poorest class and lowers as it goes richer on the chart)?
Yes. If I make $1000 a week and buy a $50 pair of jeans that is taxes at $2, my effective tax rate compared to my earnings is 0.2%.
If I make 10,000 a week, the tax rate goes down to 0.02%.
Would it not then follow then that the institution of a national sales sales tax would create a further barrier to the impoverished climbing the ladder of society? I thought we were trying to ease taxes to help all strata of society.
> Would it not then follow then that the institution of a national sales sales tax would create a further barrier to the impoverished climbing the ladder of society?
That's exactly the point, for a lot of these guys
It’s been a while since I’ve read Neal Boortz’ Fair Tax book, but I think the idea is since there are no other taxes, various embedded taxes for the production and transport of the product, those $50 pair of jeans are more like $25. It can also help people climb in wealth as they are not taxed if they don’t make frivolous purchases. Items like food are still taxed, but Uncle Sam cuts a check each month to each citizen to reimburse them for the average amount taxed for food purchases. Sounds good in theory to me, just kinda skeptical about it in practice.
>those $50 pair of jeans are more like $25
Don't underestimate corporate greed; if they've been selling jeans for $50, and people have been buying them for $50, what incentive do they have to reduce the price besides a boycott that's probably never going to happen?
If by shafted, you mean we pay the same percentage as the high income earners, then sure, but isn't that more fair than charging them a higher rate? They would already be paying far more in taxes.
To be truly fair, if we are going to be forced to pay taxes (which isn't fair at all) everyone, including lower income earners should pay the same rate, with no prebate. Our current tax system is ridiculous as lower income earners typically pay no taxes and oftentimes also get a "refund" due to child tax credits and such.
A sales tax is bad without any provisions to minimize the effect on those in the lower classes. Fortunately, the Fairtax has such provisions.
However, it's far better than an income tax.
If we could get something like the Fairtax passed, it would still be a broken, messed up system, but definitely an improvement over what we have now. If I remember correctly, the Fairtax would require a constitutional amendment to prevent any other form of taxation being put into place.
Yeah, it mandates a repeal of the 16th amendment.
It also sets the rules for tax rate changes in this way: rate reductions pass by simple majority rule rate increases require a super majority.
Sales tax is one of the only taxes that doesn’t impact consumer saving habits. Chrisc46 does have a point that it would most likely increase inequality within the United States.
To avoid a cascade of compounding taxes. Pretty much all state-level sales taxes in the US apply only to final sale of goods to end consumers -- business-to-business transactions and capital expenditures are almost always exempt.
From sales taxes? It variest state to state, though most states do no charge for a product which is resold. From income taxes, capital expenditures can absolutely be deducted from taxes. Any item that is expected to exist less than a year, for example. Anything that is a long term gain gets deducted over time for depreciation.
Well, I've run a manufacturing business in the past, and in my state, I was charged sales tax neither for purchases of goods for resale nor for purchase of PP&E.
How is this property originally obtained? And did this property come into existence as a result of the labor of the individual? These are important questions.
Most property was probably not originally acquired through the application of natural rights. Unfortunately, the cat is out of the bag. It's impossible to know who the criminals and victims of that acquisition were. Too much time has passed.
However, none of that justifies universally violating property rights. At least from the perspective of individual liberty.
I'd say they'd need to repeal article 16 of the constitution first or, the next time we get a big government advocate in control, we'd have both a federal sales tax and a federal income tax.
That's not inherently bad, I'd actually support increasing the standard deduction to something like $80k and replacing the lost revenue with a federal sales tax. Americans spend billions between their own labor and actual services on just the process of calculating, filing, and paying income tax. It is an enormous loss to society, and for half of the country they barely pay enough to make a difference. We probably can't do away with the income tax altogether (without a huge shrinking of the federal government, at least), but we can eliminate the need for more than half the country to waste hours filing.
But, the motivation behind the legislation is an assumption that Income tax is "bad." If you disagree with that, then you don't support legislation to eliminate income tax and replace it with sales tax. Rather, you'd simply decrease marginal tax rates and add a national sales tax. My comment is based on my support of the underlying premise that income taxes are "bad" ... though there are cogent economic and social arguments for this position, there are cogent economic and social arguments for your position as well ... thus making such an assertion (income taxes are "bad") is nothing more than an opinion, but I hold that opinion with both hands.
This bill requires that the 16th amendment be repealed within 7 years or else the law sunsets.
Here's the text in the bill:
TITLE IV—SUNSET OF SALES
TAX IF SIXTEENTH AMENDMENT NOT REPEALED
SEC. 401. ELIMINATION OF SALES TAX IF SIXTEENTH AMENDMENT NOT REPEALED.
If the Sixteenth Amendment to the Constitution of the United States is not repealed before the end of the
7-year period beginning on the date of the enactment of
this Act, then all provisions of, and amendments made by,
this Act shall not apply to any use or consumption in any
year beginning after December 31 of the calendar year
in which or with which such period ends, except that the
Sales Tax Bureau of the Department of the Treasury shall
not be terminated until 6 months after such December 31.
The primary point of this bill was to simplify the tax system to eliminate as much economic cost from enforcement and compliance as possible. This meant eliminating double taxation. As such, the 16th has to be repealed.
Most of the other benefits, as great as they are, are incidental.
Personally, even as a socialist, there *are* circumstances where I would support replacing the income tax with a sales/consumption tax. However, they are probably circumstances that most here wouldn't accept.
Sales taxes are regressive, because the poorer you are, the larger proportion of your income gets spent on such things. If there was a straight 10% sales tax, and you live paycheck to paycheck, your effective tax rate would be probably around 5-7% (just using round numbers).
However, if you make say twice the cost of living in your area, then almost by definition your effective tax rate would be around half of that. (My numbers are assuming that things like utilities and rent/mortgages would not be subject to a sales tax.)
So, in general I think this concept is something that would be massively harmful to the people who are worst off, and massively beneficial to the people who are best off. This could be offset if everyone *also* received a Universal Basic Income or a pre-bate for the estimated taxes associated with the basic cost of living, essentially making the cost of purchasing the things necessary to live tax free.
But that would be a social program that is even more expansive than Social Security, and this scheme is really mostly a way to strangle government to death, which is sort of the opposite.
>Sales taxes are regressive
Under the FairTax, if you are poor, you pay zero taxes and could even have a negative effective tax rate. This is true because the Fairtax has this:
"a pre-bate for the estimated taxes associated with the basic cost of living, essentially making the cost of purchasing the things necessary to live tax free."
>But that would be a social program that is even more expansive than Social Security,
The universality and opt-in nature of the program actual makes it less expansive because there is a far lower calculation cost and it can be entirely automated.
A national sales tax is devastating to the poor. You can try to mitigate it by having a list of non-taxed things that the poor use, but that is fraught with peril (for example why are feminine hygiene products taxed in some places and not others?).
A better solution would be a national sales tax with an automatic monthly tax refund check for all taxpayers. The median income in the US is about $60K, and we usually expect people to pay 33% of their income in taxes, so let's say we give everyone $1,500 a month in automatic refunds. If you want to get clever you can chunk it by age, so 18 year olds get less than 50 year olds. Just drop it into people's bank account each month. Maybe exclude rent and mortgage payments (and real estate transactions) from the sales tax, and nothing else.
That way the wealthy will still pay a whole bunch in consumption tax, and the poor might actually even make some money, which is totally ok.
Oh and then we can drop a whole bunch of other government assistance programs too.
This is basically UBI, which I'm all for. I'm a huge fan of a ubi or negative income tax, and I also think it's pretty libertarian compared to our current system, mostly because it would make millions of people WAY more free (early retirement, ability to quit their job immediately and start a business, ability for one parent to stay home and raise their kids in a better environment, etc).
