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Seeking opinions and comments on flat consumption tax, fair tax and economy, fiat, property taxes, sales tax, consume more tax more, consume less tax less
Don't tax any income from business or individual. Instead apply a flat consumption tax. The more you consume the more you pay.
If you are rich, you won't just keep the money in your bank account. You'll reinvest it. Perhaps build a new factory, buy stock, buy land whatever.
I guess you could also tax business profits that are leaving the country (ie. owned by a foreigner).
This system would also attract many wealthy people, who wouldn't want to come to this country and pay zero taxes on their dividend income?
Also many people wouldn't hold fiat due to it's poor track record with inflation. People would receive their wages and business profits in fiat paper. If they don't spend the money buying assets or reinvesting they'll surely be wasting their hard earned money.
So you would have taxes like:
property taxes
sales tax
Oh yea. I was reading the fair tax entry and it sounds amazing
Amazing and it will work. So pretty much count on it never happening. We can't have our congress or illegal immigrants paying taxes. That would just be unfair.
Amazing and it will work. So pretty much count on it never happening. We can't have our congress or illegal immigrants paying taxes. That would just be unfair.
As much as I would hate to agree with you. Unfortunately, you are right.
Amazing and it will work. So pretty much count on it never happening. We can't have our congress or illegal immigrants paying taxes. That would just be unfair.
The biggest problem I have with this "Fair Tax" is how to you define "retail". If an airline buys fuel from a supplier to fuel it's planes, does it have to also pay a 30% tax on that fuel? What about if steel companies buy raw iron ore? Is that a retail sale from the mine? So now the steel company pays 30% on materials bought to make the retail product, and then they also have to pay 30% tax on the finished product?
The Fair Tax would increase tangible based corporations expenses 30% overnight. Even if they make a profit or not, corporations would be paying taxes. I can see that putting quite a few out of business.
You are talking about a national sales tax. If you handled it like state and local sales tax, it could also become quite complicated. For example, to be fair to those who make less money, you would have to exempt things like groceries, medical items like prescriptions and OTC drugs, and other necessities. You would also most likely have exceptions, such as sales for resale, in order to not pyramid the tax to the point that a consumer would never be able to afford the item. If not, imagine if at each step of the process a tax would apply - let's say you were buying a chair. If the guy who chopped down the tree had to collect tax on the sale of the wood to the lumber yard, and then the lumber guy had to collect tax on the sale of the lumber to the lumber finisher, and then he collected tax on the sale to the chairmaker, and then he collected tax on the sale to the wholesaler, and he collected on the sale to the retailer, by the time you bought the chair the price would be through the ceiling.
If you talk to experts in the state and local tax area, most will tell you that sales and use tax law is a lot more complicated than it seems on it's face. Not that I think this is necessarily a bad idea. Just that it isn't as simple as it seems.
The biggest problem I have with this "Fair Tax" is how to you define "retail". If an airline buys fuel from a supplier to fuel it's planes, does it have to also pay a 30% tax on that fuel? What about if steel companies buy raw iron ore? Is that a retail sale from the mine? So now the steel company pays 30% on materials bought to make the retail product, and then they also have to pay 30% tax on the finished product?
The Fair Tax would increase tangible based corporations expenses 30% overnight. Even if they make a profit or not, corporations would be paying taxes. I can see that putting quite a few out of business.
The idea is that since all current taxes would be gone, you would get a company then lowering prices to attempt to get more customers. Other companies would then follow suit. The 23% or 30% tax then on top of that would bring the cost of good to about the same level they are right now.
It goes into depth in the book about it. Apparently have been tons of studies done on this showing how it would work great.
As for you Corp question, yes I think they would pay taxes on the materials they buy, but that is the only tax they would pay. The Corporation would obivously pass that tax on to the consumer, but with the removal of all other taxes it apparently doesn't make any difference in the cost of goods or doing business.
Something like that. The Fair Tax book is a really interesting read.
I disagree that a 30% tax would bring the cost of goods to their current level with our after tax dollars. GM for example will be paying multiple 30% taxes on the products they buy to put into their cars, and their producers will be paying multiple 30% taxes on the materials they buy to make those products...etc. etc. Read janetvj's post, it expands on my concerns.
We'll end right back where we are now, with loopholes to define what a retail product is, etc. and lots of complicated tax code.
Edited to add: Have you ever been to China town in NYC? The asians deal almost exclusive in cash. Why? I will let you figure that out. Think about all the under the table dealings that will go on with a 30% tax!!!
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