Why are taxes so high?

[bobzills]

It’s amazingly interesting. No more IRS. No tax forms for anyone … not for corporations, not for individuals. No estate tax.

Boortz and Linder have appeared many times to give talks. I’ve seen one or both on www.booktv.org at least twice. Check it out.

www.booktv.org and scroll down on the batch of featured videos…

Yes. It makes a lot of sense to just elimiate all these complicated loopholes on the income tax available to the rich and wealthy and replace it with a much simpler universal sales tax paid by everyone at the same rate.
BTW, thanks for the link to booktv.org.

 

[Al_Masetti]

While most countries have lower corporate income tax rates, they also typically have value added taxes, which are basically a national sales tax. For example, Ireland has a 12.5% corporate income tax, but a 21% VAT.

How much better is that than a 35% corporate income tax and no VAT?

I dunno. Ireland is booming; the rest of Europe is stagnating.

 

[goofyjim]

I dunno. Ireland is booming; the rest of Europe is stagnating.

I agree on eliminating the income tax and implementing the sales tax but 21% is a little steep of a sales tax for everyone to be paying.

 

[Texas_Roofer]

I agree on eliminating the income tax and implementing the sales tax but 21% is a little steep of a sales tax for everyone to be paying.

I agree 21% has too much incentive to avoid paying. For example qualifying the proper use of Tax id’s would seem to need as many pages as our current tax code. I am all for changing the tax code and even willing to attempt this however my guess is only partial success at best would occur. For example a $26,000 car for an individual would become a $33,000 car but could easily be a $24,000 car for a business!! So we would simply have to be a business of some kind, any kind to avoid the taxes. However if we avoid the taxes then either more tax laws or higher taxes must follow.

 

[goofyjim]

I think we have finally demonstrated it, no tax, even the sales tax, is going to be completely fair. The only thing to do is to try and plan a budget that covers the cost of necessary programs while keeping all taxes to the bare minimum. Welfare programs are necessary to keep people housed and fed while all those pork barrel projects can go.

 

[Ridgerunner]

I have heard it said that consumers pay the same taxes under either a sales tax or a corporate tax. If the former, it’s direct. If the latter, the corporation builds the tax into its pricing and the consumer still pays it. Competition between corporations would tend to hold prices down, but it would do that under either scenario. If all producers of a product pay corporate income taxes, they are all going to try to recover those taxes from the consumer.

One thing a VAT would do is reward the saver versus the spender. No question about that. If you are content to buy a home at less than the highest you can possibly pay for; if you buy a used car instead of a new one; if you eat more staple foods and less refined foods; if you buy “off the rack” clothing instead of tailored or more fashionable clothing; if you go to the corner barber instead of the hairdresser; if you read books instead of watching cable on a big screen, you win.

Likely the biggest winners would be country people, most of whom don’t buy high-end consumer goods anyway, and older people in reasonably good health. The biggest losers would be the people who “keep up with the Joneses”. Younger people with children would be moderately on the short end. But young couples who can afford for the wife to stay home would be moderate winners. The stay-at-home Mom’s labor would be worth a great deal more. Couples, both of whom work, spend a tremendous amount on consumer goods because they have to opt for convenience and have to duplicate all kinds of expenditures; cars, clothes, gasoline, meals away from home, etc. Lots of times that’s a zero sum game even now. It would be interesting if that consideration caused more Moms to stay home creating VAT-free goods and services, causing employers to have to be more competitive with wages, thus causing the husband’s tax-free wage to go up. Might not happen, but it’s interesting to speculate about. The VAT would encourage gardening, that’s for sure. Might encourage people to find ways for their kids to be productive instead of sitting around the house in front of the computer all day or “hanging out” with friends.

Interestingly, it would tend to moderate the cost of housing because it would discourage purchasing on the high end. Right now you get a deduction for home mortgage interest and pay no sales tax at all on the purchase. With a VAT, you would pay tax on the purchase of the home and no deduction for mortgage interest. It would take a lot of air out of the prices of some of these huge houses people are building. One suspects new houses would get smaller and older houses’ prices would have to drop.

