What do you think about a universal sales tax and doing away with the IRS.?

Question

Having a sales tax on all purchased goods would be a fair way to collect taxes for the government. Say, maybe 15% on all purchases. Then do away with the IRS!

Answer 1

I love the idea and it makes much more sense economically than the current systems. It does face major political hurdles. It would rob the politicians of the single most powerful way to manipulate behavior.

To those who say the rich would pay less: Sales taxes have NO deductions. The 'rich' would pay more in taxes than the 'poor' have in income. You don't even need Economics 101 to do that math.

Answer 2

This would be completely unfair to almost all taxpayers. First of all, lower income taxpayers would be paying the same tax rate as the higher income tax payers. We currently have tiered tax brackets in an attempt to make everyone pay the same proportion of their income in taxes. Also, a lot of homeowners would lose the advantage of being able to deduct their mortgage interest on their taxes. There are also many other deductions available out there that people would miss out on as well. As far as doing away with the IRS....there's going to have to be an organization which collects any sort of income for the government as well as pay for disbursements. So there would be no way we could get rid of the IRS.

Answer 3

I do not agree it would disproportionately affect the poor. Sales taxes are regressive taxes- a well known economic fact. It would just be another way to give the rich a tax break.

Answer 4

How would it be fair? Someone who makes only $10,000 a year would have to spend all of that income to for food and other necessities. Their tax rate is 15%. Someone who makes $100,000 a year can afford more, so they will spend more, say $20,000 on the food and necessities. Their tax rate is only 3%. So again I ask, how would it be fair to low income people?

Answer 5

No way it would hurt the economy and hurt the poorest of the citizens.