• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!
  • Welcome to our archives. No new posts are allowed here.

National Sales Tax and Abolish the IRS

danarhea

Slayer of the DP Newsbot
DP Veteran
Joined
Aug 27, 2005
Messages
43,603
Reaction score
26,254
Location
Houston, TX
Gender
Male
Political Leaning
Conservative
I saw someone's proposal in another thread about a flat tax. I would like to start a thread on my favorite tax structure, that of a national sales tax. Please feel free to either argue against this structure, or even add your own ideas.

1) Not sure what the rate would be. That would have to be figured out by the experts - THESE EXPERTS SHOULD BE OUTSIDE OF GOVERNMENT, where idiots reign instead of actual economists. We dont need a Democratic or Republican spin on what the rate would be.

2) Everything would be taxed except food, medicine, rent or mortgage, and education and educational supplies. For corporations and businesses, there would be no tax on the raw materials used to manufacture a product. Everything else would be taxed.

3) In passing a national sales tax, we rid ourselves of one of the most expensive bureaurocracies to ever milk our tax money from us - I am referring, of course, to the IRS. Let them get honest jobs. The IRS would be replaced by a STREAMLINED office of National Comptroller.

4) Before you Liberals start attacking this plan as hurting the poor, let me say a couple of things that might change your mind about a national sales tax.

*****a)The poor do not buy fancy sports cars, yahcts, fancy jewels, racehorses, and the like. Instead of looking for loopholes in the tax code, the wealthy would pay their fair share of taxes. Remember, the poor, as well as everyone else, would not pay taxes on the essentials of life, only the luxuries. For the poorest of the poor, there would be no tax burden at all.

*****b)As it stands many corporations pay no tax at all because of all the loopholes in the system. Under this system, corporations would pay tax on office supplies, computers, and many other things, except raw materials. Since the end user of products would ultimately be paying tax on the finished product, it would be inherently unfair to tax materials twice, hence the exemption for raw materials. Under this system, corporations which have been paying ZERO tax would now be productive members of the taxpaying community by paying their fair share too. What is more fair than that? Be honest now.

I belive these are good arguments for Liberals to join the bandwagon on a Conservative plan (actually Libertarian), and together, we all can do something right for America.

5) I would make an argument for Conservatives, but many already support this idea.

What does everyone think? If you like the idea, you can show it by supporting the Libertarian Party on this issue.
 
Last edited:

Technocratic_Utilitarian

Well-known member
Joined
Oct 3, 2005
Messages
670
Reaction score
0
Location
New Jersey
Gender
Male
Political Leaning
Liberal
You have to be very careful when employing a sales tax, because if you tax the wrong thing, you will very badly hurt the economy. You have to make sure what you are taxing is inelastic, and not elastic.

The last time they tried to raise sales tax on yachts, it was disasterous.

The only way I would be for it would be if you could project that it would provide the same or more revenue as we currently have.
 

danarhea

Slayer of the DP Newsbot
DP Veteran
Joined
Aug 27, 2005
Messages
43,603
Reaction score
26,254
Location
Houston, TX
Gender
Male
Political Leaning
Conservative
Technocratic_Utilitarian said:
You have to be very careful when employing a sales tax, because if you tax the wrong thing, you will very badly hurt the economy. You have to make sure what you are taxing is inelastic, and not elastic.

The last time they tried to raise sales tax on yachts, it was disasterous.

The only way I would be for it would be if you could project that it would provide the same or more revenue as we currently have.
Actually, I want to see less revenue going to the Federal government, and more revenue staying in the states. I am in favor of starving the Federal government, so that it is unable to usurp the soverignty of the states, as it has been doing.
 

