Is this tax idea of mine a good or bad idea

[JohnKleeb]

I hear that Jim Demint the republican running for senator in South Carolina has proposed a national sales tax. I'd like to propose have little or no sales tax but perhaps increasing the income tax bracket on the wealthy to make up for what you lose by having a smaller or no sales tax. Now be truthful, is this a bad idea or good one or am I just nuts? I'll tell you why I like it. A lower sales tax helps the working poor be able to afford things easier, and I think the rich need a higher income tax bracket too. So am I nuts or right, and do you now know why I would never ever run for president or even state senate or legislature.

[beyurslf]

1. I think it is a step in the right direction certainly.

I would go further and say food and clothing should be exempt from all state sales taxes. We should have a national luxury tax on items that only the wealthiest can afford (big boats, multiple homes, very expensive homes and cars, etc).

I would remove the cap on the payroll tax and exempt the first 10,000 or even 15,000 of income. This is literally a 7% tax break for every person making less than 87K (or so) a year.

[JohnKleeb]

2. a luxury tax for sure

hmm I like your idea for food and clothing honest. See republicans we democrats can be in favor of cutting taxes too :silly:, of course our tax cuts benefit most people so that means we're gonna increase their taxes, I wonder how that would work. Really I've been to delaware a lot and its so much simpler with no sales tax.

[question everything]

3. I would eliminate the payroll tax as a separate item and add it to

regular income tax. Thus, instead of having, what 15%, 25% and 28% income tax brackets (I am not sure about them) they should be 22%, 32% and 35%.

And the budget should have a line item paying seniors who need assistance. This way we eliminate the nonsense that social security tax is "my money."

The recent tax cuts put even more burden on lower and middle class workers where for many the FICA tax is higher than federal and state income taxes.

[JohnKleeb]

4. kick

[JohnKleeb]

5. final

[Jose Diablo]

6. John, I think a sales tax at the federal level is a very bad idea

The progressive concept of taxation is to have taxes levied based on the idea that ability to pay is the first consideration.

Now, as a percentage of income, any tax levied against consumption penalizes those at the lower incomes far more than those at the top income levels because those at the bottom spend most, if not all of their income just surviving.

Now a sales tax is the purest form of a consumption tax out there. The poorest get hit the hardest with a sales tax.

As for income taxes, these are the best and fairest way (from a progressive viewpoint) to raise taxes as long as the rates are properly scaled according to ability to pay. What we have seen over the past 45 years is the value of money discount so much that those that should paying lower amounts have been pushed into higher and higher rates. It has not helped that there are fewer tax brackets. If anything, there should be more separate rate brackets to increase the scaling.

The higher rates for the lowest income brackets have meant that those at the lowest income levels do not have enough disposable income to allow saving for a way out for their children. We now have a permanent underclass, primarily because inflation has emphasized federal taxation to the detriment of those at the lowest incomes.

Sales tax hits the lowest incomes the hardest and a mis-scaled income tax needs to be corrected, as should many loop-holes for corporations and investment income.

This is what I think should be done.

[gavodotcom]

7. Sales taxes starve the poor and feed the wealth of those w/ high-incomes .

I think it's a great idea to eliminate the sales tax. Done correctly, it's good for business, and it's good for working to middle class people. There are some problems with the elimination of the sales tax, though, that should be at least addressed.

The poorest fifth of the population receive only 4%! of the national income. I believe the second-poorest fifth receive less than 15%.

Although we use a progressive income tax, sales taxes tend to be regressive. This results in the real travesty of the sales tax: those with lower incomes tend to end up spending a higher percentage of their income on consumption (upon which, obviously, the sales tax is obtained), than those with higher incomes. This means that quite often under the current system, a lower-income family could be taxed at a higher percentage of their income than someone of more means.

Therefore, by eliminating sales taxes, you're helping the poor and those of modest means by a huge margin.

