In order to make a fair tax system, Sales taxes should be raised to 20% Plus. (expenses, borrowing)
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The entire point of raising the sales tax is to eliminate or ease the tax burden of income and property taxes. When everyone has to pay there fair share, like illegal immigrates who benefit from but to not contribute to communities, the overall tax burden will be reduced for everyone. It's estimated that illegal immigrates cost taxpayers over 100 billion dollars a year. Arizona estimates that illegal immigrates cost the state between 1.3 to 2.5 billion dollars a year in costs of incarcerating and educating illegal immigrants and their families. Multiply that by 50 states and you'll get a sense of the scope of the problem at hand.
I really don't think increasing the sales tax rate will lead to the massive unemployment or a radical reduction in commercial consumption. When you understand that your not paying state income taxes on wages or your property taxes will be much lower, possibly eliminated, your just shifting the taxes from one area to another.
Illegals don't buy anything? Don't they buy food to feed there family? Buy Clothes? Entertainment? They pretty much buy everything you do, except they do not pay there fair share to support communities as the rest of do.
It's estimated that illegal immigrates are 5% of the United States economy, so logically taxing them would enable the government to reduce taxes by 5% for the rest of us that DO pay taxes.
Even IF your bolded quote is accurate, taxes for the rest of us would be reduced only 0.0526% (5% savings divided by the other 95% of the population). For someone who paid $8000/year in taxes, that savings would be $4.20.
If all other taxes were eliminated a national sales tax might work. It would need to have the appropriate exemptions though on things like, food, clothing, and medicine, to name a few. A national sales tax would also stop the state vs state competition for businesses to relocate. NY state is advertising 10 yrs no corp income tax currently (I do not know the details.)
One problem I see with a national sales tax though is since it only taxes consumption, the rich will just continue to get richer. They do not need to spend money and in some cases they can probably avoid the tax by purchasing outside the USA.
The problem with these debates is that it's completely pointless to talk about eliminating/replacing taxes without address cutting government spending at the same time. A smaller tax burden can only be achieved by smaller government.
If all other taxes were eliminated a national sales tax might work. It would need to have the appropriate exemptions though on things like, food, clothing, and medicine, to name a few. A national sales tax would also stop the state vs state competition for businesses to relocate. NY state is advertising 10 yrs no corp income tax currently (I do not know the details.)
One problem I see with a national sales tax though is since it only taxes consumption, the rich will just continue to get richer. They do not need to spend money and in some cases they can probably avoid the tax by purchasing outside the USA.
The main proposal for a national sales tax is the FairTax proposal. Don't get me wrong, a value added tax (VAT) is also an option but that's all it is, an option. The Fair Tax would NOT in fact exempt needs lie food, clothing an medicine.
Why not just exempt food and medicine from the tax? Wouldn’t that be fair and simple?
Exempting items by category is neither fair nor simple. Respected economists have shown that the wealthy spend much more on unprepared food, clothing, housing, and medical care than do the poor. Exempting these goods, as many state sales taxes do, actually gives the wealthy a disproportionate benefit. Also, today these purchases are not exempted from federal taxation. The purchase of food, clothing, and medical services is made from after-income-tax and after-payroll-tax dollars, while their purchase price hides the cost of corporate taxes and private sector compliance costs.
Finally, exempting one product or service, but not another, opens the door to the army of lobbyists and special interest groups that plague and distort our taxation system today. Those who have the money will send lobbyists to Washington to obtain special tax breaks in their own self-interest. This process causes unfair and inefficient distortions in our economy and must be stopped.
Basically, the slippery slope and the fear of lobbyists has shut off exemptions for the FairTax unlike sales taxes around the nation. Instead they offer the prebate (which comes OUT of taxes.)
Quote:
Why not just exempt necessities from the FairTax instead of providing for a prebate?
The prebate is the most equitable and most efficient way to make the FairTax progressive. If the FairTax were to exempt necessities, the tax rate would have to be 20 percent higher than the FairTax rate with a prebate.
