GOP Discusses National Sales Tax: "nest eggs devoured"

[Bush_Eats_Beef]

http://www.foxnews.com/story/0,2933,140076,00.html

WASHINGTON — While Republican leaders of the House and Senate are huddling for the next two days in Norfolk, Va., to chart the agenda for the upcoming Congress, White House officials meeting with them on tax reform are likely to debate the idea of a national sales tax.

President Bush and House Speaker Dennis Hastert have both said the idea of a national sales tax deserves a serious look. For many, the idea of a world without the Internal Revenue Service is very seductive.

Critics contend that the sales tax would have to be higher than advocates advertise. "It would require at least a 30 percent rate, that's a very high rate and may create tax evasion on its own," said Chris Edwards, a tax analyst with the Cato Institute. "The highest state sales tax we've got right now is only 11 percent. So there's a great unknown here, would the government be able to actually collect a 30-percent sales tax?"

Critics say two categories of Americans won't like the sales tax: millions who don't pay federal income taxes and workers about to retire who could see their nest eggs devoured by a large and unexpected sales tax.

[Sandpiper]

1. Another move to shift the tax burden to the working class

The middle class, working class, and poor all spend a far more substantial portion of their income on the purchase of goods.

They also don't mention that the 30% national sales tax would be on top of the state sales tax you already pay.

Imagine having to pay 36 dollars in taxes for every 100 dollars of groceries you buy.

[politicat]

2. black market, here I come.

I would consider it my patriotic duty to starve that beast. A tax that regressive is oppressive and calls for some "tea in the harbor."

Grow your own, raise your own, trade, barter, buy used, recycle. They will get no dimes out of me if they do that. Tax evasion would go through the roof.

Pcat

[Bush_Eats_Beef]

4. It won't be 36 dollars, it will be more like 48 or 58

The part of this story that gets reported about HALF the time...and it is not reported AT ALL in this particular article from Fox...is that a proposed "national" sales tax will be ADDED to your existing STATE sales tax.

So I am paying 8.25% in California right now. Economists say that to abolish the IRS and still collect the money that the federal government "needs," the "national" rate would have to be between 40-50%. Add 8.25% to that and I would pay 148-158% for everything.

This is being sold under the guise of getting the "rich" to pay as much as the "little guy," which is garbage.

What they are REALLY doing is going after mom and pop's nest egg.

As the article says, if someone makes half a million a year and "consumes $40,000...HOW will this be "fair and equal treatment" for the guy who consumes $40,000 and ONLY MAKES $50,000?

[Garbo 2004]

12. Yup, sales tax is a regressive tax & on top of state sales tax? Oy. n/t

[Mandate My Ass]

3. that'll put a lot of families on the street

but at least they won't have to worry about April 15.:grr:

[EC]

5. I'm not sure

That the business world will let this happen, they scream it will cut into sales everytime the states mention it the way it is.

[Bush_Eats_Beef]

7. Here's what will happen

The stores where the wealthy "consume" will feel little or no impact.

But take your average Albertsons, Safeway, etc. supermarket. People will buy groceries in "survival mode." I expect the demand for items that will keep you alive and have a long shelf life, such as rice and beans, will go through the roof.

You'll have fewer people spending money in "working class" stores. Lower profits, staff reductions, going out of business sales.

As I've said in previous posts on this subject, a national sales tax would get George Bush closer to his vision of the ideal American society, including two classes: the hyper-wealthy and the homeless.

[EC]

10. I've always said

The south will never be happy until we have slavery again...Of course the Right to Work states started in the Red States too.

edit: Of course We will be the slaves, the middle and lower classes

[Qanisqineq]

13. groceries would be taxed, too?

I know some states already tax groceries (VA for instance, I lived there and hated that!), but most I've lived in do not. I think it is horrible to tax food. Horrible. There are enough starving children and elderly in this country already.

[Bush_Eats_Beef]

14. Everything will be taxed. Everything.

The article warrants careful reading, particularly the "we'll get it when they spend it" remarks.

George W. Bush wants YOUR family's nest egg. If this one passes, he'll get it.

[jmowreader]

19. Stores for the wealthy will feel a BIG impact

One of the things Clinton did in his first term was to slap a big federal excise tax on new yachts. The rich stopped buying new yachts--there may have been five new yachts sold in the United States during the life of this tariff, and in a normal year they sell a few hundred. Everyone changed to used yachts--which isn't exactly a step down and it's no savings because a $50,000 used yacht generally needs $50,000 worth of repairs done to it before it's where it should be, but it also dodged the tariff.

A lot of boatyards went out of business because of this tax.

At least one boatbuilder--Bertram--almost went under during the life of the tariff. (There were other reasons for this, but the tariff was a huge one.) Every boatbuilder changed hands at least once during that time.

Lots of layoffs happened.

You don't think rich people are tax-sensitive? Yeah, right. Rich people are far more tax-sensitive than you and I.

[MatrixEscape]

6. Gee ...

Makes me want to start a bartering site to catch the traffic that would start up in response to the tax ;)

[high density]

8. The Dems need to get out in front of this fast

and educate people as to why it's so nasty. If the conservative Cato Institute has doubts about it, we should be very afraid.

