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highsea
01-03-2005, 01:31 PM
There is currently a debate on Capitol Hill over the National sales tax proposal. The proposal is basically this:

A 23% tax on all retail goods sold. The money would be collected at the point of sale. Only 5 states have no sales tax, so the infrastructure is mostly in place already.

Abolish the IRS. No more federal witholding, no more April 15th. The gov't would no longer monitor your bank account. The IRS costs $400 Billion dollars a year to run. The tax preparation industry is another $200 Billion per year.

Pros: You would pay tax only on what you consumed. This would encourage savings and investing. You have the choice to "opt out" by buying a less expensive item or going without. Illegal immigrants would start paying taxes.

Cons: The tax would be applied equally to everyone, so it would be less progressive. This would be mitigated by two factors.

First, you would get a "prebate" check every month (probably about $300 per person/month). Everyone would receive this. It would be an amount calculated to be sufficient to prepay the tax on necessities . So the poor, and people on fixed incomes who do not pay any taxes right now, would be compensated at the beginning of each month. They would not see a tax increase.

Second, corporations do not really pay taxes, they pass the cost on to the consumer. About 30% of the cost of an item in the store is a reflection of corporate taxes. If these go away, the cost of the item will decrease accordingly. So while you are paying a new tax on a retail item, the price of that item would be less than it is today, which would offset the tax. Also, corporations spend a great deal of money on tax lawyers, accountants, etc. to comply with the tax codes. This money would no longer need to be spent, which would reduce corporate overhead, and thus the price of their products.

Businesses would still pay the retail tax on things that were not raw materials or items for resale. So office equipment, company cars, etc. would still be taxed.

Services would not be taxed. It's only a consumption tax. If you hired a plumber, laywer, doctor, consultant, etc. The only tax you would pay is for those physical items that were included.

Proponents say this would make US businesses extremely competitive in the world market, that companies would be moving factories (and jobs) to the US, rather than away.

So would it be worth it to you do be done with the IRS and income taxes if you had to pay a 23% sales tax?

------------------------------------------------------

eg8r
01-03-2005, 01:45 PM
[ QUOTE ]
So would it be worth it to you do be done with the IRS and income taxes if you had to pay a 23% sales tax?
<hr /></blockquote> Absolutely! I don't think there are enough politicians in DC with the guts to do something like this. Dems or Cons, I don't think there will be enough concensus to make it happen.

eg8r

Wally_in_Cincy
01-03-2005, 01:48 PM
Although it's an interesting theory, it will never fly. The unforeseen consequences could be enormous. Look what happened to the savings and loans when the relatively modest (compared to this) reforms of 1986 were instituted.

I think we should be simplifying the existing code. A Steve Forbes-type flat tax would be a good thing to look at.

Even though I am a homeowner, I would even be willing to phase out the home mortgage deduction.

Deeman2
01-03-2005, 01:56 PM
<blockquote><font class="small">Quote highsea:</font><hr> A 23% tax on all retail goods sold. The money would be collected at the point of sale. Only 5 states have no sales tax, so the infrastructure is mostly in place already. <font color="blue"> Best idea in the world! </font color>

Abolish the IRS. No more federal witholding, no more April 15th. The gov't would no longer monitor your bank account. The IRS costs $400 Billion dollars a year to run. The tax preparation industry is another $200 Billion per year. <font color="blue"> This is why it will never fly. The lobbyists will kill it before it gets into a subcommittee. Too bad. </font color>

So would it be worth it to you do be done with the IRS and income taxes if you had to pay a 23% sales tax? <font color="blue"> It would be worth everything so, therefoee, it will die as most good ideas do. </font color>

------------------------------------------------------ <hr /></blockquote>

SpiderMan
01-03-2005, 02:10 PM
Would 23% generate the same revenue as our current income tax, especially considering the $3600-a-year "prebates" to be handed out, and the expected reduction in consumption? If not, then the 23% will quickly become 30% or 40% unless government spending is drastically reduced.

