Presidential commission weighs national sales tax

[Rose Siding]

WASHINGTON - The presidential commission on tax overhaul is considering a proposal to add a national sales tax or some similar levy to the federal income-tax system.

The two-tier tax plan was one of several ideas floated at the commission's first meeting Wednesday, but panel members stressed that it's far too early to reach any decisions. The nine-member commission has until July 31 to deliver recommendations to the White House.

Any tax-law changes as sweeping as those under review would affect every economic interest group in America, shift trillions of dollars within the economy and be the object of intense lobbying in Washington before Congress works its will.

Republicans in Congress also are weighing possible tax-law changes as complements to their goal of overhauling Social Security, but they have no firm plan yet and no timetable. It's unclear how much they'll coordinate with President Bush's tax commission.

http://www.realcities.com/mld/krwashington/10916861.htm

Treas Sec Snow told the commission, "I know it isn't easy..." (translation: "It's hard")

[cthrumatrix]

1. pure Rovian -- this was the PLAN the whole time a National Value Added Tax

look at HR bill 25 ... I think the VAT rate is there.


Bush would never get re-selected by saying "i need to raise taxes ...beucase I ran the country in the damn ground"

[Ilsa]

2. I can see these vultures now, turning to one another

and saying "F#@k this waiting; let's kill something."

They should all be on sex offender lists for even considering raping the poor.

[applegrove]

3. Don't let those illegals get away with not paying one "red" cent of taxes!

[Ilsa]

4. Why doesn't Bush simply do what he always did before in business?

Call his daddy and ask him to find a sucker to bail him out?

[punpirate]

5. Anything to make the tax system...

... more regressive, rather than impose a model that worked to support the middle class--progressive income taxation.

[femme.democratique]

6. Aren't Republicans supposed to be the ones AGAINST taxes?

What fucking hypocrites, dear god how I hate these people and the people who vote for them!!!

[Skink]

7. I like anything that taxes the internet....

Levels the playing field.

[Pithlet]

8. They're against taxes for everyone but the poor.

As this is a tax that hits the poor the hardest, they're perfectly okay with it. The myth that the poor don't pay taxes is very popular on the right.

[beyurslf]

9. Not only the right believe that myth. My dad is a union Democrat and he

believe the poor don't pay taxes. He says things like he pays more in taxes (he means federal income taxes) than the poor make... and then they get refunds bigger than anything they paid in.

Trying to explain to him that the poor pay a larger % of their income in other taxes than he does is a waste of time....

And he is registered Dem.

[Pithlet]

10. True.

More than one DUer has even said similar things. There have been flame wars over similar subjects. It doesn't seem to do any good to point out to people that the poor are more heavily burdened because taxes have been trending to the more regressive.

[SoCalDem]

11. Most people do not understand percentages

They see the rich guy put $50 in the collection basket, and don't realize that the $5 put in by the single Mom is a bigger sacrifice..

Rich people can and DO avoid taxes by "casual bartering".. an orthodontist fixes the teeth of the car dealer's kids in exchange for the use of a new car...and many other "creative" ways to avoid taxes..

Meanwhile average people who have nothing to trade but their labor, will pay taxes on every stinking thing they buy..

[truthisfreedom]

12. how does VAT work in the UK? anybody know?

who does it affect?

[Sgent]

13. I'm all for progressive taxes

but saying the current day poor pay anything is rediculous.

Except for someone who is single, I can't think of one instance where a person below the poverty line doesn't get back more than they put in, including FICA.

-10% of anything is still -10% tax rate.

EDIT: Single people below poverty line pay 0 federal tax, but may pay some FICA when its all said and done. Persons with dependents wind up with a negative tax rate after the EITC and tax credits.

[Bridget Burke]

19. Not all taxes are Federal.

Texas doesn't have an Income Tax, but we do have Sales Tax. And increases in Property Taxes are definitely passed on to renters.

A national Sales Tax would also hit the middle classes pretty hard.

[muriel_volestrangler]

23. VAT in the UK: a summary

As the name implies, each stage that goods or services go through add on tax, based on the value that stage adds - by adding the tax (17.5% is the standard rate) onto things they sell, and paying that to the government, while claiming an allowance of the VAT on the goods and services they bought.

VAT applies to all goods and services except: food from stores (it does apply to food from restaurants, and 'luxury foods' - eg chocolate and alcohol); books, magazines and newspapers; public transport; children's clothes. Rent, and houses, do not attract VAT; but repairs and extensions to houses do.

Electricity and natural gas for homes has a 5% VAT rate.

