Should we change our tax system?

The 30% increase in sales tax revenue is a fallacy. The Fair Tax (the idea your friend is espousing) would institute a 23% Consumption Tax. But the fallacy comes when people think that this means their goods services they are paying for is going to be raised by 23%. In fact if you eliminated all other taxes, all of the already embedded costs of other taxes would go away. The average of this is 23%. So you see the price of goods would go down 23% and with an instituted 23% consumption tax, the prices for goods and services we are already buying would remain about the same as now. Also the plan calls for a prebate, where each month, families would recieve a "prebate" on taxes up to the poverty level.

Yes, an 18% sales tax would solve a lot of problems! we should fire the IRS.

I have been pondering this question all my life. As a young boy (in the summer time) I liked to watch the price is right. I was shocked when my father told me you have to pay taxes on ANYTHING you win! Not just on game shows but on Lottery winnings and on all prizes worth more than 10k. Now as an adult I'm disgusted with the facts: the upper class pay very little into taxes and the lower class pay even less ...but the middle class ...we pay the most! All this leads to my new tax system. Sales tax only! Sales tax would raise to 18% divided evenly between local, state and federal governments. What happens to the IRS? Simple, the name IRS would be dissolved and the National Sales Tax Committee will be formed. Roughly 1/2 of the old IRS employees would be offered positions to help keep businesses honest and collect this tax. Collecting sales tax should not be a problem since there is already a sales taxes being collected. Now will that 18% create enough revenue? Absolutely! With drug dealers, illegal immigrants, legal visitors (from other countries) and of course us citizens all paying into the system the revenue would be over whelming. Another plus would be the middle class would no longer be fighting a never ending battle! Oh by the way most foreign countries do not charge income tax. CNBC reported on this recently.

Yes. I've always thought about the sales tax since I became aware of taxation. I think it is the fairest of all these b.s. tax laws that even some tax lawyers are having trouble understanding. A sales tax is quite simple. Everyone pays the same rate, 17 - 20%, as many have floated around. The rich and poor are taxed according to how much they spend. A poor guy who buys a $50,000 house pays the same tax rate as the wealthy who buys a $500,000 house. I see no inequity there.

But my question is where would the thousands of IRS employees go?

If you read the fair tax it is FAIR. Problem is that allot of free loaders think their gravy train would end…but actually, as proposed the poverty level Rebate would be given to every LEGAL citizen to make up for any extra cost and Most illegals would find it difficult and would either become legal or go back…so I think, YES….we need the fair tax….cause it does not allow for unfair tax deductions for the Rich, nor does it allow the people working under the table to use our schools and hospitals for free….Nothing proposed helps so many of our social problems with one clean sweep.

actually agree!!!!! A intake tax in basic terms as you reported might want to remove operating less than the table, illegals might want to truly be paying for the freebies they get, and convinced even the "rich" might want to nonetheless pay more suitable because they both purchase more suitable or purchase more suitable extreme priced products. i does not merchandise to a flat tax both, besides the undeniable fact that it does not remove human beings operating less than the table. yet might want to nonetheless be a a lot more suitable equipment than is in position now the position particular human beings pay a disproportionate percentage of taxes at the same time as others pay none. And lets not even element out the salaries of the 1000's of IRS workers that could properly be enable move or the quantity of funds to print three hundred,000,000 plus tax preparation books consistent with annum.

REAL Conservatives believe in tax fairness, but neo-conservatives (Reagan conservatives) believe in eliminating progressive taxes and replacing them with regressive taxes. For instance, Reagan gave working people a small break in income tax but raised their FICA contributions, because income tax is progressive and FICA is regressive (you only pay FICA up to a certain amount, so the less you make, the bigger of a percentage of your total income it is).

The Fair Tax is a new idea being floated to eliminate income tax altogether and replace it with a national sales tax. In other words, replace the MOST progressive tax with the MOST regressive tax. If you are rich enough to save or invest half of your income it's a great idea, because you don't pay any taxes at all on what you save, or invest, and on the money you make on your savings or investments. But if you make $20k/yr and spend every penny for necessities like food and housing, you pay tax on every penny.

Sales tax is also regressive and unfair because things cost more the poorer you are. For instance, take a person who makes $20k/yr and another person who makes a million a year. The working person buys an old used car for, say $4000. That represents 1/5 of his yearly income. The rich person making a million a year might buy a brand new car for $50,000, but it isn't as much to him in terms of his income. They both pay the same percentage of the purchase in sales tax but the tax is much more 'expensive' to the poorer person in terms of how many hours he has to work to make it up.

Then there's the talk about illegal aliens and the black market. Many illegals (in fact most non-agricultural ones, I'd say) pay income tax, disability, FICA, unemployment, all that stuff. But they never are able to apply for benefits for fear of being caught. Studies have shown that they contribute a lot more than they cost. This isn't true for people paid 'under the table', of course, but that's illegal whether you're an illegal alien or not, and it goes on all over the place.

As for the 'black market', do you pay sales tax on marijuana? Well, I don't mean -you- especially, but you know what I mean. People buy drugs, or pay one another to work on their car or fix their toilet, or barter house-painting for baby-sitting, or whatever, and no taxes are collected. I am lucky enough to have a little one-man business, but since it's a service, I don't need to collect sales taxes and forward them to the state, and that makes it a lot simpler.

Yes, and I support the fair tax 100%

Well, sales tax is only a state thing...federal government does not impose a sales tax. Sales tax would not raise enough money to do anything, and if everyone stopped buying things, that would be the government would be in quite a pinch. The income tax is necessary and fair. I personally don't think their should be a sales tax at all, just income taxes and sin taxes. The sales tax I think hurts the retail market.

No. While the idea could simplify things the rate required would be so high it would be prohibitive to lower income people. Plus realize that the sales tax you have in mind would have to include a local city tax, a state tax, and also a federal tax so I would venture a guess that the rate required would be 30% plus.

Yes we should. Have you checked out the Fair Tax? Here's their site, feel free to head over there and ask questions, you'll get the answers.