Originally posted by Baptist in Richmond:
Yes, this is a reiteration of your prior statement. Once again, that is not all that happens. The "influx of money" also produces something else.
Well, then enlighten us as to what you think will happen.
Yes fairer, because everyone will be taxed at the same rate. Right now, the rich pay a disproportionate share of income taxes. In a fair system, everyone pays the same. WE can debate whether or not that is the right way, but it is certainly a more fair way.
It is also fairer in that you are taxed only on what you spend, not on what you make. So if someone doesn't want to pay taxes, they don't have to. They can save their money, which in the long run is a boost to the economy.
Again, it is not an instant raise. The tax is still collected, the only difference is that it is paid on everything you purchase, rather than simply being withheld from your check. That "raise" will be offset by the taxes you will now be paying on every transaction you make.
Most people judge a "raise" by whether or not their take home pay goes up. They don't consider it not a raise because the ARM went up at the same time and took all the extra money. Nor do they consider "not a raise" if they take that extra money and go buy a new car with it. It is still a raise because take home pay went up. In this, the take home pay goes up.
Most sales tax plans do not charge tax on everything that is purchased. There is usually, to my knowledge, an exemption for certain things like basic living necessities. How all that works out in the end is yet to be seen (if it is ever seen).
But the fact that take home pay goes up means it is a de facto raise.
So, instead of paying a graduated tax scale, everyone will get taxed at the same percentage? That is fair? What about low-income Americans? Many of them are not currently paying the same percentage of their income as they would under a national sales tax.
Yes they will pay the same percentage. Yes that is fair. The rich will still pay more in taxes because they spend more. But they will not be punished just because they went out and made money. Many plans exempt the first X number of dollars in the form of rebates or some such, thereby meaning low income Americans are helped.
I would say that they will be forced to pay a tax on every purchase. To what degree can that be controlled? I hope you aren't suggesting that a cutback in consumption is a valid way to control income taxes.
As I say, many plans exempt some things. But yes, cut back on consumption is a way to control taxes. Right now, I cut back on my airline travel consumption because I don't want to pay the high taxes involved in it. I cut back on my gas consumption for the same reason. When I eat out, I don't order the most expensive thing on the menu because I cannot afford it. We all control consumpetion for the sake of money. It is no different just because we call it a tax.
Again, people do in fact realize this if they look at their pay stubs.
I think the reality of writing a check and putting it in the mail is a lot different than seeing some numbers. I know the numbers are there, but never seeing the money makes it different I think. I think that is one reason why credit debt it so high ... People just don't see the money they are spending. If you had to put down a cash deposit to use your credit card, credit spending habits would change in a hurry, I think.
By the way, how will this not translate into more taxes? A national sales tax will be paid on every single transaction at the point of sale.
Already answered several times. First, all transactions will probably not be taxed. Second, the money that you will pay that tax with will come home in your check. Third, quit buying stuff.