So basically you get it in a way but as I mentioned when rent has the tax, food has the tax, gasoline has the tax, the prebate runs out sooner rather than later. The payroll taxes would increase it but it would lead to another bulletpoint.
As for the rich, that is the same opinion I have but others just spew how it helps the lower class. Not how it would hurt the middle class or in fact help the rich.
The problem with these debates is that it's completely pointless to talk about eliminating/replacing taxes without address cutting government spending at the same time. A smaller tax burden can only be achieved by smaller government.
I agree but where do we cut? It's easy to say we need cuts, the question is where? No matter what, we have debt to pay off whether it is entitlement or racked up war bills for Iraq and Afghanistan before that. Has the debt been reduced, yes but we still have a ways to go to even be close of being neutral. I'm not saying we should recklessly spend but it's not an easy job to figure out where to cut and where not to.
This thread is a different point of view from Majoun's thread where he suggests eliminating the sales tax and shifting the tax burden onto property tax owners entirely. I was going to post a response, but I think this deserves an entirely new thread.
I would do the complete oppose of Majoun's suggestion to eliminate sale taxes. I say jack up the sales tax up to 15%, 20% or higher and eliminate most other forms of taxation. With sales taxes, EVERYONE who buys goods and services pays the sales taxes. Illegal aliens get paid mostly under the table, so they do not pay income taxes. Also do not own property, so they don't pay property taxes. While it is possible for an illegal alien to buy property in this country, try getting a loan from a bank with no documented income, good luck with that. But illegal immigrates can still take advantage of our educational system, emergency medical, police protection, and other services. And they do not pay dime into the system to support it. If only property owners pay taxes, your shifting the whole tax burden onto one class of people, it's just not a fair form of taxation. The main point of Majaun's argument is people will tend to buy goods and service from states with lower sales tax rates, wouldn’t it make more sense just to level the playing field and made all states charge the same percentage of sales tax? If a state wants to charge less taxes than another state, then the federal government steps in and charges a federal sales tax to level the playing field. So if PA has a 20% Sales tax and Delaware has a 0% tax rate, the Federal government steps in and would charge a 20% Federal sale tax, Delaware would change their sales tax policy pretty quickly to avoid losing sale tax revenue to the federal government.
High VAT's are an invitation for black labor markets, especially in the construction industry. It also gives labor contractors an incentive to feed the least skilled workers into the construction labor market. Results are that the government collects fewer taxes and there are more illegal immigrants working.
This thread is a different point of view from Majoun's thread where he suggests eliminating the sales tax and shifting the tax burden onto property tax owners entirely. I was going to post a response, but I think this deserves an entirely new thread.
I would do the complete oppose of Majoun's suggestion to eliminate sale taxes. I say jack up the sales tax up to 15%, 20% or higher and eliminate most other forms of taxation. With sales taxes, EVERYONE who buys goods and services pays the sales taxes. Illegal aliens get paid mostly under the table, so they do not pay income taxes. Also do not own property, so they don't pay property taxes. While it is possible for an illegal alien to buy property in this country, try getting a loan from a bank with no documented income, good luck with that. But illegal immigrates can still take advantage of our educational system, emergency medical, police protection, and other services. And they do not pay dime into the system to support it. If only property owners pay taxes, your shifting the whole tax burden onto one class of people, it's just not a fair form of taxation. The main point of Majaun's argument is people will tend to buy goods and service from states with lower sales tax rates, wouldn’t it make more sense just to level the playing field and made all states charge the same percentage of sales tax? If a state wants to charge less taxes than another state, then the federal government steps in and charges a federal sales tax to level the playing field. So if PA has a 20% Sales tax and Delaware has a 0% tax rate, the Federal government steps in and would charge a 20% Federal sale tax, Delaware would change their sales tax policy pretty quickly to avoid losing sale tax revenue to the federal government.
This would only work if combined with a system which makes it progressive.
Otherwise the already stifling income and wealth inequality will just get even worse.
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