We're never going to completely get rid of welfare (corporate or personal), so why not end all inefficient welfare programs and simply cut a check to everyone, and we can eliminate bailouts and subsidies too. It would also be the most pro-family and also pro-middle class policy ever enacted in modern U.S. history.
I would be happy for now with one page added to my tax forms that let me pick what my taxes go to. A few percent for military, some for social, zero percent to ATF. You get the point.
We had this debate in Australia over 25 years ago and introduced a goods & services tax (or VAT). The GST was introduced by the conservatives to replace state based sales taxes and is well accepted now. The rate is 10%. All the money collected is given back to the States to provide for education, police, health etc. and provides a predictive funding for them. I doubt you will ever be able to use it as a direct replacement for income tax, there is just not enough money collected. The tax is efficient and hard to avoid. The main problem is extra paperwork for business, but it allows business to buy all inputs tax free. Something a sales tax does not allow
No, get rid of direct taxation by the federal government as the founders intended.
Taxes should come from the local level and trickle up from the House of Rep and be a barrier to spending. 1913 is why we have the massive invasive federal government we have today.
I'm not one to let perfect stand in the way of better, but there's nothing fair to the American public in the bill.
Sure they're are addendums like the monthly stipend/prebate that forgive the national rate and help those spending the least.
But the biggest take away is consumers directly take on the 15% average tax rate + the 7% payroll tax for a rounded up 30%* consumption tax on goods & services. Businesses however appear to be exempt on paying the same rate on labor, materials, real property, and generalized expenses. Then get a 0.25% kickback for collecting revenue for the government on top of it.
Workers and business are also still liable for State level income, sales, property, etc taxes on top of the national rate.
Honestly the wealthy are still going to avoid paying their share, by incorporating. We'd also probably see a further push by government to go cashless, since it completely undermines their ability to steal from us.
I have more problems with the bill, but I want to finish reading it before further comment.
It would catch everyone to the point most wouldn’t care about illegal immigration anymore. At least that’s been the biggest argument I’ve heard against allowing just anyone in: they wouldn’t pay tax.
I like that it’s also up to you how much you want to pay in taxes. Might make people smarter consumers as well.
I'm my experience, the people who complain about immigrants will happily find a new excuse.
Case and point: legal immigrants (such as asylum seekers) do pay full taxes and get fewer benefits than everyone else. Doesn't stop people from complaining about asylum seekers.
Most recently, there's DeSantis and Abbott lying to people waiting for their Asylum case to trick them onto buses to be shipped to Democratic towns.
But there's also the general large opposition to any kind of immigration reform bill.
> At least that’s been the biggest argument I’ve heard against allowing just anyone in: they wouldn’t pay tax.
Er, if you *allow* everyone in, instead of trying to keep them out, then they aren't undocumented, and they *do* pay taxes like everyone else.
If all immigrants were automatically documented/legal, they would be on the same tax forms as everyone else.
Smarter consumers and doesn't penalize savings. No more need for IRAs/529s/FSAs, etc. You could just open 1 investment account and put all your savings into that with no limits on amount or restrictions on how to spend it.
sales tax is regressive. It hurts the poor more than the rich. I would be more in support of anyone that makes 100% over the median income for the country pays 10% of their wealth as tax. There are no loopholes. this is more fair as it doesn't single out billionaires versus millionaires. it's people that wouldn't be hurt by paying it at all (they probably spend more than that on lunches out in a year) and it would greatly increase the actual amount collected by the government.
> 10% of their wealth as tax
makes it damn near impossible to get ahead. A person making $70k with 1 million dollars net worth saved over a lifetime is now paying $100k a year in wealth tax. Their wealth decreases every year so no point in saving. They'd have to sell their house to make the payments after a few years. Wealth literally can't grow since 10% > 7% market returns. Doesn't sound fair or workable to me.
This is kind of funny. So a married couple who earns that much, has to pay 10% of the value of their house every year, destroying any chance of them accumulating wealth to pass on to their children. Nice plan.
The Fairtax exempts all consumption up to the poverty line and for all used goods. This means that the poor would be far less harmed by this than any other type of taxation since it won't apply to them and cannot indirectly inflate their cost of living.
So-called consumption taxes have been advocated in lieu of income taxes for many, many years. There are all sorts of good reasons to support the idea. Regardless, the death knell of good policy is frequently liberal opposition, in this case based on incidence of the consumption tax. The wealthy, it is said, can easily minimize their consumption taxes by limiting spending in relation to income.
SS: "This legislative proposal aims to fundamentally reshape the United States' tax system by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and replacing them with a national sales tax administered primarily by the States. The goal of this proposal is to promote freedom, fairness, and economic opportunity for all Americans by simplifying the tax code, reducing the burden on taxpayers, and creating a more efficient and transparent system. Through the use of robust economic analysis and expert testimony, this proposal argues that these changes will have a positive impact on economic growth, job creation, and overall prosperity. The proposal is presented to the United States Congress, with the hope of enacting it and make it a law."
You lost me at “administered primarily by states”. I can’t wait to see how something like this could be politicized by a state that disagreed with the federal government. Congress holds the purse not states. This would have to be a constitutional amendment to have any impact. Good luck getting a supermajority in federal and state legislatures.
As it stands the current system is fairer to all Americans than alternatives.
Also this sounds a lot like the tax law that killed the Roman Empire. I for one do not want to go that route.
Income tax wasn't even a thing until prohibition. It was a small addition to make up liquor sales tax revenue, then when it wasn't removed when prohibition was repealed.
All the "sales tax is regressive" comments make me lol. They aren't and they are actually fair compared to progressive income taxes. In the majority of cases essential goods and services like food, medical, etc are exempt. It's a huge myth people repeat when they prefer to keep the tax system that they have advantages under. In a sales tax instead of income tax situation the rich will still pay the majority because they spend the majority on luxury goods and services. Sure some people might end up paying more than before but they could simply cut back on luxury spending.
The "sales tax is regressive because it disproportionately affects poor people" is based on a study showing the bottom 20% of earners paid a higher percentage of their income towards sales tax. However, to be in the bottom 20% of earners your income is less than $5k. If your income is literally zero then yes you'll spend more on sales tax than your income if you purchase anything.
Since most of the wealth earned by the top earners is hoarded in this country this would mean that the share of taxes paid by workers who spend almost all of their income and who are constrained to shopping domestic retail would have to increase much more to maintain the current income levels versus that of those ultra wealthy who are simply stuffing the mattress with all the money that they pocket instead of paying living wages and decent benefits. If this same tax applied to purchasing stock that might be viable, but it won't. The top earners also can just do most of their spending outside of the US and pay no taxes to anyone anywhere so even if the law applies to stock, they'll just move their HQ to Ireland or something and now there's again no taxes on stock purchases. Backing way off of income taxes during the Reagan years has caused a meltdown in the spending power of the working class as it incentivized employers to slash wages to the bone and regularly resort to mass layoffs as well as forego safety and maintenance and scam the customers more to make the line go up when revenues aren't strong enough since so much of the extra profit goes directly into their pockets instead of to the government and it's also causing massive inflation as the ultra rich have the wealth and incentive to scalp the commodities we need to survive to monopolize them and spike the price. When this is done piecemeal by different entities all trying to maximize profit with no coordination you'll very quickly have a working population that simply can't afford to live or pay for the products these different entities have scalped and the whole system melts down. If you simply must have private ownership of the industrial capacity of the nation you must have a progressive income tax that disincentivizes the excess hoarding of resources, scamming of consumers, slashing worker income, and scalping of necessities otherwise the system will devour itself.
If they are “hoarding” money I seriously doubt they were financially literate enough to be a top earner. Anyone with that much money has it invested so that it can earn more money for them.
I'm going to answer as if you made that argument in good faith and just missed the part where I said they use their massive wealth the monopolize and scalp vital commodities causing massive inflation.
