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Easy fix for IRS corruption

Wehrwolfen

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By Matt Barber
06/02/13


Sir John Dalberg-Acton famously observed, “Power tends to corrupt, and absolute power corrupts absolutely.” No federal agency enjoys more power than the “absolute power” wielded by the Internal Revenue Service. It’s little wonder, then, that under this power-drunk Obama regime, the IRS has become “corrupted absolutely.” It’s become the hammer to this president’s favorite nail: political dissent.

The bureaucratic cat’s out of the bag, and the evidence is undeniable. The Obama IRS has been illegally targeting conservative, Christian and Jewish groups and individuals for political retaliation, intimidation and, ultimately, destruction. These revelations have spurred calls for criminal prosecution and even impeachment. Still, little has been said about how to prevent such Stalinist abuses of power in the future. Advertisement

We’ve been over-thinking the problem. Sometimes complicated questions come with easy answers. I wish I could take credit for it, but while I was participating in a recent meeting in Washington, D.C., Judson Phillips, founder of Tea Party Nation, hit on the simple solution. “The Constitution is a great place to go in order to rein in the rampant and repeated abuses at the IRS,” he suggested. Namely, the Fourth Amendment, which guarantees the following:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

No individual – and especially no federal agency – is above the law. Regrettably, and largely through both citizen and government acquiescence, the IRS has been brandishing arbitrary and extra-constitutional authority, unchecked, for well over a century.

[Excerpt]

Read more:
MATT BARBER: Easy fix for IRS corruption - Your Houston News: Blogs

Why should the IRS have so much power over the American PEOPLE when our Constitution and it's Amendments expressly prohibit such actions? Can we look to the actions of Woodrow Wilson and his Progressive cabal for the answers?
 

specklebang

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I read the article. I couldn't figure out the point though. What is this guy talking about?

I've been audited 4 years worth. In one of my audits, they did a "lifestyle check" where the spied on my store and presumably me to see if I lived as per my income. They're the ones who told me later. I had a change in tax of $40 so they said not to bother paying it. I wasn't offended by any of this and they were never impolite. But without the possibility of audirt, I would lie my head off when I filed my taxes. Honor system? Is that a joke?

So really, should we disband the IRS and just go 100% honor system? It's OK by me but I see problems.....
 

douglas

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The easiest fix would be to just abolish the income tax itself. Fairtax or some other kind of sales tax could replace the income tax, completely removing the point of having an IRS. There is no fix to IRS corruption, since the basic idea of an income tax is corrupt. There are other solutions, but they typically involve socialism.
 

CalGun

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It would be beneficial to terminate the agency. Not allow any of them to work for our Goverment again, and impose a set of simple and fair taxes on sales, earnings, and wealth. Create a new agency from scratch to enforce the simple 1 page code.
 

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Please propose your vision of simple and fair taxes on sales, earnings and wealth. Nobody likes the current tax codes except the few thousand people who rigged it in the first place. But if we accept the concept of keeping a government and we accept the concept that taxes are how we finance government, then how will your one page system operate.

I'm just trying for an intellectual response. I'm not disputing you. I've offered up tax plans that nobody liked very much so I'd like to hear yours instead.




It would be beneficial to terminate the agency. Not allow any of them to work for our Goverment again, and impose a set of simple and fair taxes on sales, earnings, and wealth. Create a new agency from scratch to enforce the simple 1 page code.
 

CalGun

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I've offered them up before. Few like them. I've always premised that any tax over a certain rate is to be avoided by the people. If you seek one simple tax at a rate needed people will do whatever they must to avoid and eliminating tax avoidance is necessary.

1) income taxes I would apply only to earned income and use them only for social security, Medicare, and unemployment insurance. I would not cap the income on which this is paid. I would would not let this exceed 12% and believe earned income in the US is about $10 trillion so it raises $1.2 trillion which is short of what is needed for these programs.

2) a sales tax of 8% on all goods and services that contribute to GDP would raise $1.2 trillion. There would be no corporate taxes in my plan and this tax would apply to the gross sales instead of net incomes. It is passed to consumers, but so is everything.

