Gary Johnson Is Not for the Middle Class, for a Consumption Tax
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National consumption tax is fine, but as an EXTRA revenue source (to fund middle class services like universal child care/kindergarten for example or a national health care system), not as a replacement of income tax
a financial transaction tax could replace the income tax.
it would be much better than a sales tax or income tax.
He wants to sign legislation that removes the IRS (a event that could remove more people from the economy, an issue with shedding jobs over the last ten years)
Keeping the bloated IRS around as big as it is for the sake of jobs, when we could change taxation and reduce it, is like decrying of modern agricultural machinery for reducing our the labor force from more than 90% to less than 2%.
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Originally Posted by mkpunk
removes the federal income tax, federal corporate tax and enact a consumptionon tax, in particular one he claims will look similar to the Fair Tax. The Fair Tax proposal is notorious for being crushing to the middle class, the portion of the US population that the economy is built off of. We can't put the tax burden on them while the rich get off with far less than a 23% tax rate as they wouldn't spend 100% of their income while even the middle class can get into that territory and lower class, especially those renting are hosed.
a financial transaction tax could replace the income tax.
it would be much better than a sales tax or income tax.
By "financial transaction tax", would that also cover financial transactions involved in investing?
Gary Johnson also wants to get rid of capital gains taxes, but those should be covered under a financial transaction tax.
I have been entertaining voting Libertarian Party presidential nominee Gary Johnson but not anymore. I watched a video on him from on PBS News Hour where he talked about taxes. He wants to sign legislation that removes the IRS (a event that could remove more people from the economy, an issue with shedding jobs over the last ten years), removes the federal income tax, federal corporate tax and enact a consumptionon tax, in particular one he claims will look similar to the Fair Tax. The Fair Tax proposal is notorious for being crushing to the middle class, the portion of the US population that the economy is built off of. We can't put the tax burden on them while the rich get off with far less than a 23% tax rate as they wouldn't spend 100% of their income while even the middle class can get into that territory and lower class, especially those renting are hosed.
Go to his website, or someone on here posted a link. He believes in a progressive consumption tax. Many necessary basics would likely be exempt
The poor and middle class would no longer have the burden of paying a tax company either to perform their taxes, I got an estimate this year and it was going to be $1800, just to have them do my taxes. I own a business and sales tax is so incredibly easy to do. I already keep track of all my sales, so I just enter that information once a month on the state website and it literally takes about 5 minutes and doesn't cost me a thing. You're right that it would eliminate a lot of jobs, from the IRS to tax service businesses. I personally wouldn't mind the government hiring many of the IRS employees to audit businesses and make sure they are paying sales tax.
But in reality, the chance of Johnson getting this done is slim. I'm looking forward to him cutting our overseas expenses and bringing that money back to the US.
No it shouldn't, especially in an economy based around it. The US has such an economy.
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Originally Posted by tlarnla
Not only would a national 23% sales tax hurt poor and middle class citizens who are living paycheck-to-paycheck, but it could also deliver a huge blow to the economy.
When prices are 23% higher, people will stop buying what they don't need. The wealthy will continue to buy luxury goods, but they'll do it when they travel overseas. The poor and middle class will learn to forego certain luxuries Americans now take for granted. We can see all of this demonstrated by Japan, twice, and that was only with tiny 2% and 3% increases. Imagine what 23% would do!
People may be happy to not have to pay income taxes, but that won't make them happy when they go shopping and learn their bill is 30% higher than they expected. They'll just decide to "save" the extra money, by spending less. When the public stops spending money because they don't want to pay 30% extra, or companies have to reduce their prices 30% to reduce the burden on their customers, you can expect to see the unemployment rate skyrocket.
Exactly, if I knew I had to pay more, I'd spend less. I don't need to see as many movies or buy the several comics I buy each month that I do. It is an economic deterant.
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Originally Posted by LIGuy1202
Thanks for responding to my post. Most don't.
The CNN Money article is based, in part, on information the Pew Research Center. Pew is respectable. But Pew is politically correct and "polite"...which is nice.
But the fault in Pew's research and reporting, especially in the data CNN Money used is that Pew defines the middle class as "the middle three-fifths" of income earners. Such a definition requires (allows) the middle class to have the same percentage of income earners (60%). The middle class will never shrink, never be "poor", and will always be the *middle* three-fifths of income earners.
Pew also "throws out" the bottom 20% and the top 20% (the top 1% where nearly all the wealth exists) in order to come up with a politically correct and polite number that doesn't bother anyone.
That is true that there always be a middle class. Let's put it this way, if you have people that owe money, people that have no money and people that have money, those that have no money would actually be middle class.
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Originally Posted by michiganmoon
Keeping the bloated IRS around as big as it is for the sake of jobs, when we could change taxation and reduce it, is like decrying of modern agricultural machinery for reducing our the labor force from more than 90% to less than 2%.
It's not just the IRS though, as Mattks mentions below, it's not just the IRS but the tax prep industry that will suffer. The BLS lists that there were 1,332,700 tax accountants in 2014. The IRS's 94K jobs is a drop in the bucket compared to 1.3 million people now out of work and others displaced because they work for an accounting firm. I don't know about you but 1.3 million out of work is FAR too many players out of the economy.
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Consumption taxes CAN be progressive. Gary Johnson's is. He if offering a prebate - a check to cover enough of the poor's taxes.
A regressive tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay. Though true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume, and travel.
User fees often are considered regressive because they take a larger percentage of income from low-income groups than from high-income groups. These include fees for licenses, parking, admission to museums and parks, and tolls for roads, bridges, and tunnels.
It simply boosts their annual income by $5,152, giving them a real income of $13,353. But they’re still spending $18,492, and still paying $4,253 in “FairTax.” Taken as a percentage of their post-“prebate” income, that amounts to a tax rate of 31.85 percent.
In contrast, a household of three in the top 20 percent of wage earners surveyed made an average of $127,146 before taxes in 2003 and spent an average of $81,731, according to the BLS. Boosting their income by $5,152, then calculating the “FairTax” paid on their spending, yields a tax rate of only 14.21 percent.
That’s a textbook example of a regressive tax. And that’s not “fair.”
The FairTax: Is It Regressive?
Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.
The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.
However, the Panel reported that with an individual and corporate income tax replacement (excluding other taxes) and rebate system, the overall tax burden on middle-income Americans would increase while the tax burden on the very rich would drop. According to the report, the percent of federal taxes paid by those earning from $15–$50,000 would rise from 3.6% to 6.7%, while the burden on those earning more than $200,000 would fall from 53.5% to 45.9%.
Quote:
Originally Posted by Mattks
Go to his website, or someone on here posted a link. He believes in a progressive consumption tax. Many necessary basics would likely be exempt
The poor and middle class would no longer have the burden of paying a tax company either to perform their taxes, I got an estimate this year and it was going to be $1800, just to have them do my taxes. I own a business and sales tax is so incredibly easy to do. I already keep track of all my sales, so I just enter that information once a month on the state website and it literally takes about 5 minutes and doesn't cost me a thing. You're right that it would eliminate a lot of jobs, from the IRS to tax service businesses. I personally wouldn't mind the government hiring many of the IRS employees to audit businesses and make sure they are paying sales tax.
But in reality, the chance of Johnson getting this done is slim. I'm looking forward to him cutting our overseas expenses and bringing that money back to the US.
The FairTax has little chance of passing but even giving it more of a chance to by voting Johnson or Huckabee, is something I won't do. I see the ruse in it that others are blind to.
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