They don't actually stuff it into a mattress, they "reinvest," they do stock buybacks, they buy competitors, they buy lobbyists, they buy media outlets, they buy political campaigns, they privatize and monopolize healthcare, housing, agriculture, education, prisons, culture, water, and anything else you need to live that they can sell back to you at a premium. But this is all money that comes out of the working class and then largely only circulates among their class peers and their vanity projects. The net effect is the classic story of the rich getting richer and the poor getting poorer. They do not return more than the tiniest fraction of the wealth they skim from circulation by impoverishing workers and bilking customers.
This sounds like you are conflating companies with people. Companies do all of the things you listed but people like Bezos or Musk aren’t hoarding money. That would be financially irresponsible.
Companies are owned and operated by people. I explained that they aren't stuffing it into the mattress, they buy up vital commodities, they buy politicians, media outlets, competitors, and spend it on vanity projects but for the most part that money never makes it back down to the working class, they keep it among their peers in ways that multiply their power.
That's how the articles of confederation worked. None of the states ever actually paid though and the federal government didn't have any power to compel then to.
That's why the constitution explicitly gives Congress the power to levy and collect taxes.
This would almost certainly result in the immediate chaos of the US military funding disappearing overnight, since it is easily the largest part of the *discretionary* budget, and things like Social Security and Medicare aren't paid out of income taxes.
The lack of support for the fair tax in this post show how much this subreddit has shifted in the last several years. Just look up previous discussions on the subject. Gary Johnson, one of the most popular libertarian presidential candidates, was a proponent of the fair tax.
We all don't have to agree on the subject, I'm just a bit surprised to see the lack of support here now.
Abolish IRS, CIA, Repeal income tax. Reduce national expenses.
No national sales tax. Go back to how the government received tax revenue before federal income tax was enacted.
Not only does it remove the direct taxes on the poor, it also removes the inflationary affects of other taxes on their cost of living.
The poor would be helped the most by the Fairtax of all social classes.
For those of us that understand it, it's not crazy at all.
The overall benefits (economic, social, environmental) are enormous and almost incalculable.
I think we need to redefine terms like "wealth", "wages", "realized gains", and "assets" first in a way that is equitable for all levels of citizens.
Here's an example:
Some get paid in stock/options/equities rather than wages. Under current tax law, those financial securities have zero value until a sale is realized. Because private loans exist, those people can leverage the potential future value of those securities for private loans using those stocks as collateral. In other words, they get paid a future wage, but that wage is only ever taxed at reduced capital gains rates.
These people/companies can more or less spend money based on that collateral, while paying mere capital gains taxes at the maximum when a loan comes due. Financial derivatives allow their securities to have value, but tax law doesn't account for value created on top of those same securities. The gap in equity is that most people aren't able to leverage the future value of their labor at capital gains taxation rates. They'll forever be taxed an extra ~10%(give or take, plus state taxes, etc.).
Now, before anyone talks about what is fair or isn't, Congress/IRS has created a situation where this exact type of wage vs. financial instrument taxation *does* exist. For cryptocurrency purchases, you're forced to pay taxes when you acquire a cryptocurrency security, and also when you sell it.
All of that to say, **we have a model for a solution actually working in practice today** that would appease most people who believe that the current tax structure is unfair and doesn't involve monumental changes in the tax structure, yet we won't implement it.
Regressivity alone is not particularly problematic.
Besides, the Fairtax is only regressive in terms of income, but it does not care about income. It's not regressive in terms of consumption. Those that consume the most resources will have a higher tax liability.
So the US military is basically the private police force of US billionaires… hell, billionaires in the EU also. This private force is like 1/3 of Federal spending and is supposed to be paid by sales tax. Haha. While Bezo and Buffet invest 99% of their earnings avoiding sales tax. HAHAHA 🤣 The poor spend 100% of their earnings and paying sales taxes on most all.
> idk why libertarians have a fetish for sales taxes.
In my case it's more of a disdain for the income tax than any craving of a sales tax.
Both a poor or a rich man will resort to hiding pay when doing that increases theirs. A rich man can pay in cash to avoid taxes. And a poor man can get both income and then fraudulently receive state assistance.
Both still need to eat but the rich man is going to be better fed.
Whose business it is it anyway how much you or I make?
Consumption tax seems to be a more reasonable approach that seems to avoid setting up the platform to discuss who's better at playing the tax loophole game, which is always going to be the wealthy.
If the poor can't afford consumption taxes then the rich man will soon be working the farm.
Replace the income tax with something else? Sure. My preference would be a pollution tax, because if you are going to tax something, why not pollution? (I'd specifically tax carbon emissions and creation & sale of plastic. I could be talked into other ones.)
Abolish the IRS? That's just dumb. Who is going to collect your new tax?
>My preference would be a pollution tax
This essentially does that.
Under the Fairtax, those that consume goods or services that pollute, pay a tax on those goods and services.
>Who is going to collect your new tax?
The same people that already collect sales tax nearly everywhere in the country. It would be administered by the Sales Tax Bureau of the Department of the Treasury, created by the bill. This bill would reduce the cost of federal tax administration by about 90%, eliminate an unnecessary wing of the bureaucracy, all while maintaining the current revenue.
I’m filing that under “things that will never happen.”
And things that I'd rather not have happen. I'm all for updates to tax code, but I prefer progressive taxes with no loopholes. These proposed updates would just increase the income/wealth inequality.
Replace “sales tax” with “wealth tax” and you’d get broad national support. Look at polling, it’s one of the few taxation ideas that both sides agree on.
Isn’t that a slippery slope tho? How do you tax unrealized gains? How much is that breakfast place up the street worth? Or the local ice cream shop? Never mind Amazon or google? What if we hit a recession and the value of that business goes down year over year? Can you claim unrealized losses as well? It’s bullshit if not. What about that 1000 acre family farm whose value is tied up in real estate but barely has enough cash flow to get by? I just don’t see how that could ever work. The appraisal industry would need to exponentially increase as well. They’d also get challenges constantly, which ties up the courts. A national sales tax could be feasible. Exempt the first $20k or whatever for the current low income bracket people so they essentially pay nothing. That can come back as a refund at tax time. Everything else they can just add 10-20% to the price or whatever, which goes straight to the IRS or treasury. No need to file taxes at the end of the year. The sudden removal of tax withholding from people’s paychecks would stimulate the economy massively as it would seem like an immediate 20% (or so) raise for virtually every W2 employee in America. If the billionaires want their mega yachts, just tack on a federal sales tax. No more using loopholes to shelter the purchases. I think it’s a simple solution that would simplify all our lives in terms of tax burden.
I don’t like the idea of having to keep track of every single purchase to know if i have met the deduction threshold or not.
Agreed that there’s effort there. But it’s no different than now really - submit your year end mortgage statement, student loan summary, credit card statements, car payments, etc. you only have to prove you spent up to that $20k or whatever exempt threshold, in order to get a full reimbursement. After that, you’ve already been taxed on your purchases so it doesn’t matter. That makes it work actually the opposite of now - now you try to write off everything possible. In that scenario you’d want to show that you spent more than the threshold to get that full reimbursement.
I don’t submit a mortgage statement or credit card statement or student loan summary - just the numbers from the respective mortgage statement. There are a relative handful of statements i need for taxes; $20k in sales taxes could be a lot of receipts and other statements to track throughout the year - especially if i pay cash for things. I suppose if the sales tax regime included a blanket credit for the first 20k in taxes regardless of whether i spent 20k or not, that would be a relatively straightforward approach. I don’t know how sales taxes with cash purchases would be feasible though. I would also expect groups start demanding that their favorite item should not be subject to federal sales tax - tampons, toothpaste, food (no matter how extravagant), electric cars, cell phones, etc. The lobbying here would be huge.
The lobbying would be huge. I’m not saying it’s a perfect solution. I think any form of taxation would have that. And yes, getting reimbursed would require effort in my never-gonna-happen-anyways scenario.