3) a wealth tax is like a property tax. I think we could exempt $250,000 or maybe $500,000 in wealth per person and apply 1/2 of 1% to the balance of a persons holdings. People own corporations so here is where they get taxed. I've seen a few estimates that with a $500,000 exemption per person this would raise $600 billion.

I think we apply energy / fuel taxes to clean domestic energy programs, and tariffs to local infastructure.



Please propose your vision of simple and fair taxes on sales, earnings and wealth. Nobody likes the current tax codes except the few thousand people who rigged it in the first place. But if we accept the concept of keeping a government and we accept the concept that taxes are how we finance government, then how will your one page system operate.

I'm just trying for an intellectual response. I'm not disputing you. I've offered up tax plans that nobody liked very much so I'd like to hear yours instead.
 

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I've offered them up before. Few like them. I've always premised that any tax over a certain rate is to be avoided by the people. If you seek one simple tax at a rate needed people will do whatever they must to avoid and eliminating tax avoidance is necessary.

1) income taxes I would apply only to earned income and use them only for social security, Medicare, and unemployment insurance. I would not cap the income on which this is paid. I would would not let this exceed 12% and believe earned income in the US is about $10 trillion so it raises $1.2 trillion which is short of what is needed for these programs.

2) a sales tax of 8% on all goods and services that contribute to GDP would raise $1.2 trillion. There would be no corporate taxes in my plan and this tax would apply to the gross sales instead of net incomes. It is passed to consumers, but so is everything.

3) a wealth tax is like a property tax. I think we could exempt $250,000 or maybe $500,000 in wealth per person and apply 1/2 of 1% to the balance of a persons holdings. People own corporations so here is where they get taxed. I've seen a few estimates that with a $500,000 exemption per person this would raise $600 billion.

I think we apply energy / fuel taxes to clean domestic energy programs, and tariffs to local infastructure.
I don't like your tax idea one bit. Your taxing people TWICE with the wealth tax. Government gets enough. Specklebangs transaction tax is vastly superior to what you propose as well as MUCH more efficient and MUCH less likelihood of evasion. Property taxes should be outlawed in my opinion. I despise them. They are evil and promote spending of saving. And NO they are NOT even remotely necessary.
 

specklebang

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I have a question about this part:
People own corporations so here is where they get taxed.
Lets say I own 1000 shares of Apple and its worth $400 a share which = $400K. What am I taxed on? The market value of a certain date (e.g. 12/31/20??)? Lets assume thats above and beyond the $500K exemption.




I've offered them up before. Few like them. I've always premised that any tax over a certain rate is to be avoided by the people. If you seek one simple tax at a rate needed people will do whatever they must to avoid and eliminating tax avoidance is necessary.

1) income taxes I would apply only to earned income and use them only for social security, Medicare, and unemployment insurance. I would not cap the income on which this is paid. I would would not let this exceed 12% and believe earned income in the US is about $10 trillion so it raises $1.2 trillion which is short of what is needed for these programs.

2) a sales tax of 8% on all goods and services that contribute to GDP would raise $1.2 trillion. There would be no corporate taxes in my plan and this tax would apply to the gross sales instead of net incomes. It is passed to consumers, but so is everything.

3) a wealth tax is like a property tax. I think we could exempt $250,000 or maybe $500,000 in wealth per person and apply 1/2 of 1% to the balance of a persons holdings. People own corporations so here is where they get taxed. I've seen a few estimates that with a $500,000 exemption per person this would raise $600 billion.

I think we apply energy / fuel taxes to clean domestic energy programs, and tariffs to local infastructure.
 

CalGun

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Actually I think the formula would be the market value of a certain date. Also let's say you bought some during the year or sold some. You would have owned it x/365 days and you could apply it to the average value during those days.

Please note I prioritize a balanced budget very highly. I think our debt is the biggest threat to our nation. And I don't believe there is a snowballs chance in hell for meaningful cuts to services we have grown accustomed too. My theory raises about $3 trillion which is short but it encourages wealth, growth and spending which will enhance revenues on all fronts. We just have to freeze spending as much as possible until growth reaches a balanced sum.


