How do you feel about a National Sales Tax to replace the current taxing system?

Question

Our Tax system has needed a major overhaul for years. I have been a strong supporter of the national sales tax. With a national sales tax everyone pays their fair share. If you spend, you pay, if you don't, you save. This eliminates paper work required to be filed by individuals for federal taxes and would probably reduce the size of the IRS. I don't believe the IRS can be completely eliminated because some agency has to be in charge of the collection of these taxes.

At a 10% national tax rate, $100,000,000,000 .00 of spending would produce $10,000,000,000.00 in tax revenue.

What does that mean for the consumer? Let's see. A night out for dinner and a movie would cost around $100.00. Most local tax rates are around 6.5 to 8.5% , so lets use 7.5% as the average. With the national sales tax, a $100.00 night out would become $117.50, but keep in mind that the 15% income tax would now be going home with you. Therefore on $100.00 of income you would pay $15.00 in income tax plus $7.50 sales tax when you spend that $100.00 for a total out of pocket of $122.50 as opposed to the $117.50 you would pay with a national sales tax. A savings $5.00.

You do the math....

Answer 1

I like your idea. I also like the idea of a flat tax. They both make sense and the tax code would be reduced to one page and the IRS would be out of a job so it will never happen.

Answer 2

I'm in favor of it. The Constitution was set up for taxation based upon the economy (Article I, Section 8)."Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States."

The FairTax is a good start, but needs refinement on the "prebate." I think an exemption card (sort of like a business being exempt from paying gross receipts tax) would be better. However, just changing from income taxation to sales tax to raise revenue is just one step. To raise the necessary revenue, the tax would need to be much higher than 10 percent at current government spending levels. Reign in the voracious appetite of the feds & require the federal government to live within its means - like the people have to do - is a necessary component.

Answer 3

If we paid a national sales tax on goods and services instead of an income tax, that would be more than fair. It encourages saving, eliminates the IRS, and with all we spend as Americans (and all that is spent in America by travelers to our country), we could make it work. A "luxury" tax for items over $100,000 (not including housing) would only affect the higher income level people. And if you don't want to pay taxes, you can just recycle, repair and reuse instead of shop, shop, shop!

Answer 4

Id combine both:
Flat & Sales Tax Plans.

Flat Tierd Tax for Incomes ONLY
Allowances for non Profits, giving, Investing OK.
Sales Tax for those under 20K income a year ONLY.
Income below 20K Never taxed.
CUT IRS DC budget
Scrap Tax Code.

Have Congress live under laws it passes since 1935.
Then wed have Real Change.

Answer 5

The math says that the rate would need to be closer to 30%, maybe more. (That would be on top of the current state sales tax levies, don't forget.)

The poor would be devastated by such a tax. The pay no income tax now and a limited sales tax. Close to 100% of their income goes to necessary goods and services for basic survival while the total tax levy on the wealthy would drop dramatically.

Black marketing of goods and services would increase dramatically -- and we all know who runs THAT type of activity.

Monitoring of all businesses to ensure that the tax was charged and rendered in would require as much effort by the IRS as the current income tax does.

A graduated income tax is the fairest of all taxes. It takes in to consideration the taxpayers ability to pay the tax. Sales taxes make no such differentiation.

I travel and work often in Europe. They have national sales taxes ranging from 15% to 25%. Imagine $20 for a burger that costs $8 in the US. That's what I had for dinner this evening in London. My work colleague was in Denmark (much higher taxes) and paid nearly $40 for a burger at his hotel there.

No thanks! I'll stick with the current system, thank you very much!

Answer 6

Sounds too simple... a tax code that taxes spending, so those that spend the most pay the most (including illegals, drug-dealers, etc., that aren't paying taxes now). Something simple in Federal Government? As much as many of us tax burdened citizens would love to see it happen, simple and fair will happen only when Hell freezes (maybe).

Answer 7

One word, No.

Get rid of Payroll taxes. that's simple enough.