IRS and the tax code?

Question

What do you all think about abolishing the tax code as it stands now, and implementing a Federal tax on purchases, all purchases. This can be added to the state tax you pay at the counter. Then it would be a fair tax across the board. You buy, you pay tax. The more you spend, the more you pay. Eliminates the write off's the rich use to avoid taxes.

Upper ten pay 90 percent. Hmmmm, Warren Buffet doesn't think so, and he pays less in taxes then I do. No way for the rich to get around it. Everyone has to buy, cars, food, homes, etc. Where do you cpome up with the 3opercent number? Just a guess or factual? States seem to do very well with around 7 percent.

Wartz: How do you know how much I purchase a year, do you have a clue? Or are you just running you pen because you work in the tax business like the rest of the naysayers. To my figures I would actually save money, or even break even. You probably think rasing taxes means more money comes inro the taxman. More ignorance on your part. Even a flat tax (which they say would work at 10%), would be better then our current system.

Answer 1

It would be an excellent idea, and it would encourage saving and investment, but ONLY IF you could somehow drive a stake into the heart of the income tax so that it could never be resurrected.

Congress being the money whores that they are, they'd pass the national sales tax and then immediately reinstate the income tax too. I don't know how you'd prevent that, and I wouldn't trust them not to do it no matter how fervently they promised.

Answer 2

Listen to the professionals! This WILL NOT be anymore beneficial to poverty, lower or middle class families. In fact, and as mentioned before, it will only INCREASE the overall effective percentage these people pay.

We all would love tax simplification. However, the idea of abolishing the tax code is a huge task. Anything change like that costs BILLIONS to implement. And the opportunity for fraud (relating to Fair Tax, which is what you basically described) is HUGE.

Also, taxpayers seem to forget something else - the forty plus states which have income taxes. States would have to decide, individually, whether or not to conform to the 'new' federal rules.

A very, VERY big mess indeed!!!!

Replacing a tax systems isn't as easy as clearing the library shelf and replacing it with new books. It would be the equivalent of replacing the entire vascular system (all the veins, arteries, capillaries, etc.) of a human being.

Answer 3

No thanks. The wealthy would be the beneficiaries of that as they amass their wealth, not spend it. If you give one group a break, someone else has to pick up the slack. That would be the poor and middle class in this case.

It would have to be levied at 30% to raise the same revenue as the current graduated income tax does. So, if you buy a new $200,000 home you'd have to pay $60,000 in tax. Or a new $20,000 car and pay an additional $6,000 tax just to get your tags. Good idea? Didn't think so!

And what makes you think that the rich get off free right now? The top 10% of all earners pay over 90% of all taxes. And the bottom 50% pay only 4%. Sounds like they're covering their share, you reckon? (These numbers are from the IRS website. Look up tax stats there.)

Warren Buffett is an exception to the norm as most of his income is in long-term capital gains. Unusual even for the rich. If it were short term gains, he'd pay MUCH higher taxes. His base salary is "only" $100,000 per year from Berkshire Hathaway. That's why his tax rate is so low. Even so, he still pays billions in taxes every year.

The 30% sales tax rate is factual and is the one that proponents of the Flat Tax admit to. They like to call it an "inclusive" rate of 23%, but it works out to 30% when added on as sales taxes are. The cost of Federal social programs and national defense are things that the states don't have to fund. If they did, they'd have MUCH higher taxes than they do now.

Answer 4

The rich as a group would benefit greatly from this. It would hit the working poor and the middle class hard.

I guess each person's definition of "fair" is different. Tell the parents raising 3 kids on $26K a year that now they will not only be paying taxes where they haven't been under the current system, but they'll also lose their EIC - they might forget to thank you for this new "fair"system.

The main plus I see for this type of system is that it taxes the people working under the table.

Answer 5

The rich would most likely buy in a corporate name and still get a tax break.

I think no matter how it is done, the rich will figure out a way around taxes.

Besides, the ones making the tax laws are rich. So who do you think they will favor?

Answer 6

What do you think about increasing your own tax burden? This is what would happen to most people in the country if this loony tunes idea ever passes. It has gone nowhere in congress for eight years for good reason.

Answer 7

I think it is a great idea. And one of the presidential candidates is proposing to do just that.