A different method for paying taxes
5/13/05, 11:27 AM
#1
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I have heard of this concept before and I agree with it. It sounds like a reasonable idea, what is your thoughts?
Since there is so much controversy with how much taxes are and which bracket you are in, why not just get rid of all income tax (state and fed). Then raise the sales tax on ALL goods in every state, to about 30 - 35%. Say 25 - 30% goes to the feds, and the remaining 5-10% goes to the state in which the item was purchased. basically the same percentage as goes to them now.
Think about it, you would not have to file taxes by April 15. People would not be able to get away with tax evation. There would be no more audits. There wold be no tax deductions from your paycheck.
You buy something, you pay tax, you are done. If you don't want to pay tax, don't buy that extra item.
No one would have the right to complain that someone is not paying enough tax. If they buy something, they are putting in their share. So if you are poor, you won't buy much so you don't pay much in tax. If you are rich and you buy big $55,000 vehicle, you pay lots of tax. Similar to the rich pay more in taxes than the poor do.
And as prices increase, the amount of tax money increases without raising the tax percentage. Say a gallon of milk costs $2.50 and you pay 30% tax on it. That is $0.75 in tax. So when the price of milk increases to $3.00, you are paying $0.90 in tax. So the amount of taxes collected will increase without increasing the tax percentage.
I have not done a ton of reasearch on this. Obvioulsy I don't think it would be that simple, but the topic sounded like it has potential.
Since there is so much controversy with how much taxes are and which bracket you are in, why not just get rid of all income tax (state and fed). Then raise the sales tax on ALL goods in every state, to about 30 - 35%. Say 25 - 30% goes to the feds, and the remaining 5-10% goes to the state in which the item was purchased. basically the same percentage as goes to them now.
Think about it, you would not have to file taxes by April 15. People would not be able to get away with tax evation. There would be no more audits. There wold be no tax deductions from your paycheck.
You buy something, you pay tax, you are done. If you don't want to pay tax, don't buy that extra item.
No one would have the right to complain that someone is not paying enough tax. If they buy something, they are putting in their share. So if you are poor, you won't buy much so you don't pay much in tax. If you are rich and you buy big $55,000 vehicle, you pay lots of tax. Similar to the rich pay more in taxes than the poor do.
And as prices increase, the amount of tax money increases without raising the tax percentage. Say a gallon of milk costs $2.50 and you pay 30% tax on it. That is $0.75 in tax. So when the price of milk increases to $3.00, you are paying $0.90 in tax. So the amount of taxes collected will increase without increasing the tax percentage.
I have not done a ton of reasearch on this. Obvioulsy I don't think it would be that simple, but the topic sounded like it has potential.
5/14/05, 02:35 PM
#4
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it probably wont happen because there are people out there who believe taxes should be as low as possible. when they hear of a 30% tax rate on their pack of smokes, it'll cause an uproar. it will work in theory, but the sheer size of the the number 30% is scary enough until you seriously sit and think about how logical it is. trouble is, not too many people will make it to that phase.
second, that would create a major hassle for businesses who would have to channel the right amounts to different parts of the government with no govt assistance. they in turn would hire lobbyists who would wine and dine the congress till this was a no-go.
third, this would make all states have to have a uniform rate of state-taxation. places like New Jersey would no longer be able to tout no tax on purchases.
fourth, if inflation continues and a gallon of milk is $10 eventually, youre still paying 30% tax on that? a set tax rate wouldnt make sense when inflation was factored in, unless that set tax rate was variable every year. Take gas for example, 30% on gas? people would freak about that.
main argument: 30% is a daunting number in the minds of many people unless they look at the logic, but none of them will. gotta be realistic about it
second, that would create a major hassle for businesses who would have to channel the right amounts to different parts of the government with no govt assistance. they in turn would hire lobbyists who would wine and dine the congress till this was a no-go.
third, this would make all states have to have a uniform rate of state-taxation. places like New Jersey would no longer be able to tout no tax on purchases.
