General Question

JackAdams's avatar

Do you believe that, during your lifetime, the current USA federal income tax (and the IRS) will be eliminated and replaced with a federal sales tax?

Asked by JackAdams (6405 points ) September 9th, 2008

I’m praying it will happen, because I think it is wrong to have something that over 70% of the American public is against, and which surveys have indicated that over 90% of those filling out their own reporting forms, are “less than honest.”

I believe, unless I read the information incorrectly, that this is the 100th year of federal income taxes being levied, and that there are plenty of organizations dedicated to the total elimination of any income taxes, anywhere in the USA, including Americans For Fair Taxation.

I think everyone agrees that we do need to pay taxes, but that the taxes should be across the board and fair, and a national sales tax appears the only way to solve the problem.

So, are we gonna one day see the end of all income taxes in the USA?

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11 Answers

augustlan's avatar

I don’t think a national sales tax is the answer. Now, I’m no economist, so my logic may be faulty…but here goes: For the purposes of this example, assume all 3 families consist of 2 adults and 2 children, and live in the same area. All 3 families must feed, house, clothe etc. the same number of people to have their basic needs met. Now, if we have a national sales tax and Family A earns $25,000/year, Family B earns $75,000/year, and Family C earns $300,000/year, then the tax bite felt by Family A will be bigger than the bite felt by Family B, and far bigger than the one felt by Family C. That doesn’t seem like a fair tax law to me. I’d think the only way to make it fair and across the board is to go with a flat percentage rate tax on income only, paid by everyone.

marinelife's avatar

No. I would not want it to happen. Sales tases are unfair burdens on the poor and working poor.

JackAdams's avatar

Income taxes are MORE UNFAIR than sales taxes, as loopholes are created that benefit only the wealthy.

Last year, for example, Bill Gates paid less in income taxes than you did, because of all of the ways available to him, to shelter his money and defer tax payments.

As Leona Helmsley once said to an underling, “Only the little people pay taxes.”

The entire income tax structure was created, solely for the US Government to find out who has the greatest wealth in this country, so politicians would know whom to approach, for campaign contributions.

augustlan's avatar

I understand what you’re saying, Jack. However, if the whole current tax system were abolished, and a flat tax with NO loopholes were instituted, I think that would be fairer than a national sales tax.

marinelife's avatar

A flat tax is not really fair either.

augustlan's avatar

@Marina: How can we make a fair tax system? Is there such a thing, or am I just dreaming?

JackAdams's avatar

@augustlan: A national sales tax would be something that WOULD be a “flat rate” (percentage) tax that everyone, rich or poor, would have to pay, regardless, and there would be no loopholes.

That’s the way state sales taxes are. You make a purchase of any kind, regardless of who you are, you pay the state sales tax.

There are exceptions, of course, in that certain organizations, such as religious institutions, do not pay sales taxes. But other than that, individuals do.

augustlan's avatar

@Jack: I see where you’re coming from. In my example above though, I was trying to say that everyone, regardless of income, must buy the same things to have their basic needs met and the tax on those basics would do far more damage to people that have a lower income. A flat tax on income, with no loopholes would be felt equally by all, regardless of their income. I’m sure there is a flaw in my logic, but as I am mathematically challenged, I can’t see it!

JackAdams's avatar

@augustlan: The reason why a so-called “flat rate” income tax would be inherently wrong for everyone, is because of these two things:

1. If the percentage is the same for everyone, equally, then the dollar amount to be paid would not be the same, in that a multibillionaire would pay a larger dollar amount, than a person earning $35K/per annum.

2. If the dollar amount is the same for everyone, equally, then the percentage to be paid would not be the same, in that a multibillionaire would pay a larger percentage, than a person earning $35K/per annum.

Only a sales tax assesses the same percentage on any purchase to everyone, equally. And yes, a sales tax financially “hurts” the poor, more than it does the wealthy, but so does the price of the item, before the sales tax is added.

If things were always good for poor people, then there would be no incentive for them to try to better themselves and their lot in life.

I respectfully suggest that all poor people become wealthy.

marissa's avatar

I strongly support doing away with income tax and having a national sales tax.
1) I think the national sales tax should not apply to basic groceries, clothing and medicines. This would benefit those with lower incomes. They would be bringing home more money in their paycheck and would not be taxed when they were buying food and clothing.
2) People would have more money to save without having taxes taken out. They could save tax free however they’d like for whatever they’d like. Right now you can only save tax free in special accounts for retirement or education (ira, 401k, etc). Once again this would greatly benefit those with low and middle incomes saving for their first home, education, etc.
3) I think it would help the environment by decreasing waste. If it would cost you more, because of the sales tax to replace an item, you are more likely to repair it. More people would look to buy used items (yard sales, etc) or trade with others for what they need rather than just throwing things out, use public libraries, etc. I could go on and on with examples of this, but I won’t.
4) I think it would be a fairer tax. If someone wants to spend $100,000 on diamonds, go ahead, but they will pay an equal percentage of tax as I do, if I buy $10 bracelet. There would not be loopholes and we all would be able to choose how much tax we are paying by our choice of how much money we are willing to spend. And if that same person decides to take $100,000 and reinvest it in a business that will create more jobs, we all win.

JackAdams's avatar

Thanks Marissa!

All my lurve,

Jack

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