Would you support a "User Tax System"?

Question

Would you support a tax system where your income is not taxed, but higher taxes are placed on the items you purchase?

I am not talking about high taxes on things like food or water or even clothing as those are things that everyone needs. I am talking about taxing movies, cars, electronics, things that are not a needed to survive.

If this was done then people who spent more money would be taxed more. The person buying a boat or hot tub or things like that would end up paying more taxes in the end. So basically the people who have the money to spend would end up paying more taxes.

I know a lot would have to be worked out to make sure the poor dont end up getting taxed to death, but if that could be worked out would you perfer this method of taxation?

and would you support a person running on this platform?

Also do you think this would level the playing field between the taxes paid between the classes?

I have not said I am for it or against it, I just want to see what others think and the pros and cons that are listed to using such a system.

Also could you do this for regular people yet have a different tax system for companies at the same time

Answer 1

I think it is one of the worst ideas for tax reform ever. Retail taxes are the hardest to actually collect because the possibilities for fraud is large. The higher the taxes the greater the motivation to avoid paying them. That is why countries that have consumption taxes use the VAT not sales taxes.
Consumption taxes are the most regressive form of taxation, because the less your income the larger fraction you need to spend to live. If every thing was taxed the rate would be 20 to 30 percent, and if you tried to raise money from luxury items the tax would be so high that it would cost less to go to another country to buy them.
Supporting such a plan would convince me that a candidate did not have a clue about how the economy worked, so I would not vote for them even if I agreed with them on other issues.

Answer 2

Generally I'd say no. Consumption taxes are regressive, income taxes are progressive.

But you talk about only taxing luxuries, making the taxes somewhat more voluntary, and I guess that's not a bad idea.

I am still suspicious of the plan, though. EVERY 'conservative' tax proposal ends up net regressive, shifting the burden of taxation off the shoulders of the rich and onto those of the middle class, starting with Reagan's 'tax cuts across the board'. Who would be taxed, and on what, would become a real argument, and in the end it would be a big net loss for working people.

Republicans years ago were whining that 'luxury taxes' were somehow immoral, just like inheritance taxes, capital gains taxes, etc., all the taxes that rich people pay.

And in the end who is to say what's a luxury? Is a TV a luxury? A DVD player? A refrigerator? A new car?

Answer 3

User taxes punish the poor because the wealthy can push cost off on others. Since wealthy spend a smaller percentage of their income in necessities they would gain from the user tax system. I favor a flat tax where there are no exceptions or shelters. Everyone that has earned income pays a flat 10%. Those retired that have no income other than pensions only pay on interest and dividends. Any entity that pays interest or dividends should automatically take out 10% and give it to the governement. Profits from sale of stocks etc would also be subject to the 10% tax. How about that for paying for liberal entitlement programs??

Answer 4

FOR TWENTY PLUS YEARS,I have been a proponent of the "Federal Sales Tax" on EVERYTHING EXCEPT Medicines, food, baby items.
We could immediately eliminate about 500,000 i.r.s. bureaucrats, and the yearly tax forms would be very simple 1 or no more than 2 pages long.
As it may well be, shortly, the Income Tax Form is going to be only one (1) page long with the following instructions.
1. How much $ did you make last year?
2. SEND IN THAT AMOUNT TO US, NOW !!!
3. ?No money to live on? Good, WE will take care of you, just as soon as we can take "OUR PAY" from your money !!!!

Answer 5

I would not support this system. That system taxes a lifestyle which in effect assigns a value judgment to purchases which is somewhat un-American in my opinion. Choosing which items get taxed based on an idea of what is needed seems even more intrusive.

As a taxpayer and a citizen in good standing, I would prefer to be taxed according to my income. As a human being it makes perfect sense to me that those who earn more, pay a greater percentage in taxes then those who earn less. As an American the idea of somebody taxing me because "I don't need it" is disturbing.

Answer 6

there are good things to this system... but there is a HUGE downside...

it would likely have a HUGE effect on consumer spending....

I know several wealthy people that "invest in their business" thousands of dollars, buying new "business cars" annually so they can write them off.... and they are basically free...

these people wouldn't do this if it wasn't a huge write off...

also, many of the wealthy don't spend a lot of their money now, and would most likely spend even less in your plan...

where do you plan to make up the billions of lost income (since the wealthy would be paying a similar amount)? even higher taxes on goods?

I wouldn't support that person, I think it would lead to a huge recession and jobs lost...

Answer 7

I would support it but just think of all the people who would be out of work if it went through. Most laws are designed to create jobs and such a tax would not create enough jobs to make the government happy.

Answer 8

I've been supporting that for a few years. It's much better than the current tax system, but, be assured that there will be "loopholes" in that system as well, as hard as it is to believe. Believe me, crooks can get around anything, and they do now, and they will later. God Bless you.

Answer 9

A VAT has been proposed many times. However without removal of income taxes in the same bill it won't pass.

Answer 10

It's called a consumption tax. Yes i would support it because i could choose to pay tax or not if i buy then i chose to pay the tax if i don't want to buy then i chose not to pay the tax. Sounds fair to me. And boycott those date raping Chinese. that's the last straw.