I would of course be delighted with this system, as I currently pay much more than 23% on both spent and saved income. But, if the majority are like me and would benefit, then obviously there would be a drop in tax revenue.

SpiderMan

pooltchr
01-03-2005, 02:18 PM
Makes too much sense for anyone in Washington to allow it to happen. Personally, I think it's a great idea!

SecaucusFats
01-03-2005, 09:51 PM
I think that in principle the idea is OK, but I am not so sure that it would not have the unwanted consequence of imposing an additional burden on the poor and lower middle class.

Would food and basic clothing (not talking expensive designer duds here) be exempt from the tax? The rebate sounds good, but realistically speaking, $300 is not enough to offset the additional burden on that segment of our society that could least afford it. So IMO, keeping the rebate and exempting basic food and clothing would be a more equitable course.

BTW I think it is a progressive tax in the sense that wealthier folks spend more and would therefore pay more in taxes (nothing really wrong with that when compared to the loophole ridden system currently in place).

SF

highsea
01-03-2005, 10:24 PM
<blockquote><font class="small">Quote SecaucusFats:</font><hr> ...The rebate sounds good, but realistically speaking, $300 is not enough to offset the additional burden on that segment of our society that could least afford it.
SF <hr /></blockquote>
$300 was just the number I heard. Do you think that poor people spend more than 1200 a month on necessities per person? For a family of four, that's $4800/month in expenses, and a $1200 pre-bate. The $300 is just to prepay the tax increase on purchases, it's not meant to subsidize their income.

And remember, when you remove corporate tax costs from goods, the price of those goods goes down...And, those people no longer have payroll taxes coming out of their checks.

----------------------------------------------

SecaucusFats
01-03-2005, 10:32 PM
<blockquote><font class="small">Quote highsea:</font><hr> <blockquote><font class="small">Quote SecaucusFats:</font><hr> ...The rebate sounds good, but realistically speaking, $300 is not enough to offset the additional burden on that segment of our society that could least afford it.
SF <hr /></blockquote>

$300 was just the number I heard. Do you think that poor people spend more than 1200 a month on necessities per person? The 300 is just to prepay the tax increase on purchases, it's not meant to subsidize their income.

<font color="blue">I stand corrected. I responded long after having read your original post, and was operating under the mistaken assumption that the $300 was the total per household. </font color>

And remember, when you remove corporate tax costs from goods, the price of those goods goes down.

<font color="blue">Agreed. </font color>

---------------------------------------------- <hr /></blockquote>

scottycoyote
01-03-2005, 11:02 PM
one factor not considered is the ability of the government to sway certain activities (charitable giving, home ownership, business investment) thru tax breaks, credits and incentives. Someone mentioned something to the effect that the tax wouldnt be progressive and the rich would escape the loopholes they get now....id just like to say in 14 years of accounting, ive yet to see these rich tax dodgers come out on top lol. I have a few clients that pay a good 80% of the taxes I see paid in ( i think its something like the top 5% pay about 90% of the taxes)...I hear the "rich people dont pay taxes" line so often, I just like to set the record straight where i can.

of course the other reason id be against this law is ID BE OUT OF WORK lol

highsea
01-04-2005, 01:06 AM
scottycoyote,

I can understand why you would be against it, considering your line of work. Of course the wealthiest people pay the most taxes, they still would under a flat tax or sales tax. Under a flat tax system, you would still be out of work also, because a tax return would fit on a postcard.

I think everyone agrees the system needs reformed. Right now the tax code is some 76,000 pages, and nobody understands it. The government spends 400 Billion a year on the IRS. That's as much as we spend on National Defence. That's 1/5 of total government spending...on a system to collect taxes. Get rid of the IRS and you decrease the tax burden by 20% right there. That's something worth shooting for. The sales tax makes it possible, and it's a system that can't easily be cheated. Everyone pays, illegal immigrants, drug dealers, everyone.