With the income tax, your attempts to build family assets is burdened by a pretty big monkey sitting on your shoulder, unless your asset-building is also deductible. But the way that works doesn’t make a lot of sense. If I buy a machine or cattle with my earnings, I can deduct it entirely if it’s under the maximum. If I save it or buy stock with it, I can’t deduct a penny of it.

It would likely at least reduce the attractiveness of foreign goods. If the American company pays no income tax and the sales tax on the foreign and domestic products is at least the same rate, it seems to me it would level the playing field some.

VAT might be a good thing. But what would all the accountants and tax lawyers do for a living?

 

[Texas_Roofer]

… If all producers of a product pay corporate income taxes, they are all going to try to recover those taxes from the consumer…

but they don’t pay that tax, and won’t if the change occurs

One thing a VAT would do is reward the saver versus the spender. No question about that. If you are content to buy a home at less than the highest you can possibly pay for; if you buy a used car instead of a new one; if you eat more staple foods and less refined foods; if you buy “off the rack” clothing instead of tailored or more fashionable clothing; if you go to the corner barber instead of the hairdresser; if you read books instead of watching cable on a big screen, you win.

the house is a building and buildings often belong to business. if the assumptions are correct the price of the large building would be less, so maybe bigger house, finer business meals, expensive clothes would all increase?

Likely the biggest winners would be country people, most of whom don’t buy high-end consumer goods anyway, and older people in reasonably good health. The biggest losers would be the people who “keep up with the Joneses”. Younger people with children would be moderately on the short end. But young couples who can afford for the wife to stay home would be moderate winners. The stay-at-home Mom’s labor would be worth a great deal more. Couples, both of whom work, spend a tremendous amount on consumer goods because they have to opt for convenience and have to duplicate all kinds of expenditures; cars, clothes, gasoline, meals away from home, etc. Lots of times that’s a zero sum game even now. It would be interesting if that consideration caused more Moms to stay home creating VAT-free goods and services, causing employers to have to be more competitive with wages,…

one problem today is we need to be a business to “report” our income because the IRS is so ruthless with our income. It is not your ability to make money but your ability to use it! Today you hide it to use it, under the new system that would explode into the standard

With the income tax, your attempts to build family assets is burdened by a pretty big monkey sitting on your shoulder, unless your asset-building is also deductible. But the way that works doesn’t make a lot of sense. If I buy a machine or cattle with my earnings, I can deduct it entirely if it’s under the maximum. If I save it or buy stock with it, I can’t deduct a penny of it.

your machines hides your income, your building used to do that however after everyone was proven to qualify the congress had to change the law

i would propose we eliminate tax id’s rather than add VAT. In theory that would be redundant, however in practice the lack of tax id’s would make it difficult to hide income from taxes. the reason is that upon purchase the tax would be due, no time to expense it down. The reverse problem is if after 12 steps the good becomes heavily taxed right? will is twelve 2% rates more than one 27% rate? I believe the key to make everybody pay every time then it is clear who receives the government checks rather than who did not contribute their fair share

 

[LCMS_No_More]

I think we have finally demonstrated it, no tax, even the sales tax, is going to be completely fair. The only thing to do is to try and plan a budget that covers the cost of necessary programs while keeping all taxes to the bare minimum. Welfare programs are necessary to keep people housed and fed while all those pork barrel projects can go.

The thing about that is, how does one define a pork-barrel project?

Aside from the obvious bridge-to-nowhere…

Would it be a funding a traffic-relieving highway and transit improvement plan in a particular city?

Would it include providing funding assistance to cities so they can improve their aging libraries and parks? (I don’t know for certain, but I’m sure cities get some federal funding for these kinds of things…on the State level, I’m certain).

Personally, I would define a pork-barrel project as something that has little objective use to a community except to increase the political fortunes of any particular politician or is so outrageous in its scope and cost relative to who will be served by it.

 

[Al_Masetti]

I agree on eliminating the income tax and implementing the sales tax but 21% is a little steep of a sales tax for everyone to be paying.

