WTF? A 30% sales tax? End the IRS? Who's the wacko in Congress with this idea?

It's a rather fair trade off when you consider all the rich from other countries who come here to spend their money and don't pay the taxes back home for what they buy here. Not to mention the overall tourist trade that we have going on. And given what you've said yourself about the VAT, there is a good chance that they would pay more in taxes there than here, especially since they are embedded all along the way.

 

And you are making non-sequitur argument to the topic at hand.

 

Actually, it is. It is based literally on the AGI of your tax return to determine whether or not you meet or exceed the threshold of the poverty line.

Actually they are. The bill literally says all goods and services. It even goes on to explain explicitly that it is going to be tax as a taxable service, especially federal service. Any employee and their wages would also be subject to the tax. It is in Title 2, section one of said bill.

Not really. Import tariffs are complex and we have free trade agreements with over 100 countries that I know of are quite literally zero. But it is more complex than you think and why it only accounts for less than 1% of all total revenues collected. To give you an example, we literally collected $80 billion dollars in tariff revenue. And our total inlays for 2021 were about $4.03 trillion dollars according to Department of Treasury Data.

Again, under the bill, it literally says "all goods and services." It gives some exceptions, but wages are not on that list in any way whatsoever.

Technically with the bill and the wages they receive. Again, the bill literally taxes wages as a service subject to the sales tax if the wages were received here.

Income tax and sales tax are two separate tax systems and calculated differently. Under state law, about one-third of all final goods are taxed at the sales tax level, namely clothes, fast good, prepared food, and a few others. This bill, it will now include the rest of the two-thirds like cars and home purchases to some extent. It even includes rental payments and other such items other than intangiblle properrty like royalties and copyright fees that must be paid.

For starters, retailers including the National Retail Association is against this bill. That should tell you something.

It is only goods and services in the United States. This is a regional tax system. Income, at least here and in three other countries, tax on their worldwide income no matter where the source is derived. It gets complicated with e-commerce and products that are housed in states with a sales tax are usually taxed if you purchase said products online. With this bill, it gets even more complicated because it will shift the starting from here in the US to overseas with ease of transport into the US to minimize the tax collection.

 

The thread topic is quite a bit broader than you seem to think.

 

IF?
What does this proposal eliminate from taxes?

 

No everyone does not become the collector. The retail operations do, and there will be a lot less of them to track than there is under the current income tax system.

 

What ever are you talking about? Only 5 states currently do not use sales tax already. Which means that the system is already in place, except in those 5 states. The states already do whatever it is that they need to do to get the taxes owed by sales tax. There won't be any tax forms for any citizen to fill out or use. If they don't already do it for the state sales taxes, why would they for the federal?

 

you are of the belief that it does not tax wages. It does. It is literally in the damn bill and wages are subject to the tax. I think you are trying to think that it will work like a state sales tax which does not tax wages. But if you read the damn bill. The other problem you have is you don't understand how income taxes work either.

No misinformation. I would suggest you read the entire bill, all 118 pages of it. Again, when it says "all goods and services" and then excludes only a few items such as business investments, intangible propertty, and used properly generally, then that says it all. Medicine would be taxed. Any government subsidies would be taxed. Retirement income won't generally f it is considered investment income. Part of the tax will fund health insurance and part will be designated to the general use fund. The part designated for thealth insurance is essentially medicare and it says nothing about social security

No, only in this bill, it is only for the poor with the prebate set forth by the family size and the state you live in.

I am well aware which means the 30% sales tax is equivalent to a 23% income tax, at least that is how the explain it. However, that is not how sales taxes work in the real world. And yes, you are getting your information from Fairtax.org. And even Grover Norquest does not like this bill. That should really tell you something.

 

That may be your opinion, but you are in the minority here. And for most, it is not "fair trade" whatsoever. But the point is moot really now, A majority of the rank and file of the GOP in the house do not like this bill at all and hence it will die in committee by terms end.