On a negative note (at least to me), you're also eliminating excise taxes on things like tobacco products. There is no doubt that these taxes are unfair, mind you, but I believe that at least the tobacco taxes do to some extent reduce the number of tobacco users, and also provide a LOT of revenue. (By the way, I'm a smoker).

To make up for all of this revenue, though, you would need to raise the income taxes on the middle-class and, again, on the rich by a much higher margin if you want to save lower-income workers any substantial amount of money.

An additional problem stems on what to do with the tax burden of those who are simply wealthy, or who live on retirement savings alone, and receive no real income, just capital gains, dividends and interest on their savings and investments.

But the burden would not fully fall upon the middle class for the lower class's previous contributions, nor would it completely fall upon the high income earners for both the lower and middle class for the following reason:

With the elimination of the sales tax, demand for all normal goods would increase. This would have two effects; 1) corporations would make much higher profits for products with highly price elasticity, thereby increasing their tax burden in such a way that the higher taxes on middle and upper classes would approach the revenues obtained by sales taxes and 2) these higher profits would have to offset the reduced savings to keep investment levels steady. The benefit of eliminating the sales tax would facilitate higher employment to keep up with demand, as well as a pressure on businesses to invest in more capital .

None of these difficulties in eliminating the sales tax come from an inherent 'unfairness' of a lack of such a tax, rather the problems arise from making the numbers work considering the huge problem of facilitating such a transition.

Anyway, my .02 (which would be 2.6 cents with tax). ;)

EDITS are in []

[JohnKleeb]

9. I see what you mean

Maybe abolishing the whole sales tax is a bad idea but I think you see my point, the reason why I think a national sales tax is a bad idea especially a high one that Jim Demint who is running for senator in South Carolina proposes is that it screws the poor, oh it would be great if Inez Tannenbaum who is running against him brings that up, appears to me though I bet Demint wuold be in favor of drastically reduing the national income tax though.

[gavodotcom]

10. I'd love to see it happen, actually. It could work, would need a lot...

of political capital to do so. There's the rub. :(

Demint sounds like a fine guy. If he were to start a war, I'd enlist immediately, because he has everyone's needs at heart.

[Jose Diablo]

8. Equally important as the source of money for the government

Is how the money is spent by the government.

Lets take a few examples.

The federal taxes on fuel were initially imposed for the purpose of building the transportation infrastructure we call the interstate highway system. For all practical purposes, this system is built, yet we continue to spend higher and higher federal dollars for this system.

Why is this? Because we are told the system needs to be maintained. I don't think so. What I think is because the money is there, and it is being spent as a jobs program to benefit the constituency of the elected officials in Washington, those constituents being wealthy donors to re-election campaigns for the elected representatives.

I would propose, going forward, this fuel tax be spent on new infrastructure. Infrastructure dedicated to renewable energy sources such as Thermal Depolymerization Plants to reconstitute what are now biowastes into fuel and to Solar and Wind Generating Electricity plants.

We need to reduce the consumtion of oil. Renewable energy has the potential, as well as more efficent automobiles and better mass transit systems can help us in this manner. These are areas the fuel taxes could be better spent.

Now as to other places we spend federal money, I think as a country we spend far too much for defense. If we examine whose defense we are spending the money for, it is actually for the defense of International Corporations. Why are we defending their interests. They are not truly Americas interests, they are their own interests. A hard look at the money spent for 'defense' needs to be adjusted.

We should also examine the very republican idea of 'free' movement of investment capital transfering out of our country. Why we are allowing capital to flee to invest in others futures is beyond me. Whats in it for us? We do not profit by investing in India and China. They do as well as those International Corporations, which is also the wealthiest among us.

As for faith based initiatives, do not even get me started on this clear diversion of public interest spending into private interests. I am extremely angry at the neocon stealing our money in this way.

To conclude, I think there is more than enough money to get by. As indicated in the post above, there needs to be a shifting of taxation back to the wealthier. And the money that is spent, should be spent on items that have much more future value to our country and to us, "We the People".