I have a question about this part:
People own corporations so here is where they get taxed.
Lets say I own 1000 shares of Apple and its worth $400 a share which = $400K. What am I taxed on? The market value of a certain date (e.g. 12/31/20??)? Lets assume thats above and beyond the $500K exemption.
 

CalGun

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I have great wealth, most of it in farm land, but I make very little taxable income. In fact I've had less than $5k personal income the last 4 years and I use proceeds from leased farmland to expense buying more avoiding the corp income tax fully. So why should I enjoy $4 million in wealth and pay almost no taxes while our govt protects my wealth and provides me a vast number of services?


I don't like your tax idea one bit. Your taxing people TWICE with the wealth tax. Government gets enough. Specklebangs transaction tax is vastly superior to what you propose as well as MUCH more efficient and MUCH less likelihood of evasion. Property taxes should be outlawed in my opinion. I despise them. They are evil and promote spending of saving. And NO they are NOT even remotely necessary.
 

specklebang

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So, would your taxable worth be an aggregate total of everything you owned as of that date? All your stocks, cash, houses, cars etc.? Would you have to report all this annually and account for depreciation? On the Aple shares, would the value be calculated as an average during the time period you held it or would it be market value as of that certain date? What about a coin or gun collection. Would those be part of your worth for tax purposes? If so, would the reportable amount be the purchase price or the current market value?

Let me use an example. I buy a $100K Rolex watch in June. At the end of the tax year, do I report that watch or by buying it have I reduced my taxable burden by going out of cash and into Rolex?


Actually I think the formula would be the market value of a certain date. Also let's say you bought some during the year or sold some. You would have owned it x/365 days and you could apply it to the average value during those days.

Please note I prioritize a balanced budget very highly. I think our debt is the biggest threat to our nation. And I don't believe there is a snowballs chance in hell for meaningful cuts to services we have grown accustomed too. My theory raises about $3 trillion which is short but it encourages wealth, growth and spending which will enhance revenues on all fronts. We just have to freeze spending as much as possible until growth reaches a balanced sum.
 

CalGun

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I don't believe it's essential for personal belongings to be reported or estimated unless they are accumulated as an investment. Homes, real estate, stocks, notes, bonds and other cash investments yes. It would encourage investment if you needed to pay a little each year to keep it.

Valuation should be on what it's worth ( stocks I'm speaking too mostly). I think it would be feasible in this computer age to put an average value on a share of stock for a year. A major negative adjustment would be accounted for this way. With no corporate income taxes and their burdens of avoidance eliminated their shares should do well. Please note a business, a partnership or similar small corporation and it's assets would be applied to its owners worth.

A person with 1,000,000 in net asset value gets a $500,000 exemption then pays $2500 for the next $500,000. If such a person makes 100,000 a year they pay probably 25% now incl social security et all. In my plan they pay 12%, on what they spend 8%, and $2500 on their wealth. It's about the same without the hassles of deductions today, and if their wealth ncreases we all win.


So, would your taxable worth be an aggregate total of everything you owned as of that date? All your stocks, cash, houses, cars etc.? Would you have to report all this annually and account for depreciation? On the Aple shares, would the value be calculated as an average during the time period you held it or would it be market value as of that certain date? What about a coin or gun collection. Would those be part of your worth for tax purposes? If so, would the reportable amount be the purchase price or the current market value?

Let me use an example. I buy a $100K Rolex watch in June. At the end of the tax year, do I report that watch or by buying it have I reduced my taxable burden by going out of cash and into Rolex?
 

specklebang

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Hope you don't mind my worrying this bone a little.

If you don't include personal property, what prevents you and me setting up a deal. I sell you a Rolex for $500K the day before tax cutoff. Now you don't have the cash and you don't have to report the Rolex. One day after, I buy back the Rolex with a fee for my efforts.