Retail (consumer) sales in the US is about 3.7 Trillion.
Manufacturers sales is about 4.5 trillion.
Wholesale sales is about 3.3 Trillion.

Total annual sales 11.5 Trillion. Eliminating taxes on the wholesale segment, taking 23% of retail and manufacturers sales gives the gov't 1.9 Trillion in revenues. We spent 2 Trillion in 2004. Eliminate IRS's 400 Billion, and you have a 300 Billion surplus.

30% of cost of goods sold is income taxes and compliance costs. So manufacturers and producers become much more competitive in the world market. This spurs the economy, creates jobs, more manufacturing, and generates more tax revenues. Then the gov't can drop the rate to 20%, then maybe 18%, etc.

That's the theory anyway.... /ccboard/images/graemlins/wink.gif

------------------------------------

SpiderMan
01-04-2005, 08:16 AM
<blockquote><font class="small">Quote highsea:</font><hr> scottycoyote,
Retail (consumer) sales in the US is about 3.7 Trillion.
Manufacturers sales is about 4.5 trillion.
Wholesale sales is about 3.3 Trillion.

Total annual sales 11.5 Trillion. Eliminating taxes on the wholesale segment, taking 23% of retail and manufacturers sales gives the gov't 1.9 Trillion in revenues. We spent 2 Trillion in 2004. Eliminate IRS's 400 Billion, and you have a 300 Billion surplus.<hr /></blockquote>

What about the $300 monthly "prebate"? If you give it to 300 million people, that's another 1.08 trillion in spending, so now you have a 708 billion deficit. The tax rates would have to go up. Then, if the taxes have the anticipated effect of reducing consumer spending and encouraging saving, this deficit will increase and the rates will go up even more.

Don't get me wrong, I like the idea, but these numbers seem really optimistic.

SpiderMan

SPetty
01-04-2005, 09:05 AM
<blockquote><font class="small">Quote highsea:</font><hr> Then the gov't can drop the rate to 20%, then maybe 18%, etc.<hr /></blockquote>HAHAHAHAHA! hahahahahaha! Whew! HAHAHAHAHA! /ccboard/images/graemlins/laugh.gif

Chopstick
01-04-2005, 09:20 AM
I'm for anything that get's rid of the IRS. Those guys live on my shoulder. Tax rates for some people are just obscene. I heard Bill O'Reilly say he was in a 75% tax bracket and a democrat sat across the table from him and told him he should pay more. I couldn't believe he said it with a straight face. I heard the Elvis was in a 90 something percent bracket. That just ain't right.


ChopStick &lt;~~~Single, no deductions, taxed to death.

Qtec
01-04-2005, 09:44 AM
[ QUOTE ]
According to the IRS, individuals accounted for $94 billion of the $127 billion tax gap and corporations for $33 billion in 1992. About half of the gap is caused by unreported income. If all of this lost tax revenue were collected, the tax burden on law-abiding citizens could be reduced by one fifth to a quarter.
<hr /></blockquote>

Why dont you just go after the tax dodgers?

maybe because they are all GW,s friends? /ccboard/images/graemlins/laugh.gif

Q

Wally_in_Cincy
01-04-2005, 09:56 AM
<blockquote><font class="small">Quote SPetty:</font><hr> <blockquote><font class="small">Quote highsea:</font><hr> Then the gov't can drop the rate to 20%, then maybe 18%, etc.<hr /></blockquote>HAHAHAHAHA! hahahahahaha! Whew! HAHAHAHAHA! /ccboard/images/graemlins/laugh.gif <hr /></blockquote>

I agree. They are much more likely to raise it. But at least highsea is an optimist /ccboard/images/graemlins/smile.gif

eg8r
01-04-2005, 10:17 AM
[ QUOTE ]
Why dont you just go after the tax dodgers?

maybe because they are all GW,s friends? <hr /></blockquote> LOL, it is always Bush's fault.

