Incrementally replacing income taxes with a general consumption tax.

To whatever extent feasible I advocate shifting from taxing net incomes to a general sales tax.  [Sales taxes are not regressive or progressive but they're deemed to be regressive in comparison to progressive income taxes].

By waiving taxes upon selected items that are a greater proportion of lower rather than higher income earners' expenditures, or waiving taxes upon capped threshold of selected items' prices, (although the general sales tax has only a single tax rate) these waivers and caps effectively make the sales tax somewhat a progressive tax.

While any federal income taxes exist, we should strive to decrease our income taxes' inequities or lack of consideration for lower income earners.

I'm a proponent of keeping the top rate of corporate income taxes equal to the top rate of individuals' income taxes.  Otherwise entrepreneurs will declare little or no personal incomes but they'll live very well upon their enterprise's expense accounts.

I'm a proponent of eliminating the per capita reduction of taxable incomes and replacing it with a per capita annually cost of living adjusted amount of reduction of the taxpayers' income taxes, (i.e. tax credits).  Due to progressive tax rates, our per capita reduction of taxable income is of greater per capita benefit to higher income earners, 

I'm a proponent of replacing unjustified income tax waivers and exception and apply those revenue increases to reducing all income tax bracket rates. 

As we simultaneously enact or further increase the federal sales tax, we should also increase the per capita income tax credits and the reductions of all income brackets' tax rates.
The "rounds" of reducing all income brackets' tax rates will eventually begin eliminating the lowest income tax bracket.  As income tax brackets are eliminated, the tax rates of remaining brackets are relatively "flatter" to each other.
After some round of sales tax increase and income tax rates' reduction, I expect that the sales tax will approach an unacceptable rate and the transfer of tax revenues will have to be halted.  If I'm incorrect, federal income taxes will be entirely eliminated.

Respectfully, Supposn

I much prefer a flat tax

First problem with income tax is that it is progressive which is a liberal wet dream the idea of redistributing the wealth. As you stated much more eloquently than me the problem is that these liberals often take advantage of tax deductions which lowers their rate. The people that are poor in general have little deductions and therefor end up with a much higher tax percentage than the rich.

For example, my friend earns about 30% more than me netto. But due to his deductions he only pays 25% income tax whereas I being poorer pay 36% income tax.

With all the deductions and special interests progressive income tax hurts the poor while benefitting the rich, as I said, it's perfect for liberals as they get to feel good about themselves at the same time as they pay less percentage.

My problem with sale tax is that it hurts the poor the most, as they are the ones with less purchasing power. I'm not against sale tax, but in norway the sale tax is 25% on all goods and services which really is a lot but also is not too much.

The system of no income tax and sale tax is in effect in Colombia, and it is working very good there. But what disagree with you about is

QuoteI'm a proponent of keeping the top rate of corporate income taxes equal to the top rate of individuals' income taxes.  Otherwise entrepreneurs will declare little or no personal incomes but they'll live very well upon their enterprise's expense accounts.

The incentives that drive private citizens also drive private corporations, if you keep in place unreasonable income taxes on corporations they will spend money to evade taxation if it is profitable. Better to lower income taxes on corporations to such a level it increases corporate willingness to pay taxes in domestic country thereby increasing the taxation base by lowering taxes.

Even though I prefer flat tax I'm not against eliminating income tax with sale tax. But the biggest problem is spending, if you have unbalanced and unsustainable budget it does not matter how you tax the population in the long run as you will eventually default.

Colombia have government guaranteed wellfare without income tax and you can get assistance without insurance. The whole argument that we need to pay income tax in order to have wellfare is empirically incorrect.

No! No! No!

Replacing it with an sale tax and getting rid of ALL the other mess PERIOD!  You state

Quote from: Supposn on October 09, 2013, 10:05:20 PM
we should strive to decrease our income taxes' inequities or lack of consideration for lower income earners.

and then provide example after example of taxation methods for insuring inequalities in favor of the poor as if equal taxation is an inequality with avoidance being a given.  In other words you have given in to the liberal mindset that equality in taxation is one that taxes the rich at a higher rate than the poor --- as if it was a given and without even pausing for a breath.  Why?  Taxing ANY group at a disproportionate rate IS THE INEQUITY.