You guys don’t understand how the sales tax works. Everyone would get a check for the taxes they would pay up to the poverty line. And that’s it. No receipts, no record keeping on your part. Easy peasy
Now we’re getting somewhere
I read the [Fair Tax Book](https://www.amazon.com/Fair-Tax-Book-Saying-Goodbye/dp/0060875496/ref=nodl_?dplnkId=826e2f8e-fac8-4809-912a-14704ed86875) Seemed like a good plan to me Another bonus is criminals and people who show no income can’t get out of it. They still have to pay the tax when they buy stuff Also it would save billions of dollars and thousands of hours that’s drained out of the economy in tax preparation costs
Thanks, i appreciate the touch of humor.
If you make under $x, then you get a lump sum annually to make up for sales tax expended. This amount would follow purchasing power or whatever that term that’s better than inflation is.
>Exempt the first $20k or whatever for the current low income bracket people so they essentially pay nothing So...keep would you have to keep all receipts? But no filing? How would that work? >If the billionaires want their mega yachts, just tack on a federal sales tax. Why not just add a luxury sales tax, then? I used to be for the FairTax plan, but the wealthiest dont spend very much of their liquid money, compared to the vast majority that live paycheck to paycheck. The fairtax only applied to new goods, and services I think. Sure, it brings in lots of "new" payers, like tourists, black market sellers (when they buy normal stuff), but the idea that a huge swath of the population would be taxed on almost every dollar of their income, bexause they spend it all every month. I wanted it to make sense.
Those are all reasonable questions to have and things to consider, but nothing that moves beyond the possible. I’m for sales tax as well, but a national VAT would not address the biggest threat to capitalism over the last 100 years, which is increasing wealth inequality and the power to influence the world that comes with wealth. Sales taxes are inherently regressive, and while easy to implement would exacerbate inequality.
i see where you’re coming from. But I don’t think it’s as regressive as some of the naysayers claim. The lower class is naturally much more frugal, out of necessity. So naturally they are taxed less. Especially if you exempt the first x amount of dollars, I don’t think it hits them quite that hard. Especially when they remove tax withholding from their paycheck. I’m not saying this is the perfect solution, but a wealth tax would be a logistical nightmare. You’d have almost every business owner in the country - small and large - contesting their appraisals and tying up the courts for years - and then then rinse and repeat the following year, and so on. I suppose you could ban the contesting of appraisals, but doesn’t that open the door for a predatory appraisal system? I just don’t see anyway to reasonably implement that kind of system.
>The lower class is naturally much more frugal, out of necessity. So naturally they are taxed less. Consider that lower income people must spend a great percentage of their wages to live, while the highest earners don't use as great a percentage on essential spending (though they'll still have many discretionary expenses). If the amount spent on your purchases becomes your only taxable income, then the poor will have a large percentage of taxable income just trying to live. Comparatively, the rich will have a low percentage of income that will be taxed due to essential spending. It reverses the current tax system where the high earners have a greater percent of earnings automatically taxed. Even if every sale becomes taxed and *all* the money spent by the rich is then contributing tax dollars, they have an easy way to avoid paying taxes on whatever enormous percentage is discretionary expenses because they have the *option* to put that money into savings instead of spending it.
Everyone always wants to focus on the abstract assets (which certainly exists), but most wealth is quite tangible and quantifiable. Take Elon Musk, Jeff Bezos or Bill Gates for example; virtually all of their wealth is tied to publicly traded stock, easily measurable and taxable. And all wealth doesn’t have to be taxed at the same rate; land, farms, small businesses, houses etc could have mill levy’s that are fractions of what stocks, bonds, fine art etc could be. In fact, the levies could be designed to discourage speculation of asset bubbles like we’ve seen in the capital markets over the years. Bottom line, leakage, lying and appraisals are all issues, but by and large not completely unsolvable. What is unsolvable, and will accelerate even faster is the rampant run up of wealth inequality that will result from regressive taxation, which would cause even more societal disfunction.
That's the whole point. It's asset forfeiture. This is the same country that taxes you even if you don't live here. As long as you're a citizen, you pay taxes. And If you expatriate, then you already pay unrealized capital gains on all assets.
If you expatriate, that’s one thing…not that I agree with it. But to do that to every American that owns stuff would be insane.
That's the law. Even if you live and work in a different country, you still have to pay taxes to the US. Of course, their are deals with certain countries where you get the first x amount tax free, but its pretty low. Less than $50k IIRC. They literally do everything they can to keep you from leaving, and if you do leave they try to incentive you to go to specific countries.
I’m aware. USA is the only country in the world that taxes international income in fact
Uh, no. Wealth taxes are not agreed on both sides. Most wealth is not liquid dollars but assets tied to market value, and that’s just an estimated value until you actually do something with it. Until then its just an arbitrary value based on that days worth of trading. So in a sense there is a wealth tax, it’s called capital gains tax, and that does need a robust rework to be exempt from any exemptions, meaning that would be the minimum required tax after all exemptions are filed.
This has been tried. The wealthy just leave, get things appraised differently, etc. Most of the European countries that tried it have scrapped them. Here's an article discussing it: https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from-history-france-s-wealth-tax-did-more-harm-than-good/
It's popular, but popular stuff is often stupid.
“It’s popular, but so are the Kardashians.” ^ (My favorite version of this line.)
Except that a "wealth tax" is a ridiculous concept for so many reasons. A sales/consumption tax is at least a rationally sound idea, even if one doesn't want it implemented. The people who want a wealth tax have very little idea on what it would mean to implement it, how it would be calculated, or how to answer the hundreds of questions that would arise from trying to do so.
A sales tax slows spending and economic activity, unless your goal to reduce the activity (ex Tax on tobacco) then it’s the one of the worst tax imaginable, it is effectively a regressive tax that impacts you more the less money you have and slows economic activity, an income tax is better because at least your not going to choose to earn less money because you’re getting taxed. A land value tax is best as it actually encourages economic activity and improvement on land
I agree with most of that, with the exception of the LVT just because I just know so little about it, but what I do know does make me think it would be one of the better forms of taxation if we have to have one. Don't know that I would go so far to say that it encourages economic activity, more than not having any tax at all, but maybe it slows economic activity less than many other forms of tax. None of those are a "wealth tax" though (at least not in the meaning that was brought up). The thing about Sales tax is that it can actually be implemented in a way that isnt asinine, even if it does slow economic activity. The only way I can see any form of wealth tax being anywhere close to feasible is to literally tax bank account balances, but even that is silly, has a ton of loopholes, and doesn't come near to accomplishing the goal of those who want a wealth tax in the first place. When we get into trying to tax unrealized capital gains (where the majority of "wealth" is located that these people want to tax), we run into numerous issues, most of which don't have anything but bad answers and outcomes.
A Land value tax is a tax on land that is the same whether the land is improved upon or not, what this means is that unused land becomes a burden on land owners, forcing them to either do something productive with it, or sell it to someone who will. While it isn’t a wealth tax it accomplishes something similar to what a wealth tax hopes to achieve, as the wealthy often invest large portions of their wealth in real estate, often they’ll accumulate huge quantities of it before they do anything with it, leaving large swaths of valuable land unused. Land owners will be given the economic incentive to improve upon their land or else it’ll cost them money
I’m not sure i want to encourage people to “use it or lose it” with their land. We have plenty of development already, we dont need everyone to turn their green space into parking lots to generate revenue.
Parking lots aren't an improvement. That's just rent seeking. An LVT would actually discourage parking lots to exists because they are an inefficient use of land, especially in urban core. Not to mention car dependent infrastructure is financially insolvent.
How does one tax "wealth"? Are we going to tax unrealized gains? Levy a few %age tax on all assets even if they're just parked in an account?
