Republicans Plan Push for Elimination of IRS

[Destino]

Originally posted by Kilmer17

Destino, what if it actually raises consumption? Do you have anything to back up the claim it would decrease?

A consumption tax will penalize those that spend more. It motivates people not to spend money by taxing them less if they refuse to spend.

From what I've seen the largest factor in getting the middle class to spend is a stable economy showing high consumer confidence. Every holiday season the retail sales are counted up and drops are attributed to the before mention factors.

Do you think people are more or less likely to go on a spending spree if they know they will be taxed higher by doing so?

It's the same logic behind cutting taxes for investments. If you cut them people are more likely to invest. If you raise them people are less likely to invest.

[Kilmer17]

The problem with that assumption is that you dont account for peoples reaction to having more money in their pocket.

Is Joe Smith more likely to buy a product if he has more money to begin with even if it costs more?

I would say that he would be. But isnt it better that he have that CHOICE rather than to be taxed whether he buys that product or not.

Im curious about your answer to my ? above. Ignore everything you've read or heard for a minute and assume nothing.

If we can get rid of the IRS and income tax and replace it with a NAtl sales tax that leaves the bottom tax brackets with the same or more actual dollars in their pocket after the month is through, would you support it?

[jbooma]

Originally posted by Destino

Do you think people are more or less likely to go on a spending spree if they know they will be taxed higher by doing so?

They will go on a spending spree when they see no taxes taken out on their paychecks.

This is what everyone will notice. The tax on products won't matter as much since most likey you are only talking about a 4 to 5% of what it currently is at. Only if you get high ticket items will you see a difference.

[Destino]

Originally posted by Kilmer17

If we can get rid of the IRS and income tax and replace it with a NAtl sales tax that leaves the bottom tax brackets with the same or more actual dollars in their pocket after the month is through, would you support it?

-- I don't see any reason to see this plan getting rid of the IRS. Perhaps you can change the name but it seems this plan would require MORE oversight not less. Notice this plan has not accounted for deductions which would have to exist or charities would have the rug pulled out from under them over night.

-- Regardless of what happens to the lower tax brackets I oppose any plan that discourages spending. You stated that someone who has more would spend more, but you failed to apply the new system. The system charges more when you spend more.

Thus if you reached the 25k point, you would know from then on anything you buy at all is being taxed higher. Being that I haven't seen a plan to have your employer deduct anything this is the scenerio.....

Picture a bill with a amount left blank. Once you passed the consumption tax mark that amount would increase with every purchase you make. Would you buy that new car or wait until next year and try to squeeze it in under the lower tax mark? Or would you buy it anyway and know you had to write a monsterous check at the end of the year?

[Destino]

Originally posted by jbooma

They will go on a spending spree when they see no taxes taken out on their paychecks.

This is what everyone will notice. The tax on products won't matter as much since most likey you are only talking about a 4 to 5% of what it currently is at. Only if you get high ticket items will you see a difference.

I haven't seen that this tax would be charged at the register. This is a bill that your spending activity will increase as you spend. Knowing that you have to write a huge check that will get bigger everytime you buy something is a huge motivator to not spend.

[Kilmer17]

Again, ignore all you've heard about this plan or that plan and see the question as simply philisophical in nature. Dont apply it to anything.

[SnyderShrugged]

Originally posted by Destino

-- I don't see any reason to see this plan getting rid of the IRS. Perhaps you can change the name but it seems this plan would require MORE oversight not less. Notice this plan has not accounted for deductions which would have to exist or charities would have the rug pulled out from under them over night.

-- Regardless of what happens to the lower tax brackets I oppose any plan that discourages spending. You stated that someone who has more would spend more, but you failed to apply the new system. The system charges more when you spend more.

Thus if you reached the 25k point, you would know from then on anything you buy at all is being taxed higher. Being that I haven't seen a plan to have your employer deduct anything this is the scenerio.....

Picture a bill with a amount left blank. Once you passed the consumption tax mark that amount would increase with every purchase you make. Would you buy that new car or wait until next year and try to squeeze it in under the lower tax mark? Or would you buy it anyway and know you had to write a monsterous check at the end of the year?

I definitely see where you are coming from.

Wouldnt an organized savings and investment plan work to offset the consumption amount though?

I can see wher oversight would be neccessary and thus make the IRS elimination plan moot.

Say you realize that you are at $10,000 consumption in July. If your 401K dollars and other savings figures are planned out to at least equal that amount for the remainder of the year, you'd be back at almost zero consumption and be able to spend back to the $25,000 level.

[jbooma]

Originally posted by Destino

I haven't seen that this tax would be charged at the register. This is a bill that your spending activity will increase as you spend. Knowing that you have to write a huge check that will get bigger everytime you buy something is a huge motivator to not spend.

How can they track what you buy then?? If you just use cash to buy anything how would they know.