Even with computers, it's hard to ascertain values (on other than stocks). For example, house values are going up right now. How will you value my house? The average value during the year or the value on tax day? Who determines the actual value? The last sale? The current price on tax day isn't really known.

I'm not trying to sandbag you but I think you'll find just how complex taxes really are and how easy they are to evade, particularly those with a lot of resources. That's why laws tend to become rather lengthy since all these matters must be addressed.

Sales tax is so regressive that it's already harming our society. Warren Buffet and I theoretically could buy the same item for $100. We both pay $8 in tax but that $8 might mean a lot more to me than to him. Our stomachs will be equally full though.

You'll still need an IRS to verify this data. I've thought about this topic a lot and Speckle-tax was the best I could do. Every other strategy was either regressive or worse yet, subjective (valuations).

Just a conversation....



I don't believe it's essential for personal belongings to be reported or estimated unless they are accumulated as an investment. Homes, real estate, stocks, notes, bonds and other cash investments yes. It would encourage investment if you needed to pay a little each year to keep it.

Valuation should be on what it's worth ( stocks I'm speaking too mostly). I think it would be feasible in this computer age to put an average value on a share of stock for a year. A major negative adjustment would be accounted for this way. With no corporate income taxes and their burdens of avoidance eliminated their shares should do well. Please note a business, a partnership or similar small corporation and it's assets would be applied to its owners worth.

A person with 1,000,000 in net asset value gets a $500,000 exemption then pays $2500 for the next $500,000. If such a person makes 100,000 a year they pay probably 25% now incl social security et all. In my plan they pay 12%, on what they spend 8%, and $2500 on their wealth. It's about the same without the hassles of deductions today, and if their wealth ncreases we all win.
 

CalGun

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I appreciate a good conversation. Obviously it would still be a crime to intentionally and willfully avoid the taxes. If the penalty was severe enough would someone take a chance to save $2,000 with that Rolex? I don't think someone worth millions would want to risk that.

Yes sales taxes are regressive, but by eliminating the corp income tax it's far simpler. I suggest this because I think it would help us move a little off consumerism but not all the way off like the "fair tax" initiative which I oppose. Also I like that everyone contributes to society and this way everyone would.

I'd like our tax structure to raise the money we spend as quickly as possible. Eliminating our annual deficit is important in my book. If the poor don't pay, thru sales tax, they are actually the ones who will suffer the consequences of failure the most.


Hope you don't mind my worrying this bone a little.

If you don't include personal property, what prevents you and me setting up a deal. I sell you a Rolex for $500K the day before tax cutoff. Now you don't have the cash and you don't have to report the Rolex. One day after, I buy back the Rolex with a fee for my efforts.

Even with computers, it's hard to ascertain values (on other than stocks). For example, house values are going up right now. How will you value my house? The average value during the year or the value on tax day? Who determines the actual value? The last sale? The current price on tax day isn't really known.

I'm not trying to sandbag you but I think you'll find just how complex taxes really are and how easy they are to evade, particularly those with a lot of resources. That's why laws tend to become rather lengthy since all these matters must be addressed.

Sales tax is so regressive that it's already harming our society. Warren Buffet and I theoretically could buy the same item for $100. We both pay $8 in tax but that $8 might mean a lot more to me than to him. Our stomachs will be equally full though.

You'll still need an IRS to verify this data. I've thought about this topic a lot and Speckle-tax was the best I could do. Every other strategy was either regressive or worse yet, subjective (valuations).

Just a conversation....
 

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I have great wealth, most of it in farm land, but I make very little taxable income. In fact I've had less than $5k personal income the last 4 years and I use proceeds from leased farmland to expense buying more avoiding the corp income tax fully. So why should I enjoy $4 million in wealth and pay almost no taxes while our govt protects my wealth and provides me a vast number of services?
Your plan quite frankly in a nutshell is to take the current system essentially and add more taxes and reporting requirements. You think our system sucks now? If you are a farmer you must have a finance guy to keep you out of financial trouble. Your plan essentially makes it harder to not only acquire wealth but to keep it as well. The rich get richer and have less competitors to boot. I would think that EVERYONE having an opportunity to acquire and keep wealth should be the goal of the tax policy in addition to funding the government.