It you need further justification, I need only point out the economic and socio-political implications of taxation.  The economic ramifications of a taxation RATE, both at the individual and societal levels, are a reduction in incentives.  Incentives can be directly and mathematically quantified (see any of numerous works I won't restate here).  Suffice it to say the rate of reduction in effort is mathematically related to this incentive.  If you take property (labor and it's associated wages are property and enjoy the same constitutional protections --- see T. Jefferson) at X rate you will reduce effort at an equal RATE among rich and poor alike.  Since the goal (I will state this as the TRUE given) is to MAXIMIZE PRODUCTION tax RATES should be equal for rich and poor alike.  Nothing else matters and you stray from this ideal at your own detriment.  Free markets work, why try anything else?

The socio-political ramifications are obvious.  The tax code is fully one half of the source of corruption and dysfunction in our government.  The other being expenditures.  Inequalities in the tax rates and the shear volume of the code aren't a result of an attempt at equality and certainly not an effort to maximize production.  They are a glaring example of the graft and corruption which results from the tyranny of unchecked representation given the power to tax.  The complexity of the tax code itself is an additional burden and the price we pay for complacency.

Can a true free market let alone a fair flat, or consumption based tax plan exist in this country with its current public assistance programs and the way they're operated? 

I say "no" to all three.

My reason for saying this is that the huge numbers of people on public assistance programs little or no incentive for being productive due to the almost total lack of accountability these programs currently hold them to. This is not to mention that many of those on public assistance pay their taxes with other people's money (this, and the ease at which those on public assistance manage to increase their benefit payouts, makes it impossible for the existence of anything even remotely considered as being a free market).

We can beat the Socialists and market manipulators supposn to be free market laissez faire capitalists.  We have done it in the past when we had them in our sites and we can and I believe will do it again now that they are in our ranks.  Don't give up so easy.

There will be much pain involved --- the patient is quite sick.  Socialism is a cancer that grows until it kills the host.  Left to its own progression (progressivism) the inevitable conclusion is strife, collapse, tyranny, revolt, the death of a great nation, strife, followed by rebirth.  It is also quite possible a well-timed healthy dose of "We the People" ideotherapy will stave off the Socialitus in time.  That is, if the patient wakes up in time to the danger and makes the necessary corrective actions. 

Americans are a different breed even though they are currently complacent.  It was no accident Liberty took root here.  We are still the product of our forefathers and even those who have arrived of late come here seeking that flame kindled long ago in Philadelphia.  I have 100% faith that flame licks deep inside waiting to be rekindled and overcome these foolish winds of change.  Mark my words, "It is coming whether it comes in time or otherwise, and in the end Liberty will prevail".  And I know just the way to do it.

Quote from: Supposn on October 09, 2013, 10:05:20 PM
Incrementally replacing income taxes with a general consumption tax.

To whatever extent feasible I advocate shifting from taxing net incomes to a general sales tax.  [Sales taxes are not regressive or progressive but they're deemed to be regressive in comparison to progressive income taxes].

By waiving taxes upon selected items that are a greater proportion of lower rather than higher income earners' expenditures, or waiving taxes upon capped threshold of selected items' prices, (although the general sales tax has only a single tax rate) these waivers and caps effectively make the sales tax somewhat a progressive tax.

While any federal income taxes exist, we should strive to decrease our income taxes' inequities or lack of consideration for lower income earners.

I'm a proponent of keeping the top rate of corporate income taxes equal to the top rate of individuals' income taxes.  Otherwise entrepreneurs will declare little or no personal incomes but they'll live very well upon their enterprise's expense accounts.

I'm a proponent of eliminating the per capita reduction of taxable incomes and replacing it with a per capita annually cost of living adjusted amount of reduction of the taxpayers' income taxes, (i.e. tax credits).  Due to progressive tax rates, our per capita reduction of taxable income is of greater per capita benefit to higher income earners, 

I'm a proponent of replacing unjustified income tax waivers and exception and apply those revenue increases to reducing all income tax bracket rates. 

As we simultaneously enact or further increase the federal sales tax, we should also increase the per capita income tax credits and the reductions of all income brackets' tax rates.
The "rounds" of reducing all income brackets' tax rates will eventually begin eliminating the lowest income tax bracket.  As income tax brackets are eliminated, the tax rates of remaining brackets are relatively "flatter" to each other.
After some round of sales tax increase and income tax rates' reduction, I expect that the sales tax will approach an unacceptable rate and the transfer of tax revenues will have to be halted.  If I'm incorrect, federal income taxes will be entirely eliminated.