eg8r

eg8r
01-04-2005, 10:22 AM
[ QUOTE ]
What about the $300 monthly "prebate"? If you give it to 300 million people, <hr /></blockquote> Are you including children? I don't think they are added. A family of four, two parents and two kids, would not be getting $1200. At least that is what I have read. I believe they would get $600.

eg8r &lt;~~~could be wrong and there are many theories floating around right now

Deeman2
01-04-2005, 10:25 AM
<blockquote><font class="small">Quote Qtec:</font><hr>
maybe because they are all GW,s friends? /ccboard/images/graemlins/laugh.gif

Q <hr /></blockquote>

<font color="blue"> What an idiot....as usual </font color>

SPetty
01-04-2005, 10:28 AM
<blockquote><font class="small">Quote Chopstick:</font><hr> I heard Bill O'Reilly say he was in a 75% tax bracket... I heard the Elvis was in a 90 something percent bracket.<hr /></blockquote>How does that work?

Are we talking about something other than the national personal income tax? I thought the highest national personal income tax rate was 35% (of income over a certain amount...)

Warning to Paranoids: Link to IRS site with tax rates (http://www.irs.gov/instructions/i1040gi/24811v52.gif-78039173.html)

Wally_in_Cincy
01-04-2005, 10:37 AM
<blockquote><font class="small">Quote SPetty:</font><hr> <blockquote><font class="small">Quote Chopstick:</font><hr> I heard Bill O'Reilly say he was in a 75% tax bracket... I heard the Elvis was in a 90 something percent bracket.<hr /></blockquote>How does that work?

Are we talking about something other than the national personal income tax? I thought the highest national personal income tax rate was 35% (of income over a certain amount...)

<hr /></blockquote>

I don't know about O'Reily but when Elvis was alive the top rate was 78% IIRC

Reagan's tax cut of 1981 dropped it to 38%

In Britain it was over 90%. That's why several English misicians moved here in the 70's.

Qtec
01-04-2005, 11:10 AM
tell me O wise One /ccboard/images/graemlins/grin.gif-

Who benefited MOST from GW,s tax cuts? <font color="blue"> I really want to know. </font color>

Who would profit more with this new system? <font color="blue"> Dont dodge this one. </font color>

You and eg8r both are so dismissive.
When GW,s name is mentioned in a critical light, we get the usual knee-jerk reaction. Always attacking , but never answering the question!

Q

Qtec
01-04-2005, 11:18 AM
[ QUOTE ]
I heard Bill O'Reilly say he was in a 75% tax bracket and a democrat sat across the table from him and told him he should pay more. I couldn't believe he said it with a straight face. I heard the Elvis was in a 90 something percent bracket. That just ain't right <hr /></blockquote>

Maybe we should start a collection for poor old Bill! Life can be hard.

Is this the same guy/pervert /ccboard/images/graemlins/laugh.gif who likes to talk dirty on the phone?

Q /ccboard/images/graemlins/grin.gif

eg8r
01-04-2005, 11:26 AM
[ QUOTE ]
When GW,s name is mentioned in a critical light, we get the usual knee-jerk reaction. Always attacking , but never answering the question!
<hr /></blockquote> The second sentence is completly correct with respect to your participation. All you have ever done since you started posting was to attack W and have never answered any questions. When questions are asked, you routinely will change the subject or post some article you read.

eg8r

SpiderMan
01-04-2005, 11:36 AM
In this earlier post, Highsea implied that it would be a per-person stipend. Anyway, even if it is $300 per taxpayer I think we're still in the hole.

http://www.billiardsdigest.com/ccboard/showthreaded.php?Cat=&amp;Board=npr&amp;Number=172473&amp;page =0&amp;view=collapsed&amp;sb=5&amp;o=&amp;vc=1

SpiderMan

Rich R.
01-04-2005, 11:54 AM
<blockquote><font class="small">Quote eg8r:</font><hr> it is always Bush's fault.