A financial transaction tax is far simpler to implement and far easier to insure compliance. And its progressive even though its one rate. That means its fair AND progressive. Both sides of the aisle win. If you tax the MOVEMENT of money very lightly you get the money you need with very little cost with maximum compliance. Maximum compliance is a assured because its just cheaper to pay the tax then to avoid it. Cost is minimized because you are taxing a few entities which are already on government regulation, which is much easier to keep track of and using them essentially as your tax collection force. Progressivity is inherent in the tax because poor people don't have nearly as many or the level of transactions as a wealthy person would. The financial transaction tax would also by its nature capture foreign financial transactions as well. 2 trillion dollars a day pass these shores. Another side benefit would be that day trading activity would go down a bit to preserve their capital.

A transaction tax is essentially what Specklebang proposes. I think it makes a great deal of sense.
 
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CalGun

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Please explain to me how not taxing ones first $500,000 in wealth makes it harder on people to build wealth? How displacing 13/18% of earned income taxes for 8% in sales tax hurts?


Your plan quite frankly in a nutshell is to take the current system essentially and add more taxes and reporting requirements. You think our system sucks now? If you are a farmer you must have a finance guy to keep you out of financial trouble. Your plan essentially makes it harder to not only acquire wealth but to keep it as well. The rich get richer and have less competitors to boot. I would think that EVERYONE having an opportunity to acquire and keep wealth should be the goal of the tax policy in addition to funding the government.

A financial transaction tax is far simpler to implement and far easier to insure compliance. And its progressive even though its one rate. If you tax the MOVEMENT of money very lightly you get the money you need with very little cost with maximum compliance. Maximum compliance is a assured because its just cheaper to pay the tax then to avoid it. Cost is minimized because you are taxing a few entities which are already on government regulation, which is much easier to keep track of and using them essentially as your tax collection force. Progressivity is inherent in the tax because poor people don't have nearly as many or the level of transactions as a wealthy person would. The financial transaction tax would also by its nature capture foreign financial transactions as well. 2 trillion dollars a day pass these shores. Another side benefit would be that day trading activity would go down a bit to preserve their capital.
 

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I appreciate a good conversation. Obviously it would still be a crime to intentionally and willfully avoid the taxes. If the penalty was severe enough would someone take a chance to save $2,000 with that Rolex? I don't think someone worth millions would want to risk that.

Yes sales taxes are regressive, but by eliminating the corp income tax it's far simpler. I suggest this because I think it would help us move a little off consumerism but not all the way off like the "fair tax" initiative which I oppose. Also I like that everyone contributes to society and this way everyone would.

I'd like our tax structure to raise the money we spend as quickly as possible. Eliminating our annual deficit is important in my book. If the poor don't pay, thru sales tax, they are actually the ones who will suffer the consequences of failure the most.
Your assessment of the problem is essentially correct, its your solution that I have problems with. This problem can be solved MUCH more efficiently and fairly for ALL sides. And there would be LESS headaches to boot. Why should a individual or a typical nonfinancial business have to worry about the tax consequences of what they do? That's foolish. Its takes time and energy from people, whose energies are better spent doing what it is they do best.
 

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Please explain to me how not taxing ones first $500,000 in wealth makes it harder on people to build wealth? How displacing 13/18% of earned income taxes for 8% in sales tax hurts?
Because of inflation and time conspire to make that money worth less. That's why. If you want to do a sales tax, why not just take the next step and do a financial transaction tax? Thereby further eliminating who has to report and pay and putting that burden on the institutions best able to take it and making the collection process that much cheaper. Tell me why someone should have to jump though bunch of hoops just to pay a fricken tax? Should taxes be simple to figure and easy to know if you owe?
 

CalGun

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I'm sorry, but I've collected sales tax for the state of CA on and off for 30 years. It's not that hard. I don't see that being difficult. As for a transaction tax? That is pretty much the same thing is it not? I'm not opposed to doing it that way at all id it raises enough funds and is evenly distributed among the population and it's wealth as much as possible.