Respectfully, Supposn

Huh? What are you saying?

You advocate a national sales tax to replace the current income tax system, but at the same time you advocate maximizing corporate taxes to keep those evil fat cats from cheating by living off their expense accounts. Do you realize that this makes absolutely no sense? If there's a universal consumption tax in place, it won't matter where the fat cats get their money -- they'll pay their taxes when they spend it.

That's how consumption taxes work.

One of the beauties of a consumption tax is exactly that -- regardless of the source of your income, you pay your tax when you spend your money. That brings folks into the tax-paying pool who've never been there before. Prostitutes. Illegal aliens. Drug dealers. Criminals of every sort and stripe. Off-the-books gamblers. Internet entrepreneurs.  LOTS of folks make LOTS of money every year that never gets taxed. But they still like their flat-screen TV's and their iPhones and their bling, and they'd be paying their taxes that way.

Do yourself a favor. Buy a copy of The FairTax Book.  Then read it. Don't get excited, it's only maybe 150 pages. You'll learn a lot.

Would this be a topic of conversation had the financial regulatory system that should have been in place prevented the meltdown of 2008?? There is no doubt in my mind that the US has a SPENDING problem; talking about Consumption taxes etc have their place...but the real malfeasance has been in Financial Regulation...or rather lack of it. Locally, we had big collapses in the 90's that led to this:

http://www.apra.gov.au/Pages/default.aspx

Having APRA in place the Regulators did their job and we avoided the worst effects of the GFC. But it was no accident.....and a Consumption tax also arrived in 2001...after being approved at the election prior to its implementation; a novel idea that; putting it to "the people" honestly and with the arguments for and against being decided by "the people".

So in short what has happened here since the GFC?? The moronic left has been in charge and we now have a spending problem....though not a crisis. Our recent election has delivered a resounding "fail" on those policies and a good Conservative Gov should prevent any crisis from developing.

So in short...nothing beats a Government with Prudence at its heart.... and a willingness to let the Private Sector do the heavy lifting.

PS: ...though not ALL the taxes it was supposed to get rid of have indeed been disposed of...yet...but we're working on it.

Greg

Quote from: gtopa1 on October 12, 2013, 03:13:24 AM
Would this be a topic of conversation had the financial regulatory system that should have been in place prevented the meltdown of 2008?? There is no doubt in my mind that the US has a SPENDING problem; talking about Consumption taxes etc have their place...but the real malfeasance has been in Financial Regulation...or rather lack of it. Locally, we had big collapses in the 90's that led to this:

http://www.apra.gov.au/Pages/default.aspx

Having APRA in place the Regulators did their job and we avoided the worst effects of the GFC. But it was no accident.....and a Consumption tax also arrived in 2001...after being approved at the election prior to its implementation; a novel idea that; putting it to "the people" honestly and with the arguments for and against being decided by "the people".

So in short what has happened here since the GFC?? The moronic left has been in charge and we now have a spending problem....though not a crisis. Our recent election has delivered a resounding "fail" on those policies and a good Conservative Gov should prevent any crisis from developing.

So in short...nothing beats a Government with Prudence at its heart.... and a willingness to let the Private Sector do the heavy lifting.

PS: ...though not ALL the taxes it was supposed to get rid of have indeed been disposed of...yet...but we're working on it.

Greg

In the US, both party's are at fault.
The Dim party, the party of spoiled children got hold of the credit card, the GOP, the parents, failed to control the kids and...just like partners in crime the two collaborated, milked the tax payer for their own self interests.

There was no adult overseeing their activities, and now these kids voted in a Marxist and the parents are off getting drunk on power while the left destroy the country.

For this reason the people, (responsible adults) will vote the Tea movement into power to correct the problem.

That's it in a nutshell.

It wasn't the failure of financial regulation which resulted in the problem.  You don't go NEAR far enough.  We should do away with much of the regulation too.  The failure was tying the purse of the taxpayer into the financial markets making it necessary to regulate and furthermore, bailing the screwballs out after they lost their arses.