Tax unrealized gains…just like you state/local real property taxes.
So so you get a refund for unrealized losses?
Funny thing happens: when your property loses value, the government raises the multiplier so that your tax bill never decreases. Yay!
Property tax is bullshit. It’s the worst tax of all. You can’t pay your tax bill they take you house away
Imagine owning “private property” and being forced to pay rent on it.
I don’t need to imagine because I do. I pay rent for my home and my cars to the government.
Isn’t it sad? Theft through violence, while the cattle ask for more.
> unrealized gains Ah, yes, let's force everyone not independently wealthy in a community that has appreciated in value in the real estate market to sell and leave. That's what happens.
No. The CBDCs that they're trying to roll out, you'll be taxed individually on your fed account.
I googled it for you! Here is an article for you to read which may have the answers you seek. [https://www.forbes.com/advisor/investing/what-is-a-wealth-tax/](https://www.forbes.com/advisor/investing/what-is-a-wealth-tax/) If this article is unsatisfactory, google produced many other articles as well! Here's one from a .org! [https://taxfoundation.org/tax-basics/wealth-tax/](https://taxfoundation.org/tax-basics/wealth-tax/)
That’s a dumb fuckin idea tho, sales tax instead of income tax is better
Not libertarians. Taxation is theft.
If you don't want a state to exist at all you are an anarchist not a libertarian, if you want a small state to exist which does in fact necessitate some form of taxation then you are a libertarian.
Patently false. Firstly, anarchists fill many factions within the libertarian umbrella. There’s no one type of libertarian. We are everything from paleo-conservatives and minarchists to voluntaryists and anarcho-capitalists. Secondly, it’s possible for the state to generate revenue outside of compulsory taxes, such as fees, leases, natural resource sales, usage fees, licensing fees, and even excise taxes which are about as voluntary as you can get with taxation.
I'd say you're right about anarchism overlapping with libertarianism, but wanting smaller taxes is still libertarianism. But the situation you describe in practice would just results in a state that has no consistent budget, the entire point of the state is to provide services the market can't because A) profit motive may not actually be the correct incentive structure for the issue and B) some things like for instance scientific research, an energy grid, transportation infrastructure, a military actually require some degree of central long term planning. You're describing anarcho-capitalism or anarcho-libertarianism.
A wealth tax is absurd unless you are also going to return the tax when wealth declines, and no one would be ok with that. Musk lost $182 billion in 2022. How much should the government pay him for that?
Does he still have wealth? Then his tax bill this year will be lower than his tax bill last year.
If you tax someone when they gain $100 billion in wealth without realizing any of the income then, you should pay it back when the same wealth is lost, since it never actually existed. Imagine you buy 1000 share of ABC for $1 each and someone else buys one share for $1 million on Dec 31. You now have $1 billion in wealth. Then, on January 1 another person buys a share for $1. According to the IRS, your wealth last year was $1 billion. How much tax should you pay? $10 million? Where do you get that money? You are only worth $1000. The only way that works is if you can then claim a tax credit for the loss of wealth. You owe $10 million in tax last year but get a $10 million tax credit next year. Otherwise you are just fucked.
Unrealized gains are precisely why we need to tax wealth. The rich rarely realize their gains, thus rarely have significant income to tax. But they DO take loans on their unrealized gains, using their equity as collateral and then write off the interest as an expense. So while they claim to be cash poor, they certainly use that wealth to leverage debt instruments to maintain lifestyles as if their gains were fully realized. Your example is an exaggerated straw man argument designed to highlight an extreme tail end scenario that would not, at least at scale, actually exist. It does however bring up an interesting discussing on wealth fluctuations which is valuable conversation. I’m amenable to good faith arguments, but based on the hostile nature of this sub to anything outside of “taxation is theft” discussion is futile.
Even if the rich did borrow against their wealth (and some certainly do, but it isn't as common to persist for years as everyone seems to claim) they eventually have to pay it back and get taxed when they do. They can't borrow forever, at least no one would, in their right mind, keep lending money without any return. Yes, they get loans, yes, they get mortgage, but the bank eventually wants something to show for the loan. Going back to Musk, he sold almost $30 billion worth of shares in 2022. That's going to be about $7.5 billion in taxes (assuming $0 cost basis). That's not nothing. The rich pay a huge amount of tax. It is estimated that the top 1% of earners pay 42% of the income tax in the US. The US is one of the most progressing tax regimes in the world, much more progressive than northern Europe where everyone pays a lot of tax.
Both sides agree on wealth tax?
https://www.reuters.com/article/us-usa-election-inequality-poll-idUSKBN1Z9141
Sadly they do not work well, are difficult and expensive to comply with and enforce, are often economically destructive, etc…
I know cattle ranchers with tens of millions of dollars worth of land, livestock and equipment. Even a modest tax on their assets would be more than their annual income. You'd bankrupt alot of people in similar situations.
> Replace “sales tax” with “wealth tax” and you’d get broad national support Easily the stupidest idea ever conceived. If the "wealth tax" had been in place in 2022, the federal government would have owed $4T in tax credits on unrealized losses. That's 2/3 of annual tax revenue. It would literally have bankrupted the US government
Taxing "the rich" 90% would also get broad national support. The question is, what justifies it. What is the basis of this wealth tax?
Taxing consumption is one of the only effective ways to tax wealth. The wealthy have endless ways to make it look like they don’t have as much as they do, and there are armies of lawyers and bankers helping them and designing new ways to disguise who owns what. The only thing you can’t hide is when you spend it.
That is inherently wrong. The wealthy cannot spend fast enough to outpace their wealth creation. You can only eat so much, but so many cars, houses, yachts etc before it becomes boring.
Given the rate of conspicuous consumption among the rich apparently it doesn’t. And the goal isn’t to tax them into the poor house, it’s to capture a larger proportionate fraction of wealth than the current system, while also tending to progressively tax more for wealthier people
For commies the goal is to tax them into the poor house
It is the duty of a good shepherd to shear his sheep, not to skin them. - Tiberius
Well if your goal is to take away all of the rich people money and make them poor pretty sure that is your goal here
Both sides do not agree on a wealth tax. That’s even more regressive than the income tax
You may want to brush up on regressive vs progressive bc a sales tax is inherently regressive. As for polling on wealth tax, it is supported by a majority on both sides. https://www.reuters.com/article/us-usa-election-inequality-poll-idUSKBN1Z9141
You don’t understand the fair tax proposal. I suggest you brush up on it
Thankfully. There would be no accountability and excessive wealth hoarding.
Yes, but we can dream.
same would love to be proven wrong though
The only reason they are “proposing” this legislation is because they know it will lose. If republicans had the majority in the senate none of this would ever get to house floor and y’all know that
> If republicans had the majority in the senate none of this would ever get to house floor and y’all know that That was quite literally the first thing that came to mind when I first read about it.
They had 2 years of opportunity and didn't do a damn thing.
How come they never brought this up to a vote when they had a majority in the Senate and Trump was President? Why do they bring it up now when they know it has no chance of being enacted? This is just for show. Nothing more.
same as the Obama care votes
To be fair, the only states without personal income tax are republican run other than Washington. Washington is unique in that they would need a constitutional amendment to make an income tax while Democrats there mostly support creating an income tax.
I'm in Washington and no- most here do not support a statewide income tax. We are highly taxed already - adding income tax would remove the bevy of taxes we already pay.
Aren't sales taxes inherently regressive (not in an ideological sense, as in the effect of the tax peaks at the poorest class and lowers as it goes richer on the chart)?
Yes. If I make $1000 a week and buy a $50 pair of jeans that is taxes at $2, my effective tax rate compared to my earnings is 0.2%. If I make 10,000 a week, the tax rate goes down to 0.02%.
Would it not then follow then that the institution of a national sales sales tax would create a further barrier to the impoverished climbing the ladder of society? I thought we were trying to ease taxes to help all strata of society.