fourth, if inflation continues and a gallon of milk is $10 eventually, youre still paying 30% tax on that? a set tax rate wouldnt make sense when inflation was factored in, unless that set tax rate was variable every year. Take gas for example, 30% on gas? people would freak about that.
main argument: 30% is a daunting number in the minds of many people unless they look at the logic, but none of them will. gotta be realistic about it
5/14/05, 06:02 PM
#7
AKA 1 BULLITT------------ Legacy TMS Member
Some concepts sound conceivable. The negatives might be an economic slow down, a recession, or even a depression. The government can pretty accurately estimate gross earnings with the present system so their money is just about guaranteed. Depending on sales for tax revenue could become risky and unpredictable for the gorvernment.
There would still be ways to cheat and it might open a bright new horizon for black markets and the underworld. Some of the aspects of Prohibition can relate to this proposed concept, by the same token, it was also a lesson government officials will never forget.
It might also be hard for retirees.
There would still be ways to cheat and it might open a bright new horizon for black markets and the underworld. Some of the aspects of Prohibition can relate to this proposed concept, by the same token, it was also a lesson government officials will never forget.
It might also be hard for retirees.
5/15/05, 01:38 AM
#8
Legacy TMS Member
Originally posted by pilot1129@May 14, 2005, 2:38 PM
it probably wont happen because there are people out there who believe taxes should be as low as possible. when they hear of a 30% tax rate on their pack of smokes, it'll cause an uproar. it will work in theory, but the sheer size of the the number 30% is scary enough until you seriously sit and think about how logical it is. trouble is, not too many people will make it to that phase.
second, that would create a major hassle for businesses who would have to channel the right amounts to different parts of the government with no govt assistance. they in turn would hire lobbyists who would wine and dine the congress till this was a no-go.
third, this would make all states have to have a uniform rate of state-taxation. places like New Jersey would no longer be able to tout no tax on purchases.
fourth, if inflation continues and a gallon of milk is $10 eventually, youre still paying 30% tax on that? a set tax rate wouldnt make sense when inflation was factored in, unless that set tax rate was variable every year. Take gas for example, 30% on gas? people would freak about that.
main argument: 30% is a daunting number in the minds of many people unless they look at the logic, but none of them will. gotta be realistic about it
it probably wont happen because there are people out there who believe taxes should be as low as possible. when they hear of a 30% tax rate on their pack of smokes, it'll cause an uproar. it will work in theory, but the sheer size of the the number 30% is scary enough until you seriously sit and think about how logical it is. trouble is, not too many people will make it to that phase.
second, that would create a major hassle for businesses who would have to channel the right amounts to different parts of the government with no govt assistance. they in turn would hire lobbyists who would wine and dine the congress till this was a no-go.
third, this would make all states have to have a uniform rate of state-taxation. places like New Jersey would no longer be able to tout no tax on purchases.
fourth, if inflation continues and a gallon of milk is $10 eventually, youre still paying 30% tax on that? a set tax rate wouldnt make sense when inflation was factored in, unless that set tax rate was variable every year. Take gas for example, 30% on gas? people would freak about that.
main argument: 30% is a daunting number in the minds of many people unless they look at the logic, but none of them will. gotta be realistic about it
Businesses already go through the hoops to send the taxes where they need to go, that doesn't change, the amounts do.
If a federal sales tax of some percentage were enacted, it would simply be tacked on to any state, county, local, and/or whatever other sales taxes (like the 1% Metro tax here) If the tax were 28%, then Houston would charge 36.25% tax on whatever it was you bought. Which is kinda staggering, yeah. But read on...
As far as the gas part, here in Houston (if not all of Texas, I'm not really sure), gas is taxed not by percentage, but by a flat 38.6 cents per gallon (IIRC.) So no matter what the price raising or lowering, you still pay 38.6 cents per.
