We The People

[Zeb_Carter]

What was asked for and what Congress spewed out were 2 different things. A true flat tax would have no deductions or other loopholes of any kind. What was don then was a bit better but left the cottage industry of tax accountants and lawyers fully employed fudging they system.
The flat tax I want has zero wiggle room.

Except that black market underground cash payment system that is now prevalent throughout America. I know at least three people that work for cash only and never pay a dime in taxes, flat or not.

At least with the consumption tax when they went down to the local Wal-Mart and bought something they would pay taxes no matter where they earned the cash.

 

[Boxlicker101]

Except that black market underground cash payment system that is now prevalent throughout America. I know at least three people that work for cash only and never pay a dime in taxes, flat or not.

At least with the consumption tax when they went down to the local Wal-Mart and bought something they would pay taxes no matter where they earned the cash.

Do all these people live and shop in states where there is no sales tax? Do they never drive and therefore pay no fuel tax? Do they own no property and never pay tax on it?

I repeat, the USA has NEVER had a flat tax on income, at least as a flat tax is usually defined. That would be something like: A percentage of all income in excess of a certain minimum. If the minimum is $50,000 and a person has income of $55,000, that person owes that percentage of $5,000.

I will concede that certain revenues, such as insurance payouts, inheritances and maybe some more should maybe be excluded, but I would not exclude dividends, interest income or capital gains.

 

[Zeb_Carter]

Do all these people live and shop in states where there is no sales tax? Do they never drive and therefore pay no fuel tax? Do they own no property and never pay tax on it?

I repeat, the USA has NEVER had a flat tax on income, at least as a flat tax is usually defined. That would be something like: A percentage of all income in excess of a certain minimum. If the minimum is $50,000 and a person has income of $55,000, that person owes that percentage of $5,000.

I will concede that certain revenues, such as insurance payouts, inheritances and maybe some more should maybe be excluded, but I would not exclude dividends, interest income or capital gains.

But they don't pay income tax, 10% of nothing = 25% of nothing - Zero, nada, zip. But 23% of what ever they buy is 23% of the price of the item(s) they buy.

And with all those IRS agents out of work, the states could hire them as enforcement agents.

So I'm in favor of doing away with all income taxes, personal and corporate, along with SS / Medicare taxes, death tax, capital gains tax, interest /dividend taxes. Everything.

And I do make a lot of purchases and none of them on the black market so I would be paying my fair share.

 

[Boxlicker101]

But they don't pay income tax, 10% of nothing = 25% of nothing - Zero, nada, zip. But 23% of what ever they buy is 23% of the price of the item(s) they buy.

And with all those IRS agents out of work, the states could hire them as enforcement agents.

So I'm in favor of doing away with all income taxes, personal and corporate, along with SS / Medicare taxes, death tax, capital gains tax, interest /dividend taxes. Everything.

And I do make a lot of purchases and none of them on the black market so I would be paying my fair share.

This would be an extremely inflationary tax, with the price of everything suddenly raised by 23%. It would also be an extremely regressive tax, with everybody paying the same percentage on whatever they buy, including food, clothing, etc. Would this apply to services? Would insurance premiums increase 23%, and rentals and prices of property and everything else?

 

[Zeb_Carter]

This would be an extremely inflationary tax, with the price of everything suddenly raised by 23%. It would also be an extremely regressive tax, with everybody paying the same percentage on whatever they buy, including food, clothing, etc. Would this apply to services? Would insurance premiums increase 23%, and rentals and prices of property and everything else?

The bill does away with Corporate Income taxes, which are included in the price of their products to the tune of 22%. So, the 23%, replaces the 22% that are already in the cost of goods.

And if you think they won't do away with that cost, then you don't buy there product because the manufacture next to them on the shelf has and their price did rise.

 

[Boxlicker101]

The bill does away with Corporate Income taxes, which are included in the price of their products to the tune of 22%. So, the 23%, replaces the 22% that are already in the cost of goods.

And if you think they won't do away with that cost, then you don't buy there product because the manufacture next to them on the shelf has and their price did rise.

You seem to keep ignoring the fact that that 22% tax, which should be higher, is on PROFIT, not on cost. Most products do not have a 22% net profit margin, so the corporations who are providing those products would actually be losing money if they reduced their goods by that much. How long do you think they would stay in business?

For a hypothetical example, say a product costs $80 to produce, and that is the fully amortized cost. Let's say further that the manufacturer marks it up by 25%, to $100, giving themselves a 20% profit, which is quite high, but we are being hypothetical. 22% of that $20 profit would be $4.40, which would be the amount the manufacturer might be prevailed on to reduce their selling price.

If they did, and sold it for $95.60. the 23% consumer tax on that would be $21.98, which is five times as much as the corp. is currently paying on their profit.