Bush Says National Sales Tax Worth Considering (drop income taxes)

http://story.news.yahoo.com/news?tmpl=story&cid=584&ncid=584&e=8&u=/nm/20040811/pl_nm/campaign_bush_taxes_dc

President Bush said on Tuesday that abolishing the U.S. income tax system and replacing it with a national sales tax was an idea worth considering.

"It's an interesting idea," Bush told an "Ask President Bush" campaign forum here. "You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously."

Republican economists who speak regularly to the White House have said that the Bush campaign has been mulling the idea of an overhaul of the tax code as part of an agenda for a second term should Bush win reelection.

Some lawmakers have floated ideas of simplifying the tax code by putting in place a "flat" income tax rate or a national sales tax. But those ideas have so far not gained much traction in Congress. Opponents say such a system would not be in the best interests of the poor and the middle class who would pay the same tax rate as the wealthy even though they have less disposable income.
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Of course, it was all horseflop, merely intended to sway voters.

And so it is with *'s public mulling about blitzing the IRS -- just fodder for the hopeful sheep.

I don't think it's wise to discount *anything* of this maladministration.

Kanary

This is exactly the sort of thing the Republicans will be pushing for, but more importantly, it's exactly the kind of thing that gives Democrats ammunition. That Bush is for regressive taxation (he probably couldn't pronounce the phrase, but the idea would certainly appeal to him) is pretty cool, in my book, because he should be beaten over the head with it. Those 527s should go to work on this; I can imagine the ads now. I think there's a vague sense that Bush is an enemy of the middle class; issues like a flat tax would crystalize that sense.

One way or another, I'm certain Bush will be good for the Democratic party before he's through, and supporting a flat tax is the sort of thing that will remind people who really is on their side.

this plan is a wet-dream of the current speaker of the house and many other RWers as well. If they keep the presidency and majorities in both houses--I have confidence that they will at least TRY to do this.

What a disaster---this would take us back to about 1912. I guess * wants to speed up the death of the middle class and division of all Americans into have's vs have not's.

We have to be very vocally against this--it is a terrible proposal--and YES I have lots of fear that he WOULD try to do it.

Now *there's* an understatement to start the day.....

Kanary

A sales tax is regressive unless all food, clothing, medicine, utilities, basics of life, etc. are not taxed

Our current system allows for a bit of social engineering - which in my opinion is a good thing. If we put in place a combination of a VAT and an income/capital gains tax above a certain amount, say 200,000 it may be something to consider. Just dropping the income tax and going with a VAT would kill tax credits to the poor and essentially devestate lower income families.

Of course that is what Bush wants. Bush's ideal is to make labor super-cheap in the US. The idea of paying someone $5 a day to work is very appealing to Bushistas.

There is no VAT on food necessities, medicines or books/newspapers.
So the "screws the poor" argument is bunk. If you're poor, your
spending will mostly be on non VAT items.

It is brilliant in that it jettesons the leech profession of tax
accountants and tax courts and tax prisons and tax bullshit that
surrounds the uber-complex tax code, for a simple, clean system
that charges people who have money.

Compliance is much simpler allowing the federals to fire 90% of the
IRS and cut costs.

I think people don't like the idea because bush said it. Gimme a
break. As long as the proper exemptions are in for necessities, it
is extremely progressive.

... and sadly many here are not progressive at all.

compared to purchases made by big corporations and their CEOs?

I seriously suspect company spending will be exempt of this.

national sales tax is the worst idea ever

Some may not know this but the IRS infrastructure has been understaffed and over worked due to budgetary actions. This scenario along with the fact that are many more Americans who are not paying their taxes and taxes owed has maybe, directed this criminal administration into this concept of abolishing the IRS?
Paying taxes to an illegitimate government maybe a crime of compliance. Especially when this vile, odious machine has shown no inclination of representation to it's populace.

"who would pay the same tax rate as the wealthy even though they have less disposable income"

When all taxes were considered, the system we have now (or HAD, before the Chim-Chim in Chief monkeyed around with it) is roughly flat. A "flat" tax will actually throw more of the burden on the poor and middle class.

(although the poor in our society are always my number one concern)--what about all the people who would be thrown out of work?

IRS hires a lot of people, also what about all the tax lawyers, CPA's preparers etc who work privately or for companies or for state agencies? There are thousands of people who would be out of work INSTANTLY---swelling the ranks of the poor--at the same time that the services to them were cut.

And these are highly educated professionals for the most part--are they going to have to start from square one?

Fiscal year 2005 begins in October. According to http://www.neatideas.com/gdp.htm The GDP will be about 10,469. According to http://www.mindfully.org/Reform/200...ficit2feb04.htm The U.S. will start spending 2.4 trillion dollars in fiscal year 2005. 2,400 / 10,469 = 0.22924. Move the decimal place and you have 22.924%. You need to tax 22.924% of the GDP.