The entire US investment world was heavily involved in purchasing funds that were essentially "junk bond" versions of home mortgages. The home mortgage market, itself largely structured by the federal government, was pressured endlessly since the Clinton years to lend money to people that, by rational standards, did not deserve to borrow money. They had crappy credit histories. (That's what "subprime mortgage" means. "Subprime" refers to the borrower, not the mortgage itself.) The housing "bubble," when it finally popped, exploded the economy into its downward spiral. And the housing "bubble" was constructed out of whole cloth by the federal government, and NOT by "Wall Street" or "fat-cat bankers." Sure, Wall Street and the fat-cats were there to slurp up the goodies, but that's what they do. And the goodies, in this case, were wholly manufactured by the government of the United States.

The most important thing we need to accomplish is to get government as far away from the free-market economy (what's left of it) as is humanly possible. Understand this: it is government regulation that CAUSED the recession we're wading through right now. When it comes to economic difficulties, government is NEVER, EVER the solution.

Quote from: Supposn on October 09, 2013, 10:05:20 PM
Incrementally replacing income taxes with a general consumption tax.

To whatever extent feasible I advocate shifting from taxing net incomes to a general sales tax.  [Sales taxes are not regressive or progressive but they're deemed to be regressive in comparison to progressive income taxes].

By waiving taxes upon selected items that are a greater proportion of lower rather than higher income earners' expenditures, or waiving taxes upon capped threshold of selected items' prices, (although the general sales tax has only a single tax rate) these waivers and caps effectively make the sales tax somewhat a progressive tax.

While any federal income taxes exist, we should strive to decrease our income taxes' inequities or lack of consideration for lower income earners.

I'm a proponent of keeping the top rate of corporate income taxes equal to the top rate of individuals' income taxes.  Otherwise entrepreneurs will declare little or no personal incomes but they'll live very well upon their enterprise's expense accounts.

I'm a proponent of eliminating the per capita reduction of taxable incomes and replacing it with a per capita annually cost of living adjusted amount of reduction of the taxpayers' income taxes, (i.e. tax credits).  Due to progressive tax rates, our per capita reduction of taxable income is of greater per capita benefit to higher income earners, 

I'm a proponent of replacing unjustified income tax waivers and exception and apply those revenue increases to reducing all income tax bracket rates. 

As we simultaneously enact or further increase the federal sales tax, we should also increase the per capita income tax credits and the reductions of all income brackets' tax rates.
The "rounds" of reducing all income brackets' tax rates will eventually begin eliminating the lowest income tax bracket.  As income tax brackets are eliminated, the tax rates of remaining brackets are relatively "flatter" to each other.
After some round of sales tax increase and income tax rates' reduction, I expect that the sales tax will approach an unacceptable rate and the transfer of tax revenues will have to be halted.  If I'm incorrect, federal income taxes will be entirely eliminated.

Respectfully, Supposn

Here's the problem with your proposal, and you HAVE to know this. There will NEVER be an "incremental" shift from income tax to a federal sales tax. The power to tax is Power Pure. NEVER will Congress or the administration voluntarily give that up. It is literally what they live for.

I won't delve into issues of double taxation (there would be) and lobbyist frenzy (there would be) and anarchic confusion (there would be). I'll just point out that nothing short of total replacement of the income tax (which used to be illegal, by the way) with a sales tax could suffice. If there is some sort of fuzzy, middle of the road transition period like you're talking about, I can GUARANTEE you that we will have BOTH an income tax AND a federal sales tax forever, or at least as long as the Congress could make it happen.

Get y'self a copy of The FairTax Book. Read and learn.

Please show me first, in our Constitution where the Congress of the United States is empowered to tax the individual.

Then we can talk about what form of taxation that should take place in.

Oh and here's a hint for those that don't know, no such power is enumerated to the Congress within the Constitution, unless you happen to be a place of import or export, which I for one am not..... UT OH.....

Quote from: daidalos on October 14, 2013, 11:30:46 AM
Please show me first, in our Constitution where the Congress of the United States is empowered to tax the individual.

Then we can talk about what form of taxation that should take place in.

Oh and here's a hint for those that don't know, no such power is enumerated to the Congress within the Constitution, unless you happen to be a place of import or export, which I for one am not..... UT OH.....

