Would a fair tax, consumption tax, VAT, or flat tax only be applied to federal taxes? Would state and local governments be allowed to tax property, income, etc., or would aforementioned levels of government be limited to choosing their percent rate on income that would be added to the federal tax? Or would a percentage of each state's revenue from the tax be allotted for state/local use? I have another, more opinion-invoking, question regarding a flat tax on consumption. Feel free to answer either or both questions. Would a flat tax on consumption not encourage involvement in the black market?
dont think it would encourage black market unless it was egregiously high. great thinking question tho. as for fed vs state consumption tax...i salivate over that simplicity. states would be crazy to not agree to a standard rate as citizens would migrate to the lowest tax areas.
state sales tax would stay the same..so if the federal rate is 15% and state is 8.5 then it would be 23.5 total sales tax on everything you buy..pretty high to me
so you buy a new car for 30,000 and add on 7500 in taxes and reg fees sounds okay to you..and they want to tax food too ..and many want that tax on the purchase of a home..still sound okay to you?
From being involved for years in the informal economy I would say, yes, where one could circumvent the tax system. For example in New York City you can buy cigarettes per pack or individually a lot cheaper from a street vendor taking case from the back of a car far cheaper than in a store if one isn't name brand picky. My cousin sells a pack of foreign smokes for around $7.00 and they cost him by the carton of ten packs around $15 wholesale so each carton sells for all unreported income in the city to his regulars at a $60 profit and he sells four cases of ten cartons for extra income a week at $2400 but has a low key operation. Largely due to a pack going for $14 including city and state taxes on name brands. Many though will settle for Indian, or Polish or Russian cigarettes whatever he can offer. So if the goods are to expensive through the VAT system people might just have stuff shipped in and sell the goods in the informal economy low key not paying taxes or reporting the cash only income.
I have always doubted a flat tax rate, as, there are those things that are essential that should be cheaper for the lower income segment of society. of course, when it comes to income tax, in my country they have levels of taxes, meaning the more you make the more the state makes off you. I have heard previously that in ameirca, the one percent pays ninety percent of the taxes. this was thoroughly researched by someone writing a book on taxation, of course, and i do not hear the one percent complaining. this means they have been capped - what on earth is america spending this much money on. this is the question you should be asking, of course, as it is not a matter of simply supplying the homeless with the cash, but rather regulating what they buy with it. So, if the state was to make public, not the amounts allocated to each sector, but rather what the money was spent on, then there would be a real inquiry if you ask me, as, recently, i found in my country, they could do more than what was going on with ten percent of the budget they allocate. this is because each sector is on the gravy train, and, wastes money as soon as they get it. this means, you could operate on every citizen in america twice a year, with high cost surgery, and not even meet the budget allocation and expenditure. Now, if the state was to clean itself, we would find out who is 'stealing.' there is no ways that america needs more money to do the things it plans to do by the new delegates, but, rather that they observe that these things should not 'be put in a huge black bag at an estimate and dished out.' this is madness!
good points...id still pay far less in taxes than i do now. im a cheap bastard but used to make a lot of money compared to the general population. however, i basically only buy food, booze, public transportation, and utilities...not much else. i'd pay an obscenely low amount of taxes especially considering i live in a horrifically high tax city (DC). so im biased. but...consider, in current system, you are not only paying income tax but you are also paying luxury tax, estate tax, capital gains tax...it is TOO complicated. all that could go away. we should not have an industry devoted to taxation as well as a massive govt department to administer it...such a waste of resources in my humble opinion.
interesting. i think cigarettes falls in the example of an egregiously high tax that would encourage black market. part of the anti-smoking brigade was to increase the tax so much to hurt people financially if they chose to smoke. your cousin is a godsend to his clients...but also a grimreaper...he is an ironic man.
The Fed tax rate alone would have to be in the 30% range with the exemptions and deductions the so-called "fair-tax" folks have. - - - Updated - - - Which is why rich folks push things like the "fair" tax or Forbes "flat" tax. They know it will result in lowering the tax burden on the wealthiest and shift it to the middle classes.
not necessarily. rich people buy most of the assets in this country right? cars, houses, investments would all be taxed. poor people buy very cheap things (groceries and what else?)- us govt is not going to generate a lot of tax rev from the goods poor people buy. Ultimately, the govt would make all its money on corporations, rich people, and the middle class consumer. I think it would ensure that rich people did pay the most...the caveat would be that the black market would have to be suppressed.
You Americans are a bunch of criminals. If someone was caught selling cigarettes like that in Australia they would be in a massive amount of trouble. And why does USA seem to officially encourage cash in hand work? That will also get you into serious trouble with authorities in Australia. 'Informal economy'? You are a bunch of criminals.
that seems an arbitrary exception. why distinguish between a stock and a banana?...you buy both. is not a banana an investment in good health? i think the whole point of the flat tax is there is one simple rule: x percent on all purchases...is that not the point? no exceptions. no loopholes. no shenanigans. taxing the investment on the purchase would make up for removing the capital gains tax. i think it is logical to tax investments.
Many nations have a GST and no I do not think a GST/consumption tax encourages a black market - what encourages black markets are weak laws and authorities that have little interest in policing black markets. USA is a nightmare though because of your system of giving the states so much power. https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States USA cant have a GST because of your crazy system of giving the states so much power to ignore the federal government. You cant even get states to obey federal drug laws. USA culture and political system encourages the states to see the federal government as their enemy. It is mad. https://www.quora.com/Why-does-the-US-not-have-a-GST-goods-and-services-tax http://rfqtv.com/us-sales-tax-vs-australian-gst-a-quick-comparison/ edit - The Australian economy would be %$%$ed without our GST revenue. We dont have reserve status though so we actually have to manage our economy responsibly. We cant run up $20 trillion in debt and get away with it. Not even close. We would get a credit downgrade for sure. From the American credit rating agencies that USA owns and controls. The US tax system is utterly idiotic. And your American culture is also anti-tax isnt it? You dont want that *******n federal government taking all of your profits in tax now do you? In Australia it is not like that. In Australia a 'tax dodger' is looked down upon. edit - USA has reserve status and cannot run out of money. So why even bother with taxes at all? Just print what you need. The rest of us can absorb it. We will continue to accept your USDs. What can the rest of us do about it? The reserve status of the USD is backed by the US military. You cant run out of money. You dont need tax revenue.
I agree with you. And yet they exempt investments. So one would wonder what the proponents' real objective is.
just looked it up. a fair tax includes property. if it includes property, type of investment, i would think it would include other types of investment. but i imagine each politician would lobby for their own version...not sure if there is a standard version of it.
Real property purchases are taxed, investments are not. Which must make one wonder what that would do to the effect on investment property.
im not buying your take on the tax not applying to investments. if a fair tax ever gained traction, it would entail tax on investments imo.
Why do you think we have the laws? It is to protect the profits business and the revenue of the state. If you have a society of laws then you get better citizens and society is easier to manage.