So let's say someone earns $10 an hour. 10 x 40 x 52 = 20800. Now the American government takes in about 23% of it's GDP on taxes. So that means the person is left with $16,015 dollars.

On a $100,000 house you would probably end up paying $750 a month, or $9,000 a year. If your lucky you may find an appartment to rent for $7200 a year. I'll use the rent figure. If you use the house one, don't forget to include utilities. (water, electricity, gas, etc...)

Food is about $40 a week, or $2,000 a year.

How much we have now, $6815?

Now we have a car we need to find a car. You may find a cheap one for $3,000, but it will probably have 150,000-200,000 miles on it. Who knows how beat down it is. You can find a decent used car for $8,000 and it may only have 20k - 30k miles on it. That would be about $200 a month, or about $2,400 a year. Ad another $80 a month for gas, and you get about $1,000 a year.

Now your down to $3415.

I'm not sure how much auto insurance cost, i haven't paid attention to mine lately. Lets pull $100 a month, and say $1,200 a year.

Now your down to $2,215.

You need health insurance too. This is perhaps $300 a month. That is about $3,600 a year.

This person would not be able to pay for health insurance. They would be in trouble if they needed any healthcare that is more than $2,215.

Okay, now lets take a look at the current tax rate. You are in the $7,001 - $28,400 bracket so base tax of $700, plus .15 x the amount over $7,000. That is about $3,715 compared to a flat tax of $4,785.

A poor person's takes would be raised by $1,070 on a flat tax. It would probably be similar on a sales tax but could depend on how they tax food and rent, etc...

Curiously, it would do away with taxing all those dreary capital gains, and confusing forms of income that rich folk dabble in. Let's just simplify it. Joe Sixpack: Take it in the shorts, as you tend to spend every penny you earn. Joe Millionaire: You'll need your own bank to hold all the money that will come rolling in tax free, without the annoyance of wondering whether the IRS will ever catch up to your financial shenanigans.

Brilliant.

not a vat tax or flat tax. All three have been used in this thread interchangable. they are not the same.

A national sales tax will tax the people that spend the most. thats it. exempting all food (not resturaunte) and drugs is fine. exempting utilities up to maybe $500 per month, sounds good. After that you buy something you pay a tax. Also a tax rebate given to an income of less than $$$? could be initieated, to help the poor with big purchases that we all make every year, frig, lanmower, gargage disposal, TV, etc. At the same time things like capitol gains and deprecieation schedules are gone. Yes we eliminate the Accounting industry and the enforcement industry is gone. Thats a bad thing?

All that said, our legislative branch will never give up their true power. Granting tax breaks to their croonies, who ever that may be.

I fully understand what's being proposed here. Curiously, all the "exemptions" and "rebates" you mention didn't get mentioned in the original story somehow. I can't imagine why.

But it will surely get worked out eventually. Somehow, though, given the track record of the controlling interests in DC, I don't see it working out to favor the poor over the rich. There's approximately one program that works that way now, and even as poorly as social security "favors" the less well-off, that's far too much for the monied interests, which are doing their damnedest to curtail even that tiny bit.

Social security favors the poor. Whoo Haa That is something huh.? Social Security maxes out at somewhere about $85,000 gross income. so those 'rich' people that should pay more, don't. No matter how much the rich make they only pay a maximum amount of tax, based on $85,000 income. Rich people that are self employed pay the entire 15% of income. Poor people that work for a check pay only 1/2 that, no wait, even poor people pay it ALL, the employer just adjust the wages to cover the cost of SS and Health insurance.

Oh and that SS money invested anywhere would garner a larger monthly check the SS does today.

Ending the incredible overheads of the existing tax system that costs
a bundle to process the mess of exemptions that already benefits
the rich who can afford tax advise.

Imagine the cost savings of eliminating the unconstitutional tax
court system, the unconstitutional IRS and the entire enforcement
apparattus, for a VAT tax.

To enjoy your wealth, you need to spend it. WHen you spend it, you
get hit outside of necessities. VAT is not charged on food, medicine
and books/newspapers as implemented in europe. Under such a system,
the poor and working classes are not "extra" charged, and the
whole line of chatter in this thread is deliberately sinking
the idea because it was repeated by bush's teleprompter.

It has long been suggested by economists as an intelligent way to
increase tax revenue from those who spend above and beyond necesseties, and in this regard, it is very very fair. When you buy
a 100K car, the tax is 17K. A 10 million dollar airplane will
have a VAT of 1.7 million. Today, rich people avoid paying taxes,
yet own airplanes and such. This universally guarantees that people
will be taxed.