eg8r <hr /></blockquote>
I think this is the truest thing you have ever posted. /ccboard/images/graemlins/blush.gif /ccboard/images/graemlins/grin.gif /ccboard/images/graemlins/grin.gif

highsea
01-04-2005, 12:22 PM
<blockquote><font class="small">Quote SpiderMan:</font><hr> In this earlier post, Highsea implied that it would be a per-person stipend. Anyway, even if it is $300 per taxpayer I think we're still in the hole.
<hr /></blockquote>
Sorry about that misinformation. I was posting out of memory, and didn't look up the details. Here is how it would actually work:
[ QUOTE ]
To preclude any citizen from paying the FairTax on the basic necessities of life, a Rebate check is sent (in advance) each month. Also, called a "Pre-bate" check.
The amount of the Rebate is determined by Family size (not income) and is calculated by multiplying the annual Poverty Level (as established by the U.S. Department of Health &amp; Human Services) times 23%, then dividing by 12 to determine the monthly amount of the "Pre-bate" check.

The Rebate for a family of four(4) for year 2004 would be $479/mo, paid in advance each month. [See chart below.]

Thus, the family in that example would in effect pay no FairTax on purchases up to $24,980 for the year. (Note: The FairTax applies only to New Goods and Services. It does not apply to Used Goods, or to Education costs. So, a family of limited income could stretch its purchasing power even further by buying a Used Car, for example, rather than a New Car.)

If the family of four purchased $49,960 for the year, the amount they would have paid in FairTax (net of the Rebate) would have been $5,745, or 11.5% of the total expenditures for taxable (New) Goods &amp; Services.<hr /></blockquote>
You can see the chart here:

http://www.geocities.com/cmcofer/fca4.html

And read about the proposal here:

http://www.salestax.org/

edit to add: the current proposal also does tax services, so what I said earlier was wrong. The rate for services would be 25%. This, plus the smaller prebate, would account for the defecit. Note that the poor already get subsidized medical care and food/housing, etc. These benefits would not go away.

Chopstick
01-04-2005, 12:27 PM
<blockquote><font class="small">Quote SPetty:</font><hr> <blockquote><font class="small">Quote Chopstick:</font><hr> I heard Bill O'Reilly say he was in a 75% tax bracket... I heard the Elvis was in a 90 something percent bracket.<hr /></blockquote>How does that work?

Are we talking about something other than the national personal income tax? I thought the highest national personal income tax rate was 35% (of income over a certain amount...)

Warning to Paranoids: Link to IRS site with tax rates (http://www.irs.gov/instructions/i1040gi/24811v52.gif-78039173.html)
<hr /></blockquote>

Hmmm, I don't get this page. It looks too low. I know I've been charged a lot more than this page indicates. I am going to hire a pro to look into this.

Chopstick
01-04-2005, 12:30 PM
<blockquote><font class="small">Quote Qtec:</font><hr> tell me O wise One /ccboard/images/graemlins/grin.gif-

Who benefited MOST from GW,s tax cuts? <font color="blue"> I really want to know. </font color> <font color="red">ME. </font color>

Who would profit more with this new system? <font color="blue"> Dont dodge this one. </font color> <font color="red">Me,again. Bring it on.</font color>

<hr /></blockquote>

Deeman2
01-04-2005, 12:41 PM
<blockquote><font class="small">Quote Qtec:</font><hr> tell me O wise One /ccboard/images/graemlins/grin.gif-

Who benefited MOST from GW,s tax cuts? <font color="blue"> I really want to know. </font color> <font color="green">The American Economy. </font color>

Who would profit more with this new system? <font color="blue"> Dont dodge this one. </font color> <font color="green"> The rich, this includes Liberals, as well as rational people. The tax accountants and lawyers would benefit least as we would not need to waste billions on filing deceptive and complicated returns. Most would see some benefit if nothing else to reduce the cost of taxation.</font color>