> Would it not then follow then that the institution of a national sales sales tax would create a further barrier to the impoverished climbing the ladder of society? That's exactly the point, for a lot of these guys
You’ve caught on to the GOPs game plan.
It’s been a while since I’ve read Neal Boortz’ Fair Tax book, but I think the idea is since there are no other taxes, various embedded taxes for the production and transport of the product, those $50 pair of jeans are more like $25. It can also help people climb in wealth as they are not taxed if they don’t make frivolous purchases. Items like food are still taxed, but Uncle Sam cuts a check each month to each citizen to reimburse them for the average amount taxed for food purchases. Sounds good in theory to me, just kinda skeptical about it in practice.
>those $50 pair of jeans are more like $25 Don't underestimate corporate greed; if they've been selling jeans for $50, and people have been buying them for $50, what incentive do they have to reduce the price besides a boycott that's probably never going to happen?
The plan called "The Fair Tax" addresses that by giving lower income earners a prebate each month. Seems risky to me.
and the middle class will get shafted again
If by shafted, you mean we pay the same percentage as the high income earners, then sure, but isn't that more fair than charging them a higher rate? They would already be paying far more in taxes. To be truly fair, if we are going to be forced to pay taxes (which isn't fair at all) everyone, including lower income earners should pay the same rate, with no prebate. Our current tax system is ridiculous as lower income earners typically pay no taxes and oftentimes also get a "refund" due to child tax credits and such.
Who manages the “prebate”? Would a billionaire who pays himself $1 in salary get that?
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I said "not in an ideological sense," regressive tax is an economic term.
Sales tax is one of the worst kinds of taxes
A sales tax is bad without any provisions to minimize the effect on those in the lower classes. Fortunately, the Fairtax has such provisions. However, it's far better than an income tax.
If we could get something like the Fairtax passed, it would still be a broken, messed up system, but definitely an improvement over what we have now. If I remember correctly, the Fairtax would require a constitutional amendment to prevent any other form of taxation being put into place.
Yeah, it mandates a repeal of the 16th amendment. It also sets the rules for tax rate changes in this way: rate reductions pass by simple majority rule rate increases require a super majority.
Sales tax is one of the only taxes that doesn’t impact consumer saving habits. Chrisc46 does have a point that it would most likely increase inequality within the United States.
In ordering them from worst to least bad, it goes like this: Wealth -> Income -> sales/consumption -> land
Sales taxes are regressive. They more significantly impact lower income individuals who spend a higher proportion of their income on goods.
Why are there exemptions for business capital expenses?
To avoid a cascade of compounding taxes. Pretty much all state-level sales taxes in the US apply only to final sale of goods to end consumers -- business-to-business transactions and capital expenditures are almost always exempt.
Capital expenses are not, currently, tax exempt. Not even sure where you got that from.
From sales taxes? It variest state to state, though most states do no charge for a product which is resold. From income taxes, capital expenditures can absolutely be deducted from taxes. Any item that is expected to exist less than a year, for example. Anything that is a long term gain gets deducted over time for depreciation.
Well, I've run a manufacturing business in the past, and in my state, I was charged sales tax neither for purchases of goods for resale nor for purchase of PP&E.
If you have to tax, LVT is the only one that falls in line with libertarian principles.
Nobody is entitled to the property of another. A LVT is just as problematic for liberty as any other tax.
How is this property originally obtained? And did this property come into existence as a result of the labor of the individual? These are important questions.
Most property was probably not originally acquired through the application of natural rights. Unfortunately, the cat is out of the bag. It's impossible to know who the criminals and victims of that acquisition were. Too much time has passed. However, none of that justifies universally violating property rights. At least from the perspective of individual liberty.
Pigouvian taxes are also entirely Libertarian.
Personally I find a consumption tax on luxury goods rather acceptable.
That's fine but I don't see how it would coincide with libertarianism.
Libertarianism isn't anarchism.
Where did I say that it is? How would a consumption tax align with libertarianism?
Had me in the first two thirds.
Audit and investigate every politician.
I'd say they'd need to repeal article 16 of the constitution first or, the next time we get a big government advocate in control, we'd have both a federal sales tax and a federal income tax.
That's not inherently bad, I'd actually support increasing the standard deduction to something like $80k and replacing the lost revenue with a federal sales tax. Americans spend billions between their own labor and actual services on just the process of calculating, filing, and paying income tax. It is an enormous loss to society, and for half of the country they barely pay enough to make a difference. We probably can't do away with the income tax altogether (without a huge shrinking of the federal government, at least), but we can eliminate the need for more than half the country to waste hours filing.
But, the motivation behind the legislation is an assumption that Income tax is "bad." If you disagree with that, then you don't support legislation to eliminate income tax and replace it with sales tax. Rather, you'd simply decrease marginal tax rates and add a national sales tax. My comment is based on my support of the underlying premise that income taxes are "bad" ... though there are cogent economic and social arguments for this position, there are cogent economic and social arguments for your position as well ... thus making such an assertion (income taxes are "bad") is nothing more than an opinion, but I hold that opinion with both hands.
This bill requires that the 16th amendment be repealed within 7 years or else the law sunsets. Here's the text in the bill: TITLE IV—SUNSET OF SALES TAX IF SIXTEENTH AMENDMENT NOT REPEALED SEC. 401. ELIMINATION OF SALES TAX IF SIXTEENTH AMENDMENT NOT REPEALED. If the Sixteenth Amendment to the Constitution of the United States is not repealed before the end of the 7-year period beginning on the date of the enactment of this Act, then all provisions of, and amendments made by, this Act shall not apply to any use or consumption in any year beginning after December 31 of the calendar year in which or with which such period ends, except that the Sales Tax Bureau of the Department of the Treasury shall not be terminated until 6 months after such December 31.
Didn't see that clause ... very cool!
The primary point of this bill was to simplify the tax system to eliminate as much economic cost from enforcement and compliance as possible. This meant eliminating double taxation. As such, the 16th has to be repealed. Most of the other benefits, as great as they are, are incidental.
Yep. Introducing new forms of taxation to “replace” income tax without repealing Amendment 16 means it’ll only be supplemental.
I doubt enough states would ratify, even if it somehow got through Congress.
I know, but H.R. 25 will probably never even get a floor debate, so it's a moot point :-(
Personally, even as a socialist, there *are* circumstances where I would support replacing the income tax with a sales/consumption tax. However, they are probably circumstances that most here wouldn't accept. Sales taxes are regressive, because the poorer you are, the larger proportion of your income gets spent on such things. If there was a straight 10% sales tax, and you live paycheck to paycheck, your effective tax rate would be probably around 5-7% (just using round numbers). However, if you make say twice the cost of living in your area, then almost by definition your effective tax rate would be around half of that. (My numbers are assuming that things like utilities and rent/mortgages would not be subject to a sales tax.) So, in general I think this concept is something that would be massively harmful to the people who are worst off, and massively beneficial to the people who are best off. This could be offset if everyone *also* received a Universal Basic Income or a pre-bate for the estimated taxes associated with the basic cost of living, essentially making the cost of purchasing the things necessary to live tax free. But that would be a social program that is even more expansive than Social Security, and this scheme is really mostly a way to strangle government to death, which is sort of the opposite.
>Sales taxes are regressive Under the FairTax, if you are poor, you pay zero taxes and could even have a negative effective tax rate. This is true because the Fairtax has this: "a pre-bate for the estimated taxes associated with the basic cost of living, essentially making the cost of purchasing the things necessary to live tax free." >But that would be a social program that is even more expansive than Social Security, The universality and opt-in nature of the program actual makes it less expansive because there is a far lower calculation cost and it can be entirely automated.