The only way this type of tax could work I think if the item is taxed when purchased. At least that is what I think.

[SnyderShrugged]

Originally posted by jbooma

How can they track what you buy then?? If you just use cash to buy anything how would they know.

The only way this type of tax could work I think if the item is taxed when purchased. At least that is what I think.

I think there would be little need to track specific purchases beyond us keeping grocery and utility receipts(would be used to offset cunsumption stats)

Otherwise, you would simply subtract what you have saved from what you earned to get the dollar figure used to calculate tax burden.

[Destino]

Originally posted by jbooma

How can they track what you buy then?? If you just use cash to buy anything how would they know.

The only way this type of tax could work I think if the item is taxed when purchased. At least that is what I think.

-- I don't think they plan on tracking what you buy. If they did no one would support this except people like you that hate privacy and think tracking everything we do all the time would make the world a better place. They plan to tax on total spent is what I read into this.

In order to determine how much you spent they need only look at your amount earned and subtract the amount you still have. Being that this would never work becuase you'd be taxed for sending your kids to college or donating to your local church deductions would have to be allowed.

How is that LESS COMPLICATED then simply taxing based on income minus deductions. This plan would not only fail to close the IRS it would make it bigger and far more intrusive as they'd need to see how you spent your own money.

[Destino]

Originally posted by Kilmer17

Again, ignore all you've heard about this plan or that plan and see the question as simply philisophical in nature. Dont apply it to anything.

If you don't apply anything then you can't discuss tax policy. Effect is the main concern in taxes.

[jbooma]

Originally posted by Destino

-- I don't think they plan on tracking what you buy. If they did no one would support this except people like you that hate privacy and think tracking everything we do all the time would make the world a better place. They plan to tax on total spent is what I read into this.

In order to determine how much you spent they need only look at your amount earned and subtract the amount you still have. Being that this would never work becuase you'd be taxed for sending your kids to college or donating to your local church deductions would have to be allowed.

How is that LESS COMPLICATED then simply taxing based on income minus deductions. This plan would not only fail to close the IRS it would make it bigger and far more intrusive as they'd need to see how you spent your own money.

First off I support privacy but not if you are breaking the law smarta$$

Like I said the only way something like this would work is if the tax is applied to the items you are purchasing. If it is up to us to tell the government what we bought that would never work.

In order to determine how much you spent they need only look at your amount earned and subtract the amount you still have. Being that this would never work becuase you'd be taxed for sending your kids to college or donating to your local church deductions would have to be allowed.

Would never work.

I take that back, if we got rid of cash and went to a smartchip buying technology then it would work.

[Guest SkinsHokie Fan]

The national sales tax promotes savings and investing which has a bigger impact on the economy then just pure spending.

Destino, you are gonna have to find a thread from January of '03 and see what has the largest impact on economic performance. According to the charts I used it wasn't consumer spending but investment.

The NST would promote investing and saving over pure consumption, thus giving a boost to our economy because people will be looking to invest more and save for the future. This then reduces the burden on relying on Social Security.

I hope you did glance at the Atlantic Monthly article. That is real interseting. And if you want to search for the late January early February 2003 discussion on taxes and how investments rather then spending effects economic output go ahead. Its an interesting look.

As I said though after a ton of research and thought I am not as hot about the NST idea as I was 2 years ago.

[Cskin]

Cskin would vote for sure now

Funny JB

I've read all the posts here, from all the usual cast of characters, and the most evident thing is that everyone has an opinion and bases little of it on facts. Since we don't know the specifics of the Tax plan discussed in Post #1 of this thread.... it's really hard to declare "Celebration Day" or "Armegeddon" to it's realization.

I'm for any plan that FORCES all Americans to become vested in their country and wakes people up to the corruption in our govt. Any plan that taxes all Americans.... instead of the 50% currently taxed....works for me. You see... we have a 50% voter turn out because 50% of the people, mainly poor, don't have a vested interest in the govt. That disparity in those interested in elections and those who aren't is the reason our state and federal legislatures are emboldened to enact legislation that further intrudes into our lives and pushes deeper into our wallets and purses.

If some tax plan causes ALL Americans to wake up and take notice of the govt., even if it's painful, than I'm all for it.

[Ancalagon the Black]

Originally posted by SkinsHokie Fan

Destino, you are gonna have to find a thread from January of '03 and see what has the largest impact on economic performance. According to the charts I used it wasn't consumer spending but investment.

I would like to see those charts. It's generally accepted that consumption is by far the largest component of GDP.

Ten years ago, everyone was lauding Japan's incredibly high savings rate compared with America's. People were saying that we need to save and invest more, like the Japanese, and consume less, like the Japanese.

A decade later, America has showed remarkable growth while Japan has been mired in a 12-year-long recession that has shown signs of easing only in the last month or so.