It's not in the original Constitution. The ability to tax an individual according to income was created by the Sixteenth Amendment to the Constitution, signed by our good friend Woodrow Wilson in 1913. It was the beginning of the end.

Mountain Shield, your post, (reply #1) correctly expresses concern for sales taxes affects upon the poor.  Sales taxes are not in themselves regressive but although they can be drafted to be a limited extent be somewhat progressive, their effective tax rates can never be as equally progressive as more progressive income tax rates; but USA's "progressive income tax rates ain't effectively all that progressive.
Many of our income tax's inequities are due to a common root cause, progressive tax rates.  We have tax loop holes created to remedy inequities caused by enactment of prior tax loop holes which can eventually be traced back to progressive tax rates' inequities.
These many special strokes for special folks have effectively reduced the extent of progressive tax rates.  Wage and salary incomes cannot qualify for the more favorable tax treatments granted to other sources of incomes.  Our income tax rates character described as progressive tax rates have been actually eroded and too often are less progressive and more regressive.

If we revenue neutrally reduce the "regular" income tax rates of all tax brackets by the same percentage of taxable income while replacing the lost tax revenue with a general sales tax, we have effectively reduced the COMPARATIVE VALUE of EVERY INCOME TAX LOOP HOLE that reduces or excludes taxes from any favored income source or are an entitlement of any favored segment of our income taxpayers' population.  The mere discussion of transferring our tax revenues in such a manner would drive our more favored taxpayers into an opposing frenzy; they'll hate that concept.

Without providing some compensating considerations for lower earning income tax payers, it's politically and financially unfeasible to discriminately increase lower earners income tax rates or to preferentially decrease rates for higher income earners.
What could be compensating consideration for lower income earners?  Each of those considerations would likely involve an issue that justifies their individual discussion threads.

I'm not aware of what you described as "The system of no income tax and sale tax is in effect in Colombia".  Please elaborate on this topic.  Columbia is rich in mineral wealth.  Petroleum is among their major exports.

My responding delays are exacerbated by my inability to update my Email notification address.  I can no longer access the notification address CPF is now using.

Respectfully, Supposn

Quote from: Supposn on October 17, 2013, 01:24:46 AM
Mountain Shield, your post, (reply #1) correctly expresses concern for sales taxes affects upon the poor.  Sales taxes are not in themselves regressive but although they can be drafted to be a limited extent be somewhat progressive, their effective tax rates can never be as equally progressive as more progressive income tax rates; but USA's "progressive income tax rates ain't effectively all that progressive.
Many of our income tax's inequities are due to a common root cause, progressive tax rates.  We have tax loop holes created to remedy inequities caused by enactment of prior tax loop holes which can eventually be traced back to progressive tax rates' inequities.
These many special strokes for special folks have effectively reduced the extent of progressive tax rates.  Wage and salary incomes cannot qualify for the more favorable tax treatments granted to other sources of incomes.  Our income tax rates character described as progressive tax rates have been actually eroded and too often are less progressive and more regressive.

If we revenue neutrally reduce the "regular" income tax rates of all tax brackets by the same percentage of taxable income while replacing the lost tax revenue with a general sales tax, we have effectively reduced the COMPARATIVE VALUE of EVERY INCOME TAX LOOP HOLE that reduces or excludes taxes from any favored income source or are an entitlement of any favored segment of our income taxpayers' population.  The mere discussion of transferring our tax revenues in such a manner would drive our more favored taxpayers into an opposing frenzy; they'll hate that concept.

Without providing some compensating considerations for lower earning income tax payers, it's politically and financially unfeasible to discriminately increase lower earners income tax rates or to preferentially decrease rates for higher income earners.
What could be compensating consideration for lower income earners?  Each of those considerations would likely involve an issue that justifies their individual discussion threads.

I'm not aware of what you described as "The system of no income tax and sale tax is in effect in Colombia".  Please elaborate on this topic.  Columbia is rich in mineral wealth.  Petroleum is among their major exports.

My responding delays are exacerbated by my inability to update my Email notification address.  I can no longer access the notification address CPF is now using.

Respectfully, Supposn

Roughly 47% of tax filers in the United States pay NO federal income tax whatsoever, OR get a "refund" extracted from taxes paid by others.

Just how "progressive" does a tax have to be to satisfy you?