You and eg8r both are so dismissive. <font color="green"> Of course, why shouldn't we be? You have nothing invested in our economy, our tax structure or way of life. You complain about things that you have no concept of in derogatory terms toward our president when the bulk of the wealth in this country does not rest with his "person" friends. You hate our country and have never had anything positive to say about us. You would be the first to whine for help and the last to give us any credit for anything, ANYTHING we have ever done. You are a typical Euro Liberal who sits back and takes pot shots at us while embracing any left leaning kook who will listen to you. Have I avoided your questions, ever? You just don't like my answers. </font color>

When GW,s name is mentioned in a critical light, <font color="green"> Funny, you never mention him in any other light!</font color> we get the usual knee-jerk reaction. Always attacking , but never answering the question! <font color="green"> What would George Bush have to do to satisfy you that he is not the demon you make him out to be? You know, there is nothing he can do to win the hearts of people who hate him.

You can pretent to be right, just don't pretent to have the moral high ground here, you abandoned that by never having an opionion other than Bush is Bad.

Some of us are still proud of our country, our president and our military. We resent people putting us down at every opportunity. Some love it, some of us just don't. We recognise we are not perfect but are not the devils you and others make us out to be.</font color>

Deeman
will answer even the whiny questions...

Q <hr /></blockquote>

catscradle
01-04-2005, 01:05 PM
Personally I think it is a great idea IF they really do drop the income take and don't come up with some bull of keeping it around for a transitional period (which never seems to end).
The best thing about is that everytime somebody bought something they feel and be aware of the size of taxes. As it is now we're only fully aware of how much we're being hit for once a year and then we forget about it after a week or two of grumbling.
I can thing of one bad possibility which is a huge underground market which totally goes around the tax laws. It certainly would greatly expand the market for stolen goods.

highsea
01-04-2005, 01:38 PM
<blockquote><font class="small">Quote catscradle:</font><hr> I can thing of one bad possibility which is a huge underground market which totally goes around the tax laws. It certainly would greatly expand the market for stolen goods.
<hr /></blockquote>Don't we already have this? The beauty of the sales tax is that the underground markets actually get taxed. The thief who sells stolen goods, and the drug dealer, still have to buy food and other goodies. So they will pay taxes at the checkout stand, no matter where the money came from.

eg8r
01-04-2005, 03:11 PM
[ QUOTE ]
I think this is the truest thing you have ever posted. <hr /></blockquote> Can something I say be true but not as true as this?

eg8r

Ross
01-04-2005, 08:23 PM
<blockquote><font class="small">Quote Chopstick:</font><hr> [Hmmm, I don't get this page. It looks too low. I know I've been charged a lot more than this page indicates. I am going to hire a pro to look into this. <hr /></blockquote>

Yes, Chopstick it IS true. The top US Income tax rate is 35%, and that rate only applies to TAXABLE income over $300,000. But since there are tax deductions and since the income below $300,000 is taxed at progressively lower rates, no US citizen even pays that rate. For a single person making 70K/year in the US the effective federal income tax rate (taxes paid/gross income) is less than 18%. There is so much misinformation out there about tax rates it is no wonder that people are upset all of the time.

Another example of manufactured alarm due to the US not being "numerate" - how many Americans do you think realize that the average effective income tax rates under Democratic and Republican administrations consistently differ by less than 1 percentage point?

It is also true that you pay SS taxes (hopefully some of which you will get back), probably a state income tax, sales tax, and property tax (the last of course reduces your federal bill) and all of that adds up. So the federal income tax rate doesn't tell the whole story.

But sticking to federal income taxes people still confuse the marginal rates at the top of their tax bracket for the rate they pay overall while also ignoring the fact that taxable income is significantly less than actual income. So they get themselves all bent out shape over grossly inflated "tax rate" misinformation that is often bandied about.

I bet 90% of Americans would overestimate their own effective federal income tax rate. If you want to know what yours is, just look at actual taxes paid last year and divide that by your gross income for last year. Unless you are an extreme outlier you will come out somewhere between 10% and 25%.