Technocratic_Utilitarian

Well-known member
Joined
Oct 3, 2005
Messages
670
Reaction score
0
Location
New Jersey
Gender
Male
Political Leaning
Liberal
States are not sovereign entities. THey have none of the characteristics and powers of sovereign nations.
 

danarhea

Slayer of the DP Newsbot
DP Veteran
Joined
Aug 27, 2005
Messages
43,603
Reaction score
26,254
Location
Houston, TX
Gender
Male
Political Leaning
Conservative
Technocratic_Utilitarian said:
States are not sovereign entities. THey have none of the characteristics and powers of sovereign nations.
That is not what the Constitution says. The 10th Amendment of the Constitution of the United States says that all powers not EXPLICITLY given to the Federal government by the Constitution belong to the states and to the people. In that respect, the scope of soverignty given to the states is defined by law. Statism, that is, the overwhelming power of a central government, might have worked for the old Soviet Empire, but not for the representative republic our forefathers envisioned, in which the scope of Federal government was clearly delineated.
 

shuamort

Pundit-licious
DP Veteran
Joined
Feb 4, 2005
Messages
7,297
Reaction score
1,000
Location
Saint Paul, MN
Gender
Male
Political Leaning
Independent
I agree with the concept for the most part. One minor nitpick is that it would not abolish the IRS. They, or an identical organization, will still need to be around to collect the national sales tax and to make sure that the businesses were correctly reporting and paying the taxes they received.
 

danarhea

Slayer of the DP Newsbot
DP Veteran
Joined
Aug 27, 2005
Messages
43,603
Reaction score
26,254
Location
Houston, TX
Gender
Male
Political Leaning
Conservative
shuamort said:
I agree with the concept for the most part. One minor nitpick is that it would not abolish the IRS. They, or an identical organization, will still need to be around to collect the national sales tax and to make sure that the businesses were correctly reporting and paying the taxes they received.
Already covered. I proposed replacing the IRS with a National Comptroller's office. Of course, there would be personnel to do audits, but the only thing they would be looking for is whether or not taxes were collected and sent to the Treasury Department. There would be no need for tax courts, tax lawyers, and the Comptroller's office would be much smaller than the IRS is, thus saving the taxpayers a lot of money.
 

Technocratic_Utilitarian

Well-known member
Joined
Oct 3, 2005
Messages
670
Reaction score
0
Location
New Jersey
Gender
Male
Political Leaning
Liberal
That is not what the Constitution says. The 10th Amendment of the Constitution of the United States says that all powers not EXPLICITLY given to the Federal government by the Constitution belong to the states and to the people. In that respect, the scope of soverignty given to the states is defined by law. Statism, that is, the overwhelming power of a central government, might have worked for the old Soviet Empire, but not for the representative republic our forefathers envisioned, in which the scope of Federal government was clearly delineated.
What do you mean when you say sovereign, then? Do you mean sovereign within only their own sphere of influence? If then, yes. However, I took you to mean something else. This all depends on what you are talking about when you say sovereign. When I speak of sovereign, I am dealing with the concept of nation-states. US statse are not sovereign nation-states. Federalism employed in our government is not an accurate represenation of the meaning of "sovereign." When dealing with Federalism, the concepts of sovereignty are difficult to deal with. Most of the time, the States and Feds are semi-sovereign. There are 4 major elements that determine whether or not something is sovereign. In order to be a sovereign entity politically, you must meet these general criteria. Every sovereign entity is:

1. Exercises supreme, permanent authority, especially in a nation or other governmental unit.
2. A nation that governs territory outside its borders.
3. Self-governing; independent:

4. The ability to coin money, to have a standing army, to make send troops abroad or engage in foreign wars, to make treaties or alliances, and to regulate interprovincial trade.


State can do none of 4. All of 4 are present completely in the Federal government, which are powers inherent to any sovereign government. Federal level government is "the government."

When dealing with 1, we can easily see that the States are not the sole, supreme, or permanent authority. The Federal government is, since within it's constitutinal powers, it maintains all the attributes (4) of a sovereign government. Via the supremacy clause, any and all federal laws through constitutional support override state laws to the contrary. If we look at the above, and then at the constitution, we see that states are neither completely self-governing, nor are they they permanant authority in the nation.

Definition 2 is also false when looking at the states. The Federal government, as the USA entity, can and do own, operate teritories outside of the many states. No state has any authority over this territory. That's completely federal jurisdiction. A state neither owns, operates, regulates territory outside its borders. A state only has limited control over its own borders, while the Feds do not.
 
