Can anyone explain how social security and the IRS could be abolished, per one Republican candidate?

Question

What would happen to all of the money that has been taken from the elderly, up to the "boomers"? Is there some sort of reimbursement plan, or would there be total mayhem? Some of the elderly have no other income. And, how about all of the income tax, just for this year...total refund? I ask because I think it's all talk, no action!

Answer 1

This is probably an over simplification but as far as SS goes - if I had taken all the money deducted from my checks over my working years (I'm a 1949 boomer) and socked it away in the most basic interest bearing CD's for the 42 years I've been working, I'd have enough money to retire at an earlier age and with a larger check that the measly sum SS is going to give me because my funds haven't grown in the custody of the Federal Gov't. Those funds have been mingled in the general revenue stream that pays gov't bills over the years rather than put aside and saved. I don't know that you can eliminate the IRS but you could certainly simplify the tax laws and distribute the burden on a more equal basis. There are large numbers of people on bothe ends of the income spectrum that pay no taxes or reduced taxes because of loopholes in the tax laws. Its even standard op to give single parents a tax refund in excess of what they've paid in because of the head of houshold rules. You could eliminate the IRS and replace them with a smaller, less skilled group with a simple tax like a flat rate or value added (sales tax) that everyone had to pay.

Answer 2

I recommend that the better shrink for contributions be completed away with, and that the optimal payouts in retirement nevertheless proceed to be as they're, adjusted for inflation. Social protection isn't a "supply away" software yet one that all of us contribute to love a discount costs plan, and could be shielded from different makes use of through the government. Do you compromise or disagree and why? in case you're so apprehensive approximately it then why do not you; first positioned it decrease back into the deepest sector and make to have been no can take out money from it for their very own pastime, 2nd pay decrease back each penny you have borrowed from the two Social protection and Medicare, third take the unlawful immigrants off of it and people who come over right here yet never paid a penny to it, and finally have it the comparable for each individual; in different words government officers are to take section in it and in the event that they % some thing extra they do it on their very own without the tax payers investment it?yet, the economic stytem feeding the imbalances had never been truly replaced. They, a team of scholars, reported that each physique costs of pastime could be 3% or much less for each individual to alter into wealthy if needed (that must be authentic additionally to taces). the final economic undertaking could be, they pronounced, while there have been no costs of pastime. Why not attempt this answer? the wealthy could nevertheless be wealthy. My question is: while soial protection turns right into a undertaking related to federal expenses, why not paintings with a balanced or benefit funds and spend no extra desirable than is provided in, as any family contributors has to attempt for? Why not ban all loobying presents so as to get rules that serve the rustic? God bless usa.

Answer 3

it is theoretically sound.

the issues will come in the details.

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the basic philosophy of taxation in America is to tax [nearly] everything imaginable, but at low levels. This prevents "much" tax fraud as it just isn't worth fooling around with for 6 cents.

However, when the "FairTax" is implemented at a 30% rate, there'll be plenty of incentive for people to work off the books and not report or pay the tax their customers are supposed to pay. ["10% discount for cash and I say nothing, but we won't bother with a receipt."}

Think of everyone who works, or might work, for cash. Pool service guy, the dry cleaners, restaurants, lawn service, etc. All of them will have a 30% incentive to underreport their sales (and therefore the tax due on them) because they'll get to pocket the tax.

Some European nations have this problem already. Reportedly, there are two prices for plumbers in France -- the lower one applies if you pay cash and don't ask for a receipt. Tax dodging is reputed to be the national sport in Italy.

Yes, America already has tax evasion and by many of the same people. [Anyone believe that even half of waitpeople report all of their tips as income?]

but when the effective tax rate is raised to 30%, there will be more incentive to hide out.

Some people are claiming that the effective rate will have to be 49% to make up the necessary revenue because of all the cheating that will go on.

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Another "little" problem will involve ownership of long lived assets [houses and other properties].

New construction of houses and buildings will be subject to the 30% tax BUT existing propertiess will not. Since the marketplace abhors two prices for essentially the same good, what will happen is that the owners of the existing houses will all raise their prices to the new, higher level [over a few years].

Meanwhile, the construction industry will go into recession for however long it takes for prices to go up 30% in that area. In some cities, this could easily be 6 years or longer.

I know of no proposed solution for this side effect.

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NOTE: tax rate: while the "FairTax" literature talks about a 23% tax rate, that is figured as a percentage of the total receipts. In order to figure the rate on the net to the seller price, you have to divide 23% by (1 minus 23%) and thus you get 23/77 or 30% addon tax rate.

I used the 30% rate above because that is how everyone is used to figuring your state sales taxes.

Answer 4

By instituting a big sales tax, like 20%, the theory is that rich people buy more "stuff" and more expensive things, so they would pay more in taxes than the little guy who is struggling and cant afford the luxuries in life. There would not be an income tax on our paychecks.

I am not sure about that system yet.

Answer 5

That is the only thing I agree with Ron Paul about.

Instituting the fair tax plan would eliminate income tax and fund social security (along with all other government expenses) by instituting a national sales tax.

Answer 6

You need to read the book. It's a pretty good plan. Elderly would still get their money, that would not change.