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Old 08-24-2017, 03:44 PM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by Tonyafd View Post
In many areas sales taxes are already 8%. Would the sales taxes then be 12.55%?
TonyAFD, yes, they would.
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Old 08-24-2017, 03:49 PM
 
6,166 posts, read 3,251,225 times
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Quote:
Originally Posted by Supposn View Post
Replacing reduced FICA payroll tax rates with a federal general sales tax.

Transcribed from the thread:
http://www.city-data.com/forum/newre...ply&p=49254002

I advocate to some extent reducing the FICA payroll based tax for funding Social Security retirement, and replacing it with revenue from a general sales tax. Due to the general sales tax there’d be no net tax reduction to employees, but it would increase tax revenue ear marked for Social Security retirement, better enabling full Social Security benefits for the benefit of employees when they retire. this is of some net financial benefit to retiring employees’ families and of net economic benefit to our nation.

FICA taxes levied upon employers are based upon their gross payrolls rather than upon their net incomes. Anything that increases payroll, (e.g. increased hiring, and/or wage rates, and/or hours worked), increases an employer’s net taxes. The extents of employers’ FICA taxes are not directly related to their enterprises’ net incomes. Thus, FICA is a regressive tax as levied upon employers and employees.

Many are opposed to a federal Sales tax because they believe it has a regressive effect upon taxpayers’ budgets.
The reduced portion of FICA payroll tax rates advocated to be replaced, currently has a much greater regressive effect upon the budgets of employees and their dependents. FICA taxes upon employees are annually capped. Employee incomes beyond annual capped amounts and incomes not derived from employment, (i.e. effectively almost the entire incomes of the wealthiest individual persons) are not subject to the FICA payroll tax.

A substantial portion of individuals’ incomes that are not subject to general sales taxes, are spent for items qualifying for reductions of their annual income taxes. Individuals expenditures rather than their income tax filings, are a more accurate reflection of USA’s aggregate individuals’ wealth and annual incomes. A federal general sales tax, rather than an increase of income tax rates, would harvest greater amounts of tax revenues from those earning more than USA’s median income.
This disproportionately affects the poor, unless you exempt payments for services like utilities, car repairs, and necessary items to live, like food, medical care, etc. So it wouldn't work.
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Old 08-24-2017, 04:20 PM
 
Location: Proxima Centauri
3,754 posts, read 1,592,841 times
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Quote:
Originally Posted by Jim1921 View Post
Try again. Better yet, just look at all the tax increase proposals from Bernie and Hillary during the last election.

Bernie Sanders: $15T in tax increases proposed, hitting most taxpayers, report finds - POLITICO

15 Trillion increase from Bernie.

Full List of Hillary

Hillary is a light weight at 1 trillion
I stand by what I said above. While both articles mention Social Security, neither mentions anything about a change in funding methods.

What's your point? Did you write something just to make sure that I didn't go unchallenged?
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Old 08-24-2017, 04:22 PM
 
Location: Proxima Centauri
3,754 posts, read 1,592,841 times
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Quote:
Originally Posted by Supposn View Post
TonyAFD, yes, they would.
The govt does studies to see what the public will put up with. 8% give or take a quarter seems to be the limit.
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Old 08-24-2017, 07:02 PM
 
437 posts, read 198,614 times
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Quote:
Originally Posted by Tonyafd View Post
I stand by what I said above. While both articles mention Social Security, neither mentions anything about a change in funding methods.

What's your point? Did you write something just to make sure that I didn't go unchallenged?
Follow the conversation. It was in response to what you wrote as follows:

"Another scam brought to you by the Republican right always working in your best interest."

When you go down a partisan track, be prepared to see that the other side also has their issues, which you conveniently left out in your attempt to attack the right.

Last edited by Jim1921; 08-24-2017 at 07:46 PM..
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Old 08-24-2017, 07:53 PM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by bpollen View Post
This disproportionately affects the poor, unless you exempt payments for services like utilities, car repairs, and necessary items to live, like food, medical care, etc. So it wouldn't work.
BPollen, I'm opposed to waiving sales taxes for car repairs.
I can foresee customizing, or rebuilding to produce luxurious vehicles. When does repairs cease being a vehicle repair, but are effectively creation of recreational (home) vehicles? If you don’t move a recreational vehicle from its parking space, it’s effectively a luxury trailer.