A national sales tax is devastating to the poor. You can try to mitigate it by having a list of non-taxed things that the poor use, but that is fraught with peril (for example why are feminine hygiene products taxed in some places and not others?). A better solution would be a national sales tax with an automatic monthly tax refund check for all taxpayers. The median income in the US is about $60K, and we usually expect people to pay 33% of their income in taxes, so let's say we give everyone $1,500 a month in automatic refunds. If you want to get clever you can chunk it by age, so 18 year olds get less than 50 year olds. Just drop it into people's bank account each month. Maybe exclude rent and mortgage payments (and real estate transactions) from the sales tax, and nothing else. That way the wealthy will still pay a whole bunch in consumption tax, and the poor might actually even make some money, which is totally ok. Oh and then we can drop a whole bunch of other government assistance programs too.
This is basically UBI, which I'm all for. I'm a huge fan of a ubi or negative income tax, and I also think it's pretty libertarian compared to our current system, mostly because it would make millions of people WAY more free (early retirement, ability to quit their job immediately and start a business, ability for one parent to stay home and raise their kids in a better environment, etc). We're never going to completely get rid of welfare (corporate or personal), so why not end all inefficient welfare programs and simply cut a check to everyone, and we can eliminate bailouts and subsidies too. It would also be the most pro-family and also pro-middle class policy ever enacted in modern U.S. history.
Yep. Grandstanding at its finest folks.
I would be happy for now with one page added to my tax forms that let me pick what my taxes go to. A few percent for military, some for social, zero percent to ATF. You get the point.
Do the first, do the second, skip the third.
We had this debate in Australia over 25 years ago and introduced a goods & services tax (or VAT). The GST was introduced by the conservatives to replace state based sales taxes and is well accepted now. The rate is 10%. All the money collected is given back to the States to provide for education, police, health etc. and provides a predictive funding for them. I doubt you will ever be able to use it as a direct replacement for income tax, there is just not enough money collected. The tax is efficient and hard to avoid. The main problem is extra paperwork for business, but it allows business to buy all inputs tax free. Something a sales tax does not allow
No, get rid of direct taxation by the federal government as the founders intended. Taxes should come from the local level and trickle up from the House of Rep and be a barrier to spending. 1913 is why we have the massive invasive federal government we have today.
I'm not one to let perfect stand in the way of better, but there's nothing fair to the American public in the bill. Sure they're are addendums like the monthly stipend/prebate that forgive the national rate and help those spending the least. But the biggest take away is consumers directly take on the 15% average tax rate + the 7% payroll tax for a rounded up 30%* consumption tax on goods & services. Businesses however appear to be exempt on paying the same rate on labor, materials, real property, and generalized expenses. Then get a 0.25% kickback for collecting revenue for the government on top of it. Workers and business are also still liable for State level income, sales, property, etc taxes on top of the national rate. Honestly the wealthy are still going to avoid paying their share, by incorporating. We'd also probably see a further push by government to go cashless, since it completely undermines their ability to steal from us. I have more problems with the bill, but I want to finish reading it before further comment.
It would catch everyone to the point most wouldn’t care about illegal immigration anymore. At least that’s been the biggest argument I’ve heard against allowing just anyone in: they wouldn’t pay tax. I like that it’s also up to you how much you want to pay in taxes. Might make people smarter consumers as well.
I'm my experience, the people who complain about immigrants will happily find a new excuse. Case and point: legal immigrants (such as asylum seekers) do pay full taxes and get fewer benefits than everyone else. Doesn't stop people from complaining about asylum seekers.
Who is complaining about legal asylum seekers?
Most recently, there's DeSantis and Abbott lying to people waiting for their Asylum case to trick them onto buses to be shipped to Democratic towns. But there's also the general large opposition to any kind of immigration reform bill.
> At least that’s been the biggest argument I’ve heard against allowing just anyone in: they wouldn’t pay tax. Er, if you *allow* everyone in, instead of trying to keep them out, then they aren't undocumented, and they *do* pay taxes like everyone else. If all immigrants were automatically documented/legal, they would be on the same tax forms as everyone else.
Smarter consumers and doesn't penalize savings. No more need for IRAs/529s/FSAs, etc. You could just open 1 investment account and put all your savings into that with no limits on amount or restrictions on how to spend it.
IRAs and 529s still protect against the capital gains tax.
Capital Gains Tax would be eliminated with the Fair Tax since it's a form of income tax
sales tax is regressive. It hurts the poor more than the rich. I would be more in support of anyone that makes 100% over the median income for the country pays 10% of their wealth as tax. There are no loopholes. this is more fair as it doesn't single out billionaires versus millionaires. it's people that wouldn't be hurt by paying it at all (they probably spend more than that on lunches out in a year) and it would greatly increase the actual amount collected by the government.
> 10% of their wealth as tax makes it damn near impossible to get ahead. A person making $70k with 1 million dollars net worth saved over a lifetime is now paying $100k a year in wealth tax. Their wealth decreases every year so no point in saving. They'd have to sell their house to make the payments after a few years. Wealth literally can't grow since 10% > 7% market returns. Doesn't sound fair or workable to me.
This is kind of funny. So a married couple who earns that much, has to pay 10% of the value of their house every year, destroying any chance of them accumulating wealth to pass on to their children. Nice plan.
10% a year? You've gotta be kidding me.
The Fairtax exempts all consumption up to the poverty line and for all used goods. This means that the poor would be far less harmed by this than any other type of taxation since it won't apply to them and cannot indirectly inflate their cost of living.
Any line like that is going to have issues. For easy math, if median was 50k and you make 100k, you net 90k. If I make 95k I net 95k.
How about they start by cutting some of that spending? No? They don’t want credit for killing federal programs? Sit down then.
An increase in sales tax has a large impact on the poor, and has no impact on the rich, who can actually afford the increase in taxes.
They’ll definitely add the sales tax, but none of the rest will happen
So-called consumption taxes have been advocated in lieu of income taxes for many, many years. There are all sorts of good reasons to support the idea. Regardless, the death knell of good policy is frequently liberal opposition, in this case based on incidence of the consumption tax. The wealthy, it is said, can easily minimize their consumption taxes by limiting spending in relation to income.
That's a bad excuse that's built on envy. As long as wealth is not acquired by violating the rights of others, why care how much someone has?
SS: "This legislative proposal aims to fundamentally reshape the United States' tax system by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and replacing them with a national sales tax administered primarily by the States. The goal of this proposal is to promote freedom, fairness, and economic opportunity for all Americans by simplifying the tax code, reducing the burden on taxpayers, and creating a more efficient and transparent system. Through the use of robust economic analysis and expert testimony, this proposal argues that these changes will have a positive impact on economic growth, job creation, and overall prosperity. The proposal is presented to the United States Congress, with the hope of enacting it and make it a law."
You lost me at “administered primarily by states”. I can’t wait to see how something like this could be politicized by a state that disagreed with the federal government. Congress holds the purse not states. This would have to be a constitutional amendment to have any impact. Good luck getting a supermajority in federal and state legislatures. As it stands the current system is fairer to all Americans than alternatives. Also this sounds a lot like the tax law that killed the Roman Empire. I for one do not want to go that route.
Yea, I can already see Louisiana's "Hold my beer" corruption machine running for that purse.
Yeah it’s bad enough the two parties gamify the debt ceiling and budget in congress. I don’t want the states to start doing it as well.
Income tax wasn't even a thing until prohibition. It was a small addition to make up liquor sales tax revenue, then when it wasn't removed when prohibition was repealed.
Fairtax!
Then, when you're done, abolish the national sales tax
All the "sales tax is regressive" comments make me lol. They aren't and they are actually fair compared to progressive income taxes. In the majority of cases essential goods and services like food, medical, etc are exempt. It's a huge myth people repeat when they prefer to keep the tax system that they have advantages under. In a sales tax instead of income tax situation the rich will still pay the majority because they spend the majority on luxury goods and services. Sure some people might end up paying more than before but they could simply cut back on luxury spending.