 

Actually, they do. If you have "taxable property" which could mean services or goods, then you must collect the tax and remit it to the state. The state would then remit it to the US government. States can decide whether or not to remit it if they feel that they don't like what the federal government is doing. This happened in the Articles of Confederation where the states did not do this for one reason or another and kept it to pay their bills.

It is painfully obvious you don't know the history or taxation in general on how things work. Just regurgitate what you found on the website without any critical thinking or reading skills.

 

That is more of an apocalypse movie theme than anything else. And since we have not learned our lessons in the past, what makes you think we will learn our lessons in the future?

 

As Margaret Thatcher pointed out: Sooner or later you run out of other peoples' money.

 

Actually, it does matter. Not only will you be putting a state sales tax on items, but you will also then have to add the federal sales tax on top of that as well.

Actually, according to the bill, they would. All states with a state income tax go by the federal income tax return, namely your Adjusted gross income. From there, they either add or subtract those items to be taxed a the state level. Without a federal income tax, the states would have no choice but to eliminate their state income tax AND then make up the revenue for by increasing their property and/or sale taxe rates to make up the difference.

 

We Americans have always found genius ways to take other people's money in one form or another. By the time the Iron Lady was PM, the English empire dwindled by 80%, especially after WW2 and had to make up the difference at home.

 

None of which makes any difference.
Failure to raise enough revenue to pay our expenses will ultimately produce a negative result.

 

Wyoming 4%
Washington 6.5%
Texas 6.25%
Tennessee 7%
South Dakota 4.5%
Nevada 6.85%
Florida 6%

Meanwhile in states with income taxes as well:
Arkansas 6.5%
California 7.25%
Connecticut 6.35%
Idaho 6%
Illinois 6.25%
Indiana 7%
Iowa 6%
Kansas 6.5%
Kentucky 6%
Maryland 6%

I could go on. Of all the states that have a sales tax, only 19 are below 6%. Colorado is the lowest at 2.9%. California is the highest at 7.25% (plus income tax), and they are followed with 7% each by Indiana, Mississippi, Rhode Island and Tennessee. 4 of the 5 largest sales tax states also have income tax as well. out of the 7 with no income tax 2 are below average for the country, and 2 are above.

So no, with 2 exceptions, states with no state income tax do not have higher sales tax. They run the national mean. BTW, for the curious the average across the 45 states that have sales tax (didn't count DC) is 5.59%. So if you want to go by that standard, 26 states have an above average sales tax

 

There may be no state sales tax, but there are local sales taxes in play. Alaska is one of those states. Nevada has both state and local and that combined rate is 17% .

It is not a question of the "system is already in place here." You obviously never had to deal with sales taxes or how they are remitted and why. You also never had to deal with income taxes. Yes, the states would collect all federal national retail sales taxes on top of whatever sales tax they impose at the state and local levels. Then the state will decide to send the remittance to the federal government or not. And if they don't, there are no consequences in the bill. On top of that, the National retail level is far more inclusive on what is actually taxed. It is the exact opposite of how sales taxes at the state and local level are imposed. At the federal level, it is more complete than at the state level.

Your problem is you are regurgitating the same info on the website trying to sell you this idea yet have no clue how true sales taxes actually work at the state level or how federal taxes work at the federal level.

 

The only thing you are doing is looking at the state sales tax rates. You are forgetting those local sales tax rates.

So, here is your quiz, In Texas, which number is more accurate on the amount of sales tax one will pay on average in Texas? Is it 6.25% or 8.25%?

 

Actually the other way around. They will be receiving a prebate as if they were in the 23% bracket, even though they were in a lower income tax bracket. So that is more money than if we were to convert their income tax to a sales tax rate. But in the end it's still a 0 sum game, before we take into account sales and resale shopping. The poverty level is figured as it already is being done, and that allows us to calculate how much one would spend on tax for the basic necessities of living, and hand that money to them to counter the taxes at the register. What rate one was before is irrelevant, because the plan has built into it the equivalent of the individual and child deductions, in the form of the prebate.

