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A federal income tax is a progressive tax, whereas a national sales tax would be a regressive tax. The super wealthy could easily afford it, while the poor and middle classes would in effect be paying a higher percentage of taxes. They'd likely need to cut all their discretionary spending. Businesses would make less money and have to cut workers and cut prices. We'd end up in a deflationary spiral.
This idea may sound good on paper but it just wouldn't work in practice.
Not necessarily. You'd only pay the tax on what you choose to spend. People like me who drive their cars until they die would pay less tax on cars than those who choose to buy a new one every 2 years. Also, you catch illegal income in this as well. Illegal aliens will pay taxes, those working under the table will pay taxes, those not reporting income from cottage industries will pay taxes and those involved in illegal activities such as drug dealing will pay taxes. I'm not sure the middle class will pay more by the time you add all this in. The bottom will but they should. Right now they're not paying to fund the system at all. Done right, the tax would be on non necessities so there shouldn't be an issue with feeding your family. The issue will be that new car, all the gold I saw on welfare recipients when I was working the pharmacy counter and cashing their welfare checks, those who buy new clothes all the time, etc, etc, etc... Those who wanted to could do a lot to avoid taxes by making do with what they have or buying less expensive products. A national sales tax in lieu of an income tax gives control over how much tax is paid to the person paying the tax. If you want that new pair of Uggs...you'll pay the tax. If you make do with your old pair, you won't.
We should eliminate the federal income tax and replace it with a national sales tax. We should also eliminate state income tax and increase state sales tax.
This way all the illegal or under the rug type of money would be taxed.
Hire the IRS to handle all national sales tax, that way they are not unemployeed.
Increase people's income that are on social security the same percentage of the national income tax rate.
It would free up everyones time, just look at the statistics on how much time is spent preparing income tax.
LOL, we'll eventually have a national sales tax, but it will be in additon to, not instead of, the federal income tax.
That's what I'm afraid of. However, I prefer this to more hikes in the income tax because right now half of Americans don't support the federal government. At least the burden will be shared.
I think it would be terrible for the economy. Most states already have a sales tax. Add a federal sales tax and you'd be looking at a total sales tax rate of about 30% on everything you buy. No thanks.
I'd prefer to see higher income taxes come before a national sales tax. Sales taxes are regressive, and hit poor people the hardest.
In this case I disagree. If you swap a sales tax for income tax, remember, the income tax match paid by employers along with all other federal taxes, are rolled into the cost of goods and services. If you take that out, it lowers the price of goods and services, and the corresponding increase in sales tax, simply adds it back in. Bottom line, the price of goods and services really won't change much, but we get to keep our whole paycheck.
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