Last edited by a moderator:

teacher

DP Veteran
Joined
May 20, 2005
Messages
5,980
Reaction score
30
Location
Nomad.Got a couch,beer,meat,cute daughters,Batman
Gender
Male
Political Leaning
Conservative
National sales tax, aka: consumption tax. Right now it works out to about 23%. For the "less fortunate" the first 10-20k they make they will receive a rebate assuming they spent money on goods and services. Also called a flat tax as put forth in Neil Boortz's new book on the subject. Nothing is exempt. The more you spend, the more you are taxed. If you can find a way to live without spending money, you slide by. Even those of dubious income (drug dealers) still have to spend money. And for you libs that want to punish the rich, they spend WAY more money, so they pay more tax. Since it abolishes the income tax it will lure foreign business here as a tax shelter. And on and on. It's biggest drawback is it's too good an idea for government to use.
 

Iriemon

DP Veteran
Joined
Aug 10, 2005
Messages
19,405
Reaction score
2,187
Location
Miami
Gender
Undisclosed
Political Leaning
Undisclosed
We recently discussed a similar plan (the fair tax) in this thread:

http://debatepolitics.com/showthread.php?t=2727

I'm not going to regurgitate the arguments there, but will elabortate on points made if anyone wants to discuss issues. In sum, these plans effectively push the tax burden on the middle classes, because the wealthier tend to invest more (which is not taxed). I also doubt that after congress gets done with it it will be any simpler or more efficient. I am all for a simpler tax code that get rid of tax loopholes and advantages. But an income tax doesn't have to be any more complicated than a sales tax.
 
Last edited:

SouthernDemocrat

Pragmatist
DP Veteran
Joined
Jun 23, 2005
Messages
22,559
Reaction score
13,775
Location
KC
Gender
Male
Political Leaning
Moderate
The biggest problem that see with it is that two thirds of the economy is powered by consumption so by implementing a massive sales tax, essentially you are placing a huge drag on consumption and thus on economic growth.
 

Technocratic_Utilitarian

Well-known member
Joined
Oct 3, 2005
Messages
670
Reaction score
0
Location
New Jersey
Gender
Male
Political Leaning
Liberal
And for you libs that want to punish the rich, they spend WAY more money, so they pay more tax. Since it abolishes the income tax it will lure foreign business here as a tax shelter. And on and on. It's biggest drawback is it's too good an idea for government to use.
Liberals don't want to punish the rich; that's not the point. The rich make more, so they ought to pay more. They can afford it. It's not a punishment.
 

SouthernDemocrat

Pragmatist
DP Veteran
Joined
Jun 23, 2005
Messages
22,559
Reaction score
13,775
Location
KC
Gender
Male
Political Leaning
Moderate
teacher said:
National sales tax, aka: consumption tax. Right now it works out to about 23%. For the "less fortunate" the first 10-20k they make they will receive a rebate assuming they spent money on goods and services. Also called a flat tax as put forth in Neil Boortz's new book on the subject. Nothing is exempt. The more you spend, the more you are taxed. If you can find a way to live without spending money, you slide by. Even those of dubious income (drug dealers) still have to spend money. And for you libs that want to punish the rich, they spend WAY more money, so they pay more tax. Since it abolishes the income tax it will lure foreign business here as a tax shelter. And on and on. It's biggest drawback is it's too good an idea for government to use.
Ok first its a consumption tax, so that would present a huge drag on economic growth being that 2/3s of the economy is consumption. Also, and here is the biggest problem with it. It would make retiring almost impossible. If you are on a fixed income drawing off of social security and an IRA, you pay very little in income taxes anyway because you are living on savings. Because of this, any inflation is your biggest enemy and a 23% tax on consumption is probably not something you accounted for in your retirement planning.

Economics and progressive taxation is not about punishing anyone, its about pragmatism. The government takes a certain amount of money to meet its obligations so the point to taxation is to have the system that puts the least amount of economic drag on the economy. Being that we have the strongest economy in the history of civilization, it would seem that we have the best system right now. That is not to say it should not be simplified, but on balance it is a better system of taxation than any other system that has been proposed.
 
Last edited:
Top Bottom