Because of inflation and time conspire to make that money worth less. That's why. If you want to do a sales tax, why not just take the next step and do a financial transaction tax? Thereby further eliminating who has to report and pay and putting that burden on the institutions best able to take it and making the collection process that much cheaper. Tell me why someone should have to jump though bunch of hoops just to pay a fricken tax? Should taxes be simple to figure and easy to know if you owe?
 

specklebang

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I'm going to give you a better response later because I have to run out for a few minutes. Will you take a look at the OP just for the hell of it. Who knows, maybe I'll get a convert (or not:))
http://www.debatepolitics.com/government-spending-and-debt/138622-speckle-tax-final-solution.html


I appreciate a good conversation. Obviously it would still be a crime to intentionally and willfully avoid the taxes. If the penalty was severe enough would someone take a chance to save $2,000 with that Rolex? I don't think someone worth millions would want to risk that.

Yes sales taxes are regressive, but by eliminating the corp income tax it's far simpler. I suggest this because I think it would help us move a little off consumerism but not all the way off like the "fair tax" initiative which I oppose. Also I like that everyone contributes to society and this way everyone would.

I'd like our tax structure to raise the money we spend as quickly as possible. Eliminating our annual deficit is important in my book. If the poor don't pay, thru sales tax, they are actually the ones who will suffer the consequences of failure the most.
 

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The easiest fix would be to just abolish the income tax itself. Fairtax or some other kind of sales tax could replace the income tax, completely removing the point of having an IRS. There is no fix to IRS corruption, since the basic idea of an income tax is corrupt. There are other solutions, but they typically involve socialism.
In this system, who does the business send their sales tax collection to if not the IRS? What is there to prevent a business from understating it's sales in order to keep the sales tax collected for itself?
 

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In this system, who does the business send their sales tax collection to if not the IRS? What is there to prevent a business from understating it's sales in order to keep the sales tax collected for itself?
It would go to the treasury. Essentially, we'd have all the same agencies and paperwork for Sales tax that we already have, and we'd have the same problems with under-reported sales tax. The issue is not what problems this plan has, but all the problems it fixes; there's no such thing as a perfect tax system. Most economist think that this would have an effect on slowing the growth of big government and taxes. Check out Americans For Fair Taxation if you hadn't already. They probably do a better job at explaining it than me.
 

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Actually I think the formula would be the market value of a certain date. Also let's say you bought some during the year or sold some. You would have owned it x/365 days and you could apply it to the average value during those days.

Please note I prioritize a balanced budget very highly. I think our debt is the biggest threat to our nation. And I don't believe there is a snowballs chance in hell for meaningful cuts to services we have grown accustomed too. My theory raises about $3 trillion which is short but it encourages wealth, growth and spending which will enhance revenues on all fronts. We just have to freeze spending as much as possible until growth reaches a balanced sum.
How would a 8% national sales tax encourage spending? That's an 8% tax hike on 100% of most peoples incomes so they will be spending 8% less.
 

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It would go to the treasury. Essentially, we'd have all the same agencies and paperwork for Sales tax that we already have, and we'd have the same problems with under-reported sales tax. The issue is not what problems this plan has, but all the problems it fixes; there's no such thing as a perfect tax system. Most economist think that this would have an effect on slowing the growth of big government and taxes. Check out Americans For Fair Taxation if you hadn't already. They probably do a better job at explaining it than me.
A tax on spending is the absolute WORST way for a consumer economy to collect revenue. We want to encourage spending, not discourage it by taxing. The money we want is income NOT spent. People that are saving 80% of their income are the real drag on our economy.
 

CalGun

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Disagree for two reasons.

1) it will enable business to stop spending on tax avoidance and paying taxes. That alone will probably equal between 5-10% in the consumers, and

2) it will greatly reduce income taxes providing more disposable income


How would a 8% national sales tax encourage spending? That's an 8% tax hike on 100% of most peoples incomes so they will be spending 8% less.
 
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