[Ancalagon the Black]

Originally posted by Cskin

I'm for any plan that FORCES all Americans to become vested in their country and wakes people up to the corruption in our govt. Any plan that taxes all Americans.... instead of the 50% currently taxed....works for me. You see... we have a 50% voter turn out because 50% of the people, mainly poor, don't have a vested interest in the govt.

Cskin, you're arguing against yourself here. You're saying that 50% of the population benefits by not being taxed (which is untrue, but that's a separate issue), which means that they have "no vested interest" in the government. That then causes 50% of the people to stay at home (because of the "no vested interest"), so what you're saying is that the poor people stay at home. But then you claim that the current system "emboldens" our legislatures to be more (fiscally) intrusive. That's crazy talk. You're saying that because poor people don't vote, legislatures feel like they can take money from the rich and give it to the poor? And you imply that if poor people DID vote, then legislatures would stop giving them money?

I think you're a bit confused in your thinking, or you're not being completely honest with us.

If some tax plan causes ALL Americans to wake up and take notice of the govt., even if it's painful, than I'm all for it.

Even if it turns us into a Third World macroeconomy? You're willing to plunge most of the USA into poverty just to make us more interested in government?

[Thiebear]

He's going to be on Hannity and Combs in a few minutes...

waiting to here some of the details...

[Guest SkinsHokie Fan]

Hey ATB

I will try and find these charts again. The basic gyst of them was that recessions were caused by changes in investment not consumption.

It was in my textbook for my macroeconomic theory class I took the spring of 2003. I'll do my best to pull those up

[Ancalagon the Black]

Originally posted by SkinsHokie Fan

It was in my textbook for my macroeconomic theory class I took the spring of 2003. I'll do my best to pull those up

Cool. I took my macro classes in 1997 and 1998, so my textbooks are sure to be outdated.

[Mister Happy]

Consumption also effects investment. When a company reports lower earnings, their stock values tend to go down.

Widespread occurences of this tend to lead to less investment.

[Cskin]

ACB... I think I confused myself. I didn't mean to imply the poor don't vote. Maybe below might help.

I think the low voter turnout emboldens the politicians to create legislation that ultimately creates more regulation and more intrusion in our lives. Since half the country doesn't care, because they don't vote, it's easier for politicians to look the other way and ignore the outcry from the half that do care (vote).

I believe that 50% of the people in the USA pay NO TAX. 10% of the income earners in this country pay 90% of the taxes. I doubt the other 10% of taxes paid comes from the lower 50% of income earners.

I want all people to have to feel the pain of paying taxes, for no other reason than for them to think about that pain when they step in the voting booth.

The fact that I'm forced to pay my taxes, as well as someone elses, I think is unfair and unconstitutional.

[Zen-like Todd]

Well kids, it just so happens that I have super duper secret classified access to documents that reveal some of the administration's thinking on moving towards a consumption tax, including things such as its impact on charitable organizations. If you promise not to tell anyone, I'll give you the link.

Super Duper Secret Document

The part you are looking for is in chapter 5 (which starts at page 171).

[Tarhog]

Originally posted by skin-n-vegas

Hey folks!

This topic is good enough and controversial enough to give us all an awesome chance to debate the merits and/or ill effects of a plan such as this.

Lets not ruin it with die hard political trash talk.

I'd really like to learn more and feel I could be greatly benefited with the knowledge of others from this board. :2cents:

Originally posted by Park City Skins

In other words kids, how's about a little less name calling and "witty" comebacks, ( ) and some honest debate about the advantages and disadvantages of a national sales tax. And possibly other ideas.

Thanks guys.

[Ancalagon the Black]

Originally posted by Cskin

I think the low voter turnout emboldens the politicians to create legislation that ultimately creates more regulation and more intrusion in our lives. Since half the country doesn't care, because they don't vote, it's easier for politicians to look the other way and ignore the outcry from the half that do care (vote).

Vote them out!

I believe that 50% of the people in the USA pay NO TAX. 10% of the income earners in this country pay 90% of the taxes. I doubt the other 10% of taxes paid comes from the lower 50% of income earners.

Oh believe me, low-income-earners pay taxes. I have worked for consulting firms, and I have worked for charitable nonprofits. I've been in the highest tax bracket, and I've been in the lowest. And believe me--low incomes are taxed (Medicare, Social Security, unemployment insurance). Income tax is not the only tax.

I want all people to have to feel the pain of paying taxes, for no other reason than for them to think about that pain when they step in the voting booth.

Believe me, many people share your pain. But poor people will vote to lower their taxes, and you'll vote to lower yours. Unfortunately, there are more poor people than there are Cskins.

[luckydevil]

Oh believe me, low-income-earners pay taxes. I have worked for consulting firms, and I have worked for charitable nonprofits. I've been in the highest tax bracket, and I've been in the lowest. And believe me--low incomes are taxed (Medicare, Social Security, unemployment insurance). Income tax is not the only tax.