[nadinbrzezinski]

9. Ah yes, the flat tax rears its ugly head

[Melodybe]

11. It would severely cut into Wal-Mart's profits and I don't think they'd

like that too much.

[ComerPerro]

16. Hell, this is much worse than a flat tax

[LittleClarkie]

15. What about the tax breaks many get now

Homestead credit
Earned Income credit
Education credit

Plus those who don't pay income tax now, those on a limited income like the poor or seniors.

All that would be gone, woudn't it. We'd all be carrying the burden, even those of us who couldn't.

Hell no.

[cattleman22]

21. Reimbursements to the poor

At this point I am slightly negative towards a national sales tax. However, I have tried to keep an open mind as most of Europe has a VAT which is similar to a national sales tax.

Most of the plans I have looked at have provisions for reimbursing the poor for an estimated amount of sales tax that they would have paid.

There two things I dislike about the current system.
One is that tax filers take advantage of the poor. Many of the people who receive earned income tax credits go to an tax filer and then get an instant rebate with large fees and interest rates. Under a national sales tax, this would not happen


The other thing I dislike about the current system is that it is so hard to define what is income. This creates an added burden on small businesses and large businesses. With a national sales tax, this hidden drag on the economy is gone.

[Bush_Eats_Beef]

26. The unemployed, living on a nest egg...

You worked for the money. You payed income tax on it. It's in the bank, and you pay taxes every year on the interest. Now you're out of work in the George W. Bush Walmart economy, and you're living on it.

Let's just say, as an estimate, that you initially paid 35% income tax when you earned the money. Right now (using California as an example), you pay 8.25 sales tax on everything you buy. Under this model, the government ultimately ends up with 43.25% of every dollar you have earned.

In the new model, take the original 35%, add 8.25%, PLUS the 40-50% (NOT 23% - that is a LIE) that will be required to make this "work."

The government ultimately will get 83.25-93.25% off of every dollar you make. And if they are successful in moving to tax SERVICES ans well as GOODS, they'll get your money much, much quicker.

Be afraid...be VERY afraid...when Linder says (quoted from the URL in my original post):

"The current tax only taxes income. This tax taxes wealth. There are a lot of people who have inherited huge sums who are paying no income tax whatever, they will pay taxes when they spend it," Linder said."

[ComerPerro]

17. That last paragraph is really biased

"Critics say two categories of Americans won't like the sales tax: millions who don't pay federal income taxes and workers aboutto retire who could see their next eggs devoured by a large and unexpected sales tax."

That is such bullshit. They are making it seem like it will only hurt those who don't pay federal income taxes. As though it will help everyone else. So, one is led to assume that the only people who are against this are ones who are getting off scott free currently.

Its just crap. This tax will hurt everyone except for the top percent. But I don't think Faux News wants people to realize that.

[Bush_Eats_Beef]

27. And here is the problem...

...the "workers about to retire who could see their next eggs devoured by a large and unexpected sales tax" are viewed under this plan as "getting off scott free," EVEN THOUGH they paid income tax on that nest egg when it went into the bank. It's a double-dip...the government already got their substantial "share" right off the top. Now they would be helping themselves to a second, LARGER one.

:grr:

[jmowreader]

18. I can think of a third category of Americans who wouldn't like it

That's the rich, who got that way by selling things to people who aren't rich.

When the non-rich go into subsistence mode because they can't afford to buy anything, the rich stop being rich. (Which means everyone eventually will get to be poor, just at different rates.)

I think the big attraction here, at least to the Republicans, is that a national sales tax will eliminate the income tax collection authority, the IRS. All well and good, but someone will have to collect and administer in a national sales tax system, which means that in reality all they'll do is change the name on the door of the IRS building.

The rich know that a national sales tax will destroy the economy, so they will do anything--including blackmail--to stop Shrub from implementing it.

[cattleman22]

23. Disagree about the future of IRS if this is implemented

The IRS is so large because of two reasons, one it is hard to define what income is and two because they must collect tax statements from just abotu every american.

From a privacy standpoint alone, I would prefer a national sales tax. That way government does not know how much I make. However, I have serious concerns about how regressive this tax would be.

[Killarney]

20. That tax would totally screw old people

People who have paid income taxes their whole lives, saved up, and now expect to live off their savings for 10 years and boom... their savings all taxed 30% each time they buy anything. That just sucks.

[Walt Starr]

22. A sales tax like this would be the ruination of the economy

Corporations would fail on an unheard of basis. This would make the crash of '29 seem like an economic upturn by comparison.

No way would I purchase from stores when I could barter. The Black Markey would be rampant in this country.

These fools will probably do it, too.

[pmbryant]

25. Online shopping will explode! ;-)

Or will Bush start taxing the Internets for the first time?

[RUMMYisFROSTED]

24. Imagine a trillion dollar black market.

Economic :nuke: meltdown.

[noiretextatique]

28. hey...aren't they supposed to lower taxes?

oh wait...that's only for the rich :eyes: fuck the rest of us. i can't wait to pass this on to the bushbots i know.