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The fallacy of tax reform is that when you propose a new tax to replace an old tax, if that new tax ever gets enacted, it gets added to the old tax instead of replacing it.
Location: "Silicon Valley" (part of San Francisco Bay Area, California, USA)
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I think more rich people should think like Arnold Schwarzenegger. When he was governor of California -- I voted for him both times -- he said he likes paying taxes because it reminds him of how rich he is.
You know essentials like groceries aren't taxed right?
They would have to be if you want sales tax to replace income tax. People would stop buying luxuries, so necessities would need to be taxed or the government would not earn enough income to replace the income they lost from income taxes.
Plus the sales tax would have to be something like 20-30%. That would be in addition to the sales taxes you currently pay in state and city sales taxes, not instead of it. Prepare for a huge drop in consumption, which would cause a huge recession, and you might be one of the millions who lose their jobs.
I have various investments and I don't find federal taxes hard to file.
*All* of the complexity comes from the millions of exemptions and modifications to what gets classified as income, and then figuring out how to structure your records and investments to avoid paying. If we took those away it would take seconds to figure out what you owe.
I think most people agree that the wealthy should pay more, especially since that is the only demographic that has seen a real rise in income in the last few decades. Unfortunately since we've gone "global" it's easier than ever for them to avoid paying.
I don't feel comfortable with the Boogieman (The IRS) looking over my shoulder at my wallet and smacking his lips. It's harder to make a mistake with federal sales tax and you don't have to be in constant fear of Mr. Taxman taking everything you own over a penny discrepancy.
If it is not somehow adjusted, Federal Sales Tax is regressive. A better way, I'd argue, is the Fair Tax , in which you get a rebate to cancel the tax on expenses up to poverty level, so the effective tax rate on a poverty line expense level is zero, and it goes up from there.
They would have to be if you want sales tax to replace income tax. People would stop buying luxuries, so necessities would need to be taxed or the government would not earn enough income to replace the income they lost from income taxes.
Plus the sales tax would have to be something like 20-30%. That would be in addition to the sales taxes you currently pay in state and city sales taxes, not instead of it. Prepare for a huge drop in consumption, which would cause a huge recession, and you might be one of the millions who lose their jobs.
This.
Work moved me from WA to ID 3 months ago. The sales tax in WA was 9.3% and for the last 4 - 5 years I lived there I either bought used, bought from out of state, bought on post, or just did without until I left the state. Heck, I'm still driving a 15 year old car I bought cheap & used 5 1/2 years ago partly because WA socks you a good one at the DMV when you go to register. At least they don't charge you annual property tax on it.
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