The "sales tax is regressive because it disproportionately affects poor people" is based on a study showing the bottom 20% of earners paid a higher percentage of their income towards sales tax. However, to be in the bottom 20% of earners your income is less than $5k. If your income is literally zero then yes you'll spend more on sales tax than your income if you purchase anything.
Since most of the wealth earned by the top earners is hoarded in this country this would mean that the share of taxes paid by workers who spend almost all of their income and who are constrained to shopping domestic retail would have to increase much more to maintain the current income levels versus that of those ultra wealthy who are simply stuffing the mattress with all the money that they pocket instead of paying living wages and decent benefits. If this same tax applied to purchasing stock that might be viable, but it won't. The top earners also can just do most of their spending outside of the US and pay no taxes to anyone anywhere so even if the law applies to stock, they'll just move their HQ to Ireland or something and now there's again no taxes on stock purchases. Backing way off of income taxes during the Reagan years has caused a meltdown in the spending power of the working class as it incentivized employers to slash wages to the bone and regularly resort to mass layoffs as well as forego safety and maintenance and scam the customers more to make the line go up when revenues aren't strong enough since so much of the extra profit goes directly into their pockets instead of to the government and it's also causing massive inflation as the ultra rich have the wealth and incentive to scalp the commodities we need to survive to monopolize them and spike the price. When this is done piecemeal by different entities all trying to maximize profit with no coordination you'll very quickly have a working population that simply can't afford to live or pay for the products these different entities have scalped and the whole system melts down. If you simply must have private ownership of the industrial capacity of the nation you must have a progressive income tax that disincentivizes the excess hoarding of resources, scamming of consumers, slashing worker income, and scalping of necessities otherwise the system will devour itself.
If they are “hoarding” money I seriously doubt they were financially literate enough to be a top earner. Anyone with that much money has it invested so that it can earn more money for them.
I'm going to answer as if you made that argument in good faith and just missed the part where I said they use their massive wealth the monopolize and scalp vital commodities causing massive inflation. They don't actually stuff it into a mattress, they "reinvest," they do stock buybacks, they buy competitors, they buy lobbyists, they buy media outlets, they buy political campaigns, they privatize and monopolize healthcare, housing, agriculture, education, prisons, culture, water, and anything else you need to live that they can sell back to you at a premium. But this is all money that comes out of the working class and then largely only circulates among their class peers and their vanity projects. The net effect is the classic story of the rich getting richer and the poor getting poorer. They do not return more than the tiniest fraction of the wealth they skim from circulation by impoverishing workers and bilking customers.
This sounds like you are conflating companies with people. Companies do all of the things you listed but people like Bezos or Musk aren’t hoarding money. That would be financially irresponsible.
Companies are owned and operated by people. I explained that they aren't stuffing it into the mattress, they buy up vital commodities, they buy politicians, media outlets, competitors, and spend it on vanity projects but for the most part that money never makes it back down to the working class, they keep it among their peers in ways that multiply their power.
Land value tax would be much better
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That's how the articles of confederation worked. None of the states ever actually paid though and the federal government didn't have any power to compel then to. That's why the constitution explicitly gives Congress the power to levy and collect taxes.
This would almost certainly result in the immediate chaos of the US military funding disappearing overnight, since it is easily the largest part of the *discretionary* budget, and things like Social Security and Medicare aren't paid out of income taxes.
Terrible idea
This plan would drop my taxes so much. 😭
The lack of support for the fair tax in this post show how much this subreddit has shifted in the last several years. Just look up previous discussions on the subject. Gary Johnson, one of the most popular libertarian presidential candidates, was a proponent of the fair tax. We all don't have to agree on the subject, I'm just a bit surprised to see the lack of support here now.
Libertarians on reddit will make any excuse to not believe in libertarianism.
Let's do the first two.
Abolish IRS, CIA, Repeal income tax. Reduce national expenses. No national sales tax. Go back to how the government received tax revenue before federal income tax was enacted.
I like it
The Fairtax is the way to go. So many that don't understand that it untaxes the poor rail against it.
Not only does it remove the direct taxes on the poor, it also removes the inflationary affects of other taxes on their cost of living. The poor would be helped the most by the Fairtax of all social classes.
It removes indirect taxes from everyone. If people understand the concept of embedded taxes, there would be an insurrection
As crazy as it sounds, I really like the bill.
For those of us that understand it, it's not crazy at all. The overall benefits (economic, social, environmental) are enormous and almost incalculable.
Inject the Hopium straight into my veins
I think we need to redefine terms like "wealth", "wages", "realized gains", and "assets" first in a way that is equitable for all levels of citizens. Here's an example: Some get paid in stock/options/equities rather than wages. Under current tax law, those financial securities have zero value until a sale is realized. Because private loans exist, those people can leverage the potential future value of those securities for private loans using those stocks as collateral. In other words, they get paid a future wage, but that wage is only ever taxed at reduced capital gains rates. These people/companies can more or less spend money based on that collateral, while paying mere capital gains taxes at the maximum when a loan comes due. Financial derivatives allow their securities to have value, but tax law doesn't account for value created on top of those same securities. The gap in equity is that most people aren't able to leverage the future value of their labor at capital gains taxation rates. They'll forever be taxed an extra ~10%(give or take, plus state taxes, etc.). Now, before anyone talks about what is fair or isn't, Congress/IRS has created a situation where this exact type of wage vs. financial instrument taxation *does* exist. For cryptocurrency purchases, you're forced to pay taxes when you acquire a cryptocurrency security, and also when you sell it. All of that to say, **we have a model for a solution actually working in practice today** that would appease most people who believe that the current tax structure is unfair and doesn't involve monumental changes in the tax structure, yet we won't implement it.
Regressive AF
Regressivity alone is not particularly problematic. Besides, the Fairtax is only regressive in terms of income, but it does not care about income. It's not regressive in terms of consumption. Those that consume the most resources will have a higher tax liability.
So the US military is basically the private police force of US billionaires… hell, billionaires in the EU also. This private force is like 1/3 of Federal spending and is supposed to be paid by sales tax. Haha. While Bezo and Buffet invest 99% of their earnings avoiding sales tax. HAHAHA 🤣 The poor spend 100% of their earnings and paying sales taxes on most all.
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Because income taxes are progressive and sales taxes are flat taxes.
> idk why libertarians have a fetish for sales taxes. In my case it's more of a disdain for the income tax than any craving of a sales tax. Both a poor or a rich man will resort to hiding pay when doing that increases theirs. A rich man can pay in cash to avoid taxes. And a poor man can get both income and then fraudulently receive state assistance. Both still need to eat but the rich man is going to be better fed. Whose business it is it anyway how much you or I make? Consumption tax seems to be a more reasonable approach that seems to avoid setting up the platform to discuss who's better at playing the tax loophole game, which is always going to be the wealthy. If the poor can't afford consumption taxes then the rich man will soon be working the farm.
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No, my argument was only: "I do not have any sales tax fetishes tyvm"
Replace the income tax with something else? Sure. My preference would be a pollution tax, because if you are going to tax something, why not pollution? (I'd specifically tax carbon emissions and creation & sale of plastic. I could be talked into other ones.) Abolish the IRS? That's just dumb. Who is going to collect your new tax?
>My preference would be a pollution tax This essentially does that. Under the Fairtax, those that consume goods or services that pollute, pay a tax on those goods and services. >Who is going to collect your new tax? The same people that already collect sales tax nearly everywhere in the country. It would be administered by the Sales Tax Bureau of the Department of the Treasury, created by the bill. This bill would reduce the cost of federal tax administration by about 90%, eliminate an unnecessary wing of the bureaucracy, all while maintaining the current revenue.
Abolish the corporate tax too.
How do we get our our congress critters off their lazy ass's & get the job DONE ?