Ross
01-04-2005, 08:43 PM
<blockquote><font class="small">Quote highsea:</font><hr> ...The IRS costs $400 Billion dollars a year to run. ...
------------------------------------------------------ <hr /></blockquote>

????? If I am reading this article correctly the IRS annual budget is currently about 1/40th of that -- approximately $10 billion.

http://www.washingtonpost.com/wp-dyn/articles/A61235-2004Nov18.html

nAz
01-04-2005, 09:34 PM
Sounds good sounds so simple but there must be huge risk in implementing a NST, i was thinking about how consumer spending would probably plummet as most people will save their money (maybe invest it)and as we all know consumer spending is what drives our economy. i also don't think this system wouldn't generate enough cash to pay for all out expenses like the war healthcare and education.

BTW HighSeas the $400B to run the IRS doesn't sound right are you sure about that figure?

highsea
01-04-2005, 09:51 PM
That 400 must have been a total, compliance cost plus government costs. I don't recall, it was a radio interview I heard the other day that was using the 400 number. It's hard to get hard data on a lot of this stuff because economists can't seem to agree on anything.

In general, I like the idea of replacing the income tax with a consumption tax though, but I don't want to see 30 or 40 percent rates...

Rich R.
01-05-2005, 04:42 AM
<blockquote><font class="small">Quote Rich R.:</font><hr>
I think this is the truest thing you have ever posted. <hr /></blockquote>
<blockquote><font class="small">Quote eg8r:</font><hr>Can something I say be true but not as true as this? <hr /></blockquote>
It is possible, but I doubt it. /ccboard/images/graemlins/blush.gif /ccboard/images/graemlins/grin.gif /ccboard/images/graemlins/grin.gif /ccboard/images/graemlins/grin.gif

Chopstick
01-05-2005, 05:04 AM
<blockquote><font class="small">Quote Ross:</font><hr> <blockquote><font class="small">Quote highsea:</font><hr> ...The IRS costs $400 Billion dollars a year to run. ...
------------------------------------------------------ <hr /></blockquote>

????? If I am reading this article correctly the IRS annual budget is currently about 1/40th of that -- approximately $10 billion.

http://www.washingtonpost.com/wp-dyn/articles/A61235-2004Nov18.html
<hr /></blockquote>

I found this at irs.gov.

For the 2004 fiscal year, the IRS will have a little more than 99,000 employees (full-time equivalent) and a budget of $10.185 billion.

IRS History and Structure (http://www.irs.gov/irs/article/0,,id=98142,00.html)

<font color="blue">By the way I just found out that Teresa Heinz Kerry paid a tax rate two and a half times lower than me. </font color> /ccboard/images/graemlins/mad.gif

Chopstick
01-05-2005, 05:30 AM
<font color="blue">This is interesting. It's a look at what happened when we did some large tax cuts back in the twenties. Here is a piece of it. </font color>

The flat marginal rate income tax may never be enacted. Many people, and this certainly includes many politicians, believe that it is only "fair" that higher-income individuals face higher marginal rates of income taxation. The tenacity with which supporters of progressive tax rates cling to this idea is indicative of their redistributionist philosophy. It also indicates their refusal to face reality. The tax cuts of the twenties as well as every major income tax cut has resulted in an effective shift of the tax burden from lower- to higher - income taxpayers. As the twenties show, it does not have to worsen the government's deficit. Economic growth in the twenties surged with the tax cuts, and prices were nearly stable while unemployment rates averaged around 4 percent.

The government ran surpluses which allowed it to reduce the federal debt by 25 percent. The decreases in marginal tax rates led individuals to pull their investments out of ones designed to avoid taxes - investments such as tax-exempt municipal bonds, personal service corporations, and other avenues to avoid distributing corporate profits. The result was a rising tide of investment in new, growing, and sometimes risky businesses and industries such as "radio," consumer household electric appliances, electric utilities, airplane manufacturers, rubber tire manufacturers, supermarket chains, and so forth. The 1920s were a vibrant, growing decade, and the tax cuts of the 1920s certainly were an important part of what brought this about.