To see its effects, consider UK households, split into deciles of gross income (ie including wages, savings, pensions, welfare etc.):

		Bottom	2nd	3rd	4th	5th	6th	7th	8th	9th	Top	average

Gross income	7 580	11 765	13 935	17 315	21 451	25 674	32 324	38 839	47 619	75 786	29 229
Direct taxes	702	1 126	1 406	2 391	3 432	4 561	6 344	8 197	10 566	18 734	5 746
VAT		1 077	 987	1 113	1 316	1 591	1 785	2 176	2 314	2 619	3 586	1 856

So yes, it does take a far larger percentage of low income households money, even with food exempt, and heating and light at a low rate.

[ausiedownunderground]

14. We have this two tiered tax system here in OZ-Doesn't work!!!

We have had this two tiered system here in Oz since 2001. We call a National Sales Tax - A consumption Tax. The basic idea is very sound actually, in that it taxes you democratically - only when you choose to consume resources. Its your choice to pay tax or not and the amount of tax. However when combined with income tax, as well, it does not work in the individuals favour at all as we have found out here in Oz. In fact it has become a great money earner for our governments coffers. When it was first introduced, after a very close election result, by the conservative government here people were compensated for its effects by receiving tax cuts on their income tax and social security benefit increases. However the compensation packages do not make up nearly enough for what the government has been able to recoup through the consumption tax. Its been a big windfall for the government. The compensation package offered was far to small, but at the time nobody really new. Now we do. What really should have happenend was the total removal of income tax, to be replaced by an all encompassing consumption tax. A fully encompassing consumption tax removes nearly all the loopholes and grey areas that the very wealthy have access to, through the income tax system. It is the income tax system that is actually used by the wealthy to minimise or avoid paying their fair share of taxes. It is far harder for the wealthy to avoid paying their fair share of taxes through a consumption tax only revenue raising system. They want their SUV - they pay their fair share of tax to get it. Very difficult for them to avoid it. The more expensive the product you want the more you pay in tax. In Oz the consumption tax has recouped some tax avoidance and tax evasion monies but not a lot, due to the continued use of Income Tax as well. The wealthy can still hire their accountants and lawyers to minimise their taxes through it.
The other great thing about using a consumption tax only, is that it gives the government a Fiscal Policy lever to use to encourage the economy or to discourage the economy outside of having to use "sledgehammer" monetary policy which is slow acting and often targets the wrong areas of the economy. If things are going "gangbusters" in the economy and the government needs to cool it off then they can raise the Consumption Tax rate. This has an overnight effect on demand and targets everybody. If the government wants to heat up economic activity it simply lowers the rate.
From our experience here in Oz a two tier revenue system is overly complicated, still allows the wealthy an out on paying their fair share and really really puts the burden on your average PAYE income earner to supply government revenue. However a consumption tax only system would be worth experimenting with. However i don't think "The Bush Gang" and their constituents would like it as it will be extremely difficult for them to avoid paying their fair share of tax.

[UL_Approved]

15. If this gets put into law, I know that Montana will not be happy

This is something that Montanans have dreaded for decades.

If a sales tax gets put into law, then the elected officials who signed it will not be going back to Washington after their terms are up.

This is one of the universal DO NOT DO items in the West. This will end GOP power in the presidency and Congress. This is something that the people of Red America will not support. The GOP could lose everything over this.

[dutchdemocrat]

16. 18 percent in Holland

But how else do we pay for free university education for young people (including housing), affordable medicare for all, affordable dental care for all, social security that has programs in place to facilitate small businesses, social security that leaves people to leave at a level of existance that is allows them some respect and comfort (people lose their jobs sometimes you know) which includes one holiday a year. Yes, people on welfare in Holland get extra money every year in the summer so they can take a little holiday in Spain or wherever - leisure is a right not a privilege. I am sure many of you will think this is absurd.

The whole concept of tax fear (boogah boogah) in the USA is about as legitimate as Big Bad Bin Laden is going to get you.

You should get what you pay for - but that depends on how your government chooses to spend that money. Unfortunately yours likes to spend it on killing people under the guise of 'security' while most of the real 'free' world gives it back to their people.

[cthrumatrix]

18. I believe HR Bill 25 has a 23% VAT (for the US)

[Bridget Burke]

20. You actually get a return for your tax dollar (Euro?)

We've got to support Bush in his military adventures. Budget cuts? Why, social programs are the first to go.

[area51]

17. republinazis

Ah yes, the republinazi party: they're the tax & spend party.

---

"Prosperity is just around the corner." -- Herbert Hoover
"The economy has turned a corner." -- GW Bush

Herbert Hoover = GW Bush

Neither man cared about the Depression their economic policies created.

[Lorien]

21. And not repeal the tax breaks for the uber-rich?

we need to say it loudly; if the wealthy love the country that allowed them to grow rich, then they'll pay their fair share!

[CheshireCat]

22. No new taxes should be considered until

the tax breaks for the rich and the corporations are repealed.

Making the tax break for the wealthy permanent and making up for it by instating a regressive National sales tax is despicable.