abolish the IRS?

Question

do you think it would be better to abolish the irs and go with a flat tax, or a fair tax, where the gov't taxes the goods that we buy? (i know if my paycheck was fatter, id be spending me more money on goods. not to mention all the money that drug dealers and other criminals make and people who get paid under the table, all that money would also be taxed when they shopped)

would the gov't make more money with a fair tax?? (considering if you do your deductions right on your taxes, they have to pay you back at the beginning of the year)

it seems like, if you tax what i buy, then you can keep all that tax (within reason) but to tax money that i earn, then tax the money that i use, then tax my possessions! where does it stop?

do you think that people would vote for a measure like this?

or is it too ingrained in the US mindset that we need to pay in?

or would local/state taxes increase by that much that we would still be be feeling the pinch?

Answer 1

Yes, we'd be better off for far too many reasons to go into in this forum. But here's the high points.

1. The fair tax ablolishes all income and payroll taxes (social security, medicare all of them), its not a value added tax like the European's pay but a one time retail sales tax.
2. You don't need to create a government organization like the IRS to replace the IRS. Most states already have a system for the collection of retail sales taxes, the Fed's just need pay the States to collect the taxes.
3. It's not an extra tax because the cost of social security, medicare and income taxes are already embeded in everthing you buy. One the payroll taxes are eliminated the sales taxes just replaces it.
4. The benefits of this system are that exports will not be taxed but imports will. This will make our exports cheaper and increase the cost of imports improving our trade balance and keeping jobs here. There will be no capitical gains taxes, or taxes on earned interest so the tax will encourage savings and investment.

Most of the opposition, is in one of two categories, 1 - people that know next to nothing about the fair tax, or people that think the present system is so entrenched it can't be changed.

Answer 2

Abolishing the IRS will never happen, even if we did go to a fair tax or flat tax. The IRS will still be there to actually collect the tax only now from the businesses that are collecting it from us. And this is not a new proposal, It's been kicked around for years.

And even though Ron Paul thinks his ideas are the only ideas that are worth anything, He is actually so wrong on so much.

Answer 3

I am for a straight consumpution tax. Trillions of dollars are offshore and would come back to the US. Illegals would have to pay the same taxes as everyone else and the billions it costs to operate the IRS would be eliminated. It is simple the more you spend the more you pay. The less you spend the less you pay. It would also balance out responsibility to everyone. If your business does not collect and pay the government the taxes due the would face fines and possible suspension of there business licenses that could lead to closure.

Answer 4

It sounds good, on the surface. But then you still have tax, you still have to administer it. You still have to bank it, account for it, pay it out. So you will need and infrastructure. Get some people to collect it, administer it, account for it. Wait, isn't that called the IRS?
How do you tax under the table money? They also spend it under the table. You may be onto something, but it needs a serious amount of refinement.
Ron Paul wants to get rid of the IRS? Ask him what he will replace it with. I doubt you get an answer. It is easy to propose things, making them work takes more then dreaming.

Answer 5

A lot of European countries use a form of flat tax already, but some add a "consumption" tax on top for luxury items such as pricey cars yachts etc. Id prefer some form of a broad based consumption tax like the one proposed by FairTax.org it makes a lot of sense and its gaining momentum with the grassroots movement and with congress too. Something like 70 congressmen have already in some way endorsed it. It makes a lot of sense, course it has some bad points too but i think those kinks can be ironed out easily. Just check out FAIRTAX.ORG they can explain it far better than i can!

Answer 6

the thing is the government can only tax interstate items, they can't tax items that are only state.
fair tax wouldn't give enough money to the government to function.

and on the side note. its also a question of weather congress, and the people are willing to change the constitution/ tax system.
- the answer is no, congress has bigger issues to deal with then changing the tax system.

taxing auction sites like ebay would be invasion of privacy, each transaction is made person to person,
the government taxes ebay itself, because they are making large profit, and ebay adds fees to cover it so the goverment taxes people just not directly.

Answer 7

Excellent question! Personally, I would be happy with a flat rate income tax as long as that flat rate applied to everyone. I agree with you though that being taxed on our income, taxed when we spend it then taxed again for our possessions is ridiculous.

Answer 8

I believe more people are waking up to the Fair Tax system, I personally know several people who are in support of it (including me).

Answer 9

Something like a 2% tax on 'every' financial transaction sounds good.

Answer 10

i'd go with a sales tax.
But how do we tax the internet sales like ebay?