Cutting Marginal Tax Rates. Evidence from the Twenties. (http://www.libertyhaven.com/politicsandcurrentevents/taxesandtaxation/marginaltax.html)

<font color="blue"> Apparently cutting income tax rates did not decrease federal revenues. It increased them instead. </font color>

Chopstick
01-05-2005, 06:10 AM
<font color="blue">Some more tax history. </font color>

From the mid-1960s until 1982 the tax rate ranged from about 15% for the lowest brackets to about 70% for the highest, with a similar structure for corporate income taxes. In 1982, Congress passed President Reagan's plan to cut the highest rate on personal income tax from 70% to 50% and the capital gains tax from 50% to 20%. The Tax Reform Act of 1986 further lowered the maximum marginal tax rates from 50% to 28%, the lowest since the 1920s.

A top rate of 31% was added in 1991, and additional rates of 36% and 39.6% for the wealthiest individuals were approved in 1993. Under changes enacted in 1997, the tax rate on most long-term capital gains is 20%—10% for people in the 15% tax bracket; the rate is slightly lower for investments held at least five years. Further changes enacted under President George W. Bush in 2001 reduced the rate in the lowest income-tax bracket to 10% (for the first $6,000 of income only) and called for the tax rates of all brackets above the 15% rate to be reduced to 25%, 28%, 33%, and 35% by 2006. These rates and all other provisions of the act will be rescinded in 2011, however, unless continued by passage of another law.

The top corporate tax rate is 39%, although the highest income-bracket tax rate is 35%. In many states and cities, lowered federal income taxes have been offset by higher state and local income and property taxes. In the 1980s and 90s, the call for a “flat tax”—a single tax rate (around 17%–20%) for individuals and businesses—was a recurring campaign issue among American conservatives.

eg8r
01-05-2005, 07:18 AM
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Sounds good sounds so simple but there must be huge risk in implementing a NST, i was thinking about how consumer spending would probably plummet as most people will save their money (maybe invest it)and as we all know consumer spending is what drives our economy. i also don't think this system wouldn't generate enough cash to pay for all out expenses like the war healthcare and education. <hr /></blockquote> Sounds too good to be true. I think the fair tax websites explain how these things are paid, but I cannot remember.

As far as consumer spending going down, I don't think that will be as big a problem as some expect. This is one of the selling points the politicians use for offering a rebate to spur the economy, the people will spend it, just like they always have.

eg8r

eg8r
01-05-2005, 07:19 AM
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It is possible, but I doubt it. <hr /></blockquote> Exacltly my point, so your first post made no sense. /ccboard/images/graemlins/smile.gif

eg8r

SPetty
01-05-2005, 10:39 AM
<blockquote><font class="small">Quote Ross:</font><hr> For a single person making 70K/year in the US the effective federal income tax rate (taxes paid/gross income) is less than 18%. <hr /></blockquote>I agree that the effective tax rate is a lot lower than many folks think. Still, paying over $12,250 in federal income tax is a large sum of money even if you are making 70K/year.

<blockquote><font class="small">Quote Ross:</font><hr>It is also true that you pay ... property tax (the last of course reduces your federal bill) ... <hr /></blockquote>My property taxes do NOT "of course" reduce my federal bill. This is only true if you itemize deductions.

Ross
01-05-2005, 10:52 AM
SPetty, you are correct on both counts. I'm surprised though that you don't itemize - you must not be paying a mortgage? Oh, yeah, YOU are one of those rich Texans that sold your oil and bought the Petty Point Pool Hall with cash! /ccboard/images/graemlins/grin.gif

DickLeonard
01-07-2005, 10:45 AM
This would turn the country into nothing but bigger thieves than they are now. Do you honestly believe that heads of Cororations would be paying sales tax, they would be bartering back and forth.

The only ones who would pay are the lowest people on the tax chain. Of course that might hamper the War Machine who would would pay for the Wars.####