Quote:
Originally Posted by Supposn View Post
... I’m an advocate of waiving sales taxes upon medicines, or food other than that supplied by restaurants, or caterers.
it’s difficult to draft legislation the parses ordinary and luxury priced products. For that reason, I’m advocate of fewer such sales tax waivers upon classes of products. But the political reality is that there will be more than I prefer.

I’m aware to the extent that general sales taxes are waived upon sales of products that are more often or in greater quantities consumed by lower income persons, we can to some limited extent transform a sales tax to be effectively more progressive.
But it’s difficult to draft regulatory provisions for such products as not to unduly reduce tax revenues.
Travel within reasonable commuting distances on mass transportation is one of the service products that I would prefer to be waived if the legal drafting did not also allow waivers for longer distances or more luxurious transportation.

Difficulty of legal drafting is much less problematic for products or services that can be linked to individuals’ primary residences. It’s feasible to waive a capped amount upon rents, specific utilities, and other services linked to such residences; those capped amounts should be annually cost-of-living adjusted.
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Old 08-24-2017, 08:17 PM
 
Location: Paranoid State
12,685 posts, read 9,425,981 times
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Quote:
Originally Posted by Supposn View Post
SportyandMisty, I’m unaware of any USA jurisdiction’s general sales tax that’s applicable to transfers of wealth with regard to savings, or investments.
Me either. But I wasn't commenting on gift or inheritance taxes, or other forms of taxation. I was commenting in relation to the federal income tax.

Quote:
Originally Posted by Supposn View Post
. Sales taxes are not levied on deposits to funds, purchases stocks, bonds, portions of enterprises, etc.
I never said they were. What I said was the federal income tax system provides a disincentive to save. Income that I earn through wages is taxed through the federal income tax system. Fair enough. At that point I have a choice: I can spend that money (consumption) or I can save and invest that money (the genesis of capital formation.) Currently if I save that money I am once again taxed on any return on that investment. That is a disincentive to save.
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Old 08-24-2017, 08:24 PM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by Tonyafd View Post
The govt does studies to see what the public will put up with. 8% give or take a quarter seems to be the limit.
TonyAFD, creating a public opinion poll to serve your own agenda is not extremely difficult. Who’s asking, who’s being asked, how are the questions worded are all critical variables.

We people may not understand or not be familiar with what’s being discussed, but we do not refrain from voicing our opinions and often those among us with the least familiarity with the topic, voice strongest and most certain opinions; often our opinions are regarding topics that are matters of indifference to us.

Don’t depend upon voters being logical; we elected president Donald Trump.
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Old 08-24-2017, 09:00 PM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by SportyandMisty View Post
Me either. But I wasn't commenting on gift or inheritance taxes, or other forms of taxation. I was commenting in relation to the federal income tax.

I never said they were. What I said was the federal income tax system provides a disincentive to save. Income that I earn through wages is taxed through the federal income tax system. Fair enough. At that point I have a choice: I can spend that money (consumption) or I can save and invest that money (the genesis of capital formation.) Currently if I save that money I am once again taxed on any return on that investment. That is a disincentive to save.
SportyandMisty, the topic’s title is “Replacing reduced FICA payroll tax rates with a federal general sales tax”. You’re posting your objections to our income tax system?
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Old 08-26-2017, 05:00 AM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by freemkt View Post
Please explain how a consumption tax is progressive. Taxing rent is inherently regressive.
Regressive or progressive as comparative adjectives:

Quote:
Originally Posted by Supposn View Post
TaxPhd, regressive or progressive by what criteria? A light color can be darker than other light colors.
A flat or regressive tax can be more or less progressive than some other tax.

The flat rate FICA payroll tax behaves as a regressive tax: Employees’ total annual taxes are “capped”; Its affordability is of lesser consequences to higher income earners; It’s not levied on individuals’ incomes not derived from employment.

The proposed flat sales tax rate that’s to replace the reduced FICA revenues will be levied upon all individual purchasers.
If an employees’ entire wages were spent upon items subject to the sales tax, their individual total annual sales taxes could not exceed their reduction of FICA taxes.
[The proposed sales tax would not be applicable to food not sold by restaurants or caterers, and to capped amounts of residences’ rents and each of specified utilities. Cap amounts will be annually cost-of-living adjusted].

Thus, the proposed drafting of the flat rated sales tax would be slightly more progressive. It is more progressive than the portions of FICA payroll taxes it is replacing.

Alternatively, if the U.S. Congress could pass a bill replacing reduced FICA revenues with an increase of our progressive income tax rates, we cannot expect the consequences to be significantly more progressive than the proposed sales tax.
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