It also reverses a terrible problem for americans, the declining
savings rate, where there will, under such a system, be no tax on
earning money and saving it... this should increase the hole in the
coming times where people having nothing for retirement.

If the GOP designs it, that sales tax will apply to all the necessities of life but NOT to stock or bond purchases.

A national sales tax can be made progressive if food, primary residence, medical care and basic clothing are exempted, which is how the left would design it.

A 17% sales tax the GOP would design would fall most heavily on the poor, the working class, and the middle class, but exempt the major purchases of the wealthy leisure class. They think this is fair. I think this is wrong.

And that is why I post at DU, not the freeper boards.

Stuff such as new Yachts or buildings or property or even new Cars for that matter. With our municipal tax there is a limit. Any purchase over three thousand dollars is not taxed.

when everyone thought that taxing the yachts, and airplanes of the rich desimated the boat industry on the east coast and the small plane industry in serveral states including Kansas, and California. The rich people just went to the rest of the world to buy their toys, leaving american craftsmen out of work.

A better way would be to tax property other than a basic family home. All commercial real estate, vacation homes, second homes and mansions should be taxed. But then that would target the rich and not the poor.

What an unrepublican idea. Warren Buffet suggested this to Ahnold to fix the California budget crisis. You could hear rich California Republicans choking from the mountains to the sea.

Shout it from the hills

/from my hill

Not to mention that sales taxes are regressive, and the whole things is just a bad idea.

but the neos are into regressive taxation and they are too stupid and narrow minded to consider the almost certain drop in consumer demand (or more properly, perhaps, the growth in demand) that a federal sales tax would cause, at least in the short term. And, of course, that there might be ripple effects would simply be beyond their comprehension and imagination.

With an increase in the growth of demand coming in the months before such a tax was implemented (since people would buy stuff while it was "cheaper"), followed by a drop in (the growth of, at least) demand occurring when it was, serious economic consequences might be anticipated. (Should consumers react truly stupidly to the coming tax, and take on debt to buy recklessly before it took effect, then this could also have a negative effect on demand, and in a longer term.)

When you consider that the Bush tax cuts are always "top heavy", then it might also be expected that the average taxpayer and particularly the poor (who "turn" their money very quickly) will probably get less of an income tax break than they spend on the new federal tax, a long term decrease in, at least, the rise in demand is to be anticipated.

Giving Bush$Co's past performance in these things, it can also be expected that there would be deficit considerations also, and these might be serious. And, of course, with a federal sales tax, these fools would have a new "weapon" in their arsenal and they could be expected to use it stupidly, perhaps raising the federal sales tax rapidly and driving this nation into economic ruin.

...Ruin, it's what they do best.

In the late 1980s/early 1990s a series of major tax reforms was introduced in Canada. It was (allegedly) revenue neutral, and consisted of:

1. Lower income tax rates.
2. Reduction in numer of tax brackets from seven to three.
3. Deductions for dependents replaced with credits.
4. The hidden 9% federal sales tax, imposed at the manufacturing/import level, replaced with a 7% GST (a VAT at the retail level).

The fury over the GST pretty much ended Mulroney's career. Jean Chrétien won a landslide victory in the 1993 by promising to abolish the GST, a tax that we still pay today. If the Republicans are serious about trying a move like that they can forget about any shot at winning now.

have lived in the British Isles--I grew accustomed to the VAT and adjusted my spending patterns accordingly. I do not think that the VAT has hurt the European economy--and they have been using it for some time.

My problem is with abolishing the IRS. I support having an extremely progressive tax system--yes--I do believe in wealth redistribution. Very plain and simple--a VAT is OK for raising revenue, but it does not accomplish the goal of taking $$$ from the rich and putting them in the hands of the poor. I (like Robin Hood) believe that this should be a goal of society.

A VAT would be OK if it were imposed on TOP of our present taxes--and the money sent to needy people all over the world. A VAT is completely unacceptable if it is proposed as an alternative to our current tax system.

And don't even get me started on estate taxes! You cannot take it with you when you go--and you should NOT be able to pass accumulated wealth through the generations. To even consider doing this is the height of selfishness.

If Americans peacefully submit to such a change, I will leave this country for good.

world peace would exist without any danger of attack or invasion, no military would be needed because wars would end, doctors would provide treatment and health advice as a public service..not for more money, people would merely trade and donate basic necessities to each other without any government currencies, no prisons or police would be necessary because no crimes would be committed, no CIA would be necessary because people would not equate religion with morality, no school would be necessary because every person would be a teacher, no gun laws would be needed because no one would own guns, no corporations would exist because greed would no longer exist, and no hospitals would be needed because every disease would be cured.

In the end we would only do things for life, liberty, and the benefit of each other.