However, if that's worked out as a percentage, guess what? It's about 24.5 percent tax on regular (assuming regular is $1.95. Then subtract 38.6=1.56*.245=38.22 so I'm off just a tad...) Premium, which is always .20 more a gallon, is actually cheaper percentage-wise at about 22 percent.
(Now we see show how 'spin' happens. This is how 'they' would try confuse people or obfuscate the issue. Isn't that a cool word? 'obfuscate.' Yeah. Almost as cool as 'gazebo', or 'bouffant'. Um...)
Irate sounding candidate for some office: "The people who are saving money are getting Ripped OFF!!!! The ones who use Premium gas pay LESS TAXES than the ones using Regular! We should tax those Premium gas buyers MORE!!!"
You get the idea, methinks. Not that anything like the above has ever happened...
Ahem.
Anyways, it's a flat set rate tax, not a percentage sales tax. Which I think is key. If it were done that way, that'd be just fine. Nobody would complain. Their milk would always have $.24 per gallon no matter what the cost to buy it was, so your milk would be $10.24, instead of $13 as you'd have it with the 30% tax. If milk went down to $9, that'd be shown as $9.24. See? Simple. And it's easy to see how people have to buy milk, or eggs, or whatever else is always purchased, and set the flat tax.
Oh, wait, they don't tax milk or eggs. Unless a service such as putting it on a tray for you to carry to your table is involved. THEN a tax can be put on it... Sheesh, it's complicated. Ok, so Ice Cream and Bread then. Tax ice cream and bread, because they're processed. Milk, eggs and flour are "raw" ingredients, and aren't taxed. Right? Yeah, I think I'm right.
Anyway a flat rate tax CAN be done, but I think a percentage is not the way to go. Just come up with a few cents or dollars per whatever it is, and put it in the price like they do gasoline. It'd be easy. All we'd have to do is organize a coup. Which really means we vote everyone out of office who doesn't support the flat tax, and vote everyone in who does.
Of course, that could be a really bad way to go, if you don't look at the overall issues that are being bandied about by the candidates, but we could all wear political blinders...
"Sure, I'm for a flat tax! I'm also for invading Antartica because it's just there for the taking. And when I'm elected, I'll fight for jobs in India, because lots of people there worship cows, ya know. I like cows. They're pretty. Oooh look! Flashlight beam on the floor! OOOH you're WAVING it about!!! I'm going to chase that and eat it!!! Vote for me... Gotcha! Wait, it's on the wall!" (BAMPF!!!)... thud.
"Is he dead?" "I dunno. But he's for flat tax, let's put him in office!"
I could see it now... Wouldn't that be a great government...
But let me state that in the end, what will prevent a flat tax, however it's implemented, is the CPAs. That's right, Public Accountants. H&R Block and the like. Independents. It's not the IRS, although they're plenty scary if they get sideways with you. Nope, there's MONEY in them thar tax stuffs, and they would be stupid to let a flat tax come to pass. And so it won't happen, unless a coup happens first.
Now, CPAs are pretty much friendly people and way smart. I have several clients that are CPAs. They are absoultely not worried in the least about this whole affair. Because they know they are huge numbers and can just beat the issue into the ground, kill it deader than dead, and all without firing a shot.
Because, guess what? ALL the candidates have CPAs. So there. The tax system will stay as it is. I win.
5/15/05, 05:55 AM
#9
AKA 1 BULLITT------------ Legacy TMS Member
Man, what a RANT, it's almost as long as the Word Association topic! 
But I like IT!
But I like IT!
5/15/05, 10:49 PM
#12
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wow george, your last post was at 6:58 in the morning? impressive, i thought i was the only one who woke up, powered on the computer, brushed my teeth, then checked for updates on this site
5/16/05, 07:09 AM
#13
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BTW, Spring forward, Fall back, right?
5/16/05, 08:19 AM
#14
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As far as the gas part, here in Houston (if not all of Texas, I'm not really sure), gas is taxed not by percentage, but by a flat 38.6 cents per gallon (IIRC.) So no matter what the price raising or lowering, you still pay 38.6 cents per.
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