The sales tax is transparent … meaning you see exactly what the government is taking.

Whereas, with all the different income related taxes, the 65000 pages of rules and regulations make it impossible to know what the government is taking.

However, the sales tax would replace all income taxes (individual, corporate, dividend taxes, etc), all of the Social Security payroll taxes (both the employee half and the employer half and the Medicare tax), the estate taxes, etc. No more tax forms … consider that the income tax burden is both the money AND puzzling through the tax code … [for “fun”, read IRS Pub 590] … AND no more rearranging your financial affairs to get the best tax deal even if the revised economics don’t work.

The existing tax “scheme” that we suffer under is the opposite of transparency.

So, get your library to get the books on the Fair Tax. They are excellent. And visit www.booktv.org and view the presentation by Neal Boortz.

BY THE WAY… I was looking at some BookTV programs last night and Mark Skousen gave a FANTASTIC presentation on how personalized Social Security is sweeping the world. So far, if I recall correctly, he said that 21 countries have adopted personalized Social Security. Chile was the first. I’ll post a link later, but visit www.booktv.org and check out Skousen’s presentation.

It’s all about transparency.

Excellent. Ask your library to get his books.

And also visit www.atr.org

 

[cynic]

so replace income and business tax with gst, and the governments only role will be to pay for the justice system and the military. Yes we get it.

 

[rlg94086]

The sales tax is transparent … meaning you see exactly what the government is taking.

Whereas, with all the different income related taxes, the 65000 pages of rules and regulations make it impossible to know what the government is taking.

However, the sales tax would replace all income taxes (individual, corporate, dividend taxes, etc), all of the Social Security payroll taxes (both the employee half and the employer half and the Medicare tax), the estate taxes, etc. No more tax forms … consider that the income tax burden is both the money AND puzzling through the tax code … [for “fun”, read IRS Pub 590] … AND no more rearranging your financial affairs to get the best tax deal even if the revised economics don’t work.

The existing tax “scheme” that we suffer under is the opposite of transparency.

So, get your library to get the books on the Fair Tax. They are excellent. And visit www.booktv.org and view the presentation by Neal Boortz.

BY THE WAY… I was looking at some BookTV programs last night and Mark Skousen gave a FANTASTIC presentation on how personalized Social Security is sweeping the world. So far, if I recall correctly, he said that 21 countries have adopted personalized Social Security. Chile was the first. I’ll post a link later, but visit www.booktv.org and check out Skousen’s presentation.

It’s all about transparency.

Excellent. Ask your library to get his books.

And also visit www.atr.org

Library?? That is ***so ***20th Century.

fairtax.org/site/PageServer?pagename=about_main
There is a lot of great FAQs people can check out, so they can truly be informed rather than say they “get it,” when they have no clue whatsoever.

 

[Al_Masetti]

I also came across Mark Skousen’s presentation on his new book, “Econopower”.

The presentation is excellent.

booktv.org/program.aspx?ProgramId=9272&SectionName=&PlayMedia=No

And is directly relevant to the topic.

His books are great, but you’d go broke buying all of these books yourself. So ask your library to get them. That way they can warehouse them for you and others can share in your joy.

 

[Al_Masetti]

Taxes are high because they are not transparent

 

[PLAL]

Taxes are so high because there is so much wasteful spending and coruption in our government.

People seem to want government to do everything for them but in most instances the private sector and charitable organizations do it better at less cost.

We need to cut out wasteful spending. The first place I would start is start sending government money to Planned Parenthood so they can kill our babies.

 

[bobzills]

Federal taxes are high because of the war profiteers and the amount of money spent on war preparations and American bases overseas.

 

[mary_bobo]

If you look at a pie chart as to government spending you will see that “entitlements” eats up a huge portion of the budget. We are a nation of people who expect the government to do everything for us.

 

[peregrinus_WA]

If you look at a pie chart as to government spending you will see that “entitlements” eats up a huge portion of the budget. We are a nation of people who expect the government to do everything for us.

That is Socialism that is heading towards Marxist Socialism for you.