 

You are leaving out that the tax compnents that were embedded along the line are no longer there, meaning that the food, gas and everything else are already less. Meaning that $1000 is now closer to $770 (rounded numbers for example sake) and then the sales tax would add $230, for the same $1000 spent before. We're just shifting where the tax is collected and putting it all into one highly visible place.

Yes it is, and that is the reason that when the Daimler Chrysler merge happened, the company moved to Germany where the business tax burden was lower. So not only are we not increasing our taxes here (just shifting the source), we are lowering the business tax burden, becoming an attraction to businesses. And currently, those tourists to the US are already paying the tax. They just don't see it, any more than they do in their country, with their VAT. Remember our prices won't significantly change since we are removing the tax from the points along the process, lowering cost there, to have it on the end.

 

Sorry, but I have to nip this one in the bud. HR25 in and of itself, will not eliminate poverty. All it will do is change the method by which the people at or below the poverty line, are relieved of their burden for basic necessities of living. With income tax, this is handled by the personal exemptions and other credits such as EITC. Under the Fair Tax, it's handled by the prebate, and the fact that people can streach it out further taking advantages of sales, and using resale shopping, such as Goodwill and Salvation Army stores, among others.

While @Alwayssa and I are on different ends of this topic, I don't stand for strawman arguments, intentional or not, even when it's directed at the opposition. She (?) is claiming that because of the federal sales tax and its supposed increase in prices, that foreigners who might have come here before and pay those taxes via the embedded cost along the way, will now go elsewhere and not spend their tourist money with us.

More like shifted in focus than reduced. Still plenty of other accounting work out there, and more to come if the 0 business tax burden attracts more businesses to the US.

 

We already put state city and county sales tax on items and teh State income tax if the state has one has nothing to do with a federal sales tax. And you will have the money that was previous withheld federally NOW in your pocket.

Some use the federal some don't my by AGI is different on my state than my federal forms. States DO NOT have to end their income tax if the Feds move to a NST, where do you get this stuff?

 

The entities sending W2s and 1099s to the IRS as required by law.

 

That is not how the prebate will work according to the bill. Those who are in the poverty line will get a prebate equal to the amount of taxes they have to pay under the poverty threshold. Those whose incomes are above the amount will not get a prebate, not even the first amount of dollars equal to the poverty line. So, if you are in the poverty threshold, you get it. If not, you don't.

The problem with the prebate is twofold. First, they are using the poverty threshold of a single person only, and second they are using 2022 info as their starting base Nothing in the bill does anything from that point. Nothing at all.

 

I am not leaving out anything. There is really no other tax component when it comes to any type of retail sales tax. Any taxable item is taxed at that rate, period. Don't matter if you spent $100 on that taxable item or $10000 on that taxable item. The only thing before the item is taxed is whether the exemption from salses taxes from qualified 501c3 will apply. That is it. And you must show that certificate with the certificate number along with the entity's name and EIN for that to apply.

A merger is not the same here. A merger is simply two legal entities becoming one. Usually, there is the dominant entity and the subservient entity. And Christler was the subservient entity. It was either the merger or Chapter 7 Bankruptcy. So, they merged. But the merger does not change the fact about the VAT. Any product made my that company in Europe where the VAT occurs is going to be subject to that tax unless there is a tax treaty in play for that vehicle in its final destination. The tax will still be imposed, but the company will get a refund. Second, Dailmer, BMW, and Volvo all have factories located in Germany AND elsewhere, much like US and Japanese auto manufacturers. But with US Companies, they have two distinct advantages, subpart F income and IRC 969. But their worldwide headquarters is still in the US with regional HQ in Europe and Asia, and maybe in South America, much like Dailmer, BMW, and Volvo. In fact, Volvo has a US HQ here. It is how they get to use the treaties between the US and Germany, among other things.