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Amendment Xvi; I want it repealed
Topic Started: Aug 21 2004, 11:55 AM (725 Views)
MDPD6320
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Frank - Gainesville, Florida
Brewster,

Any tax on income is onerous. It destroys incentive to work, and is unfair because and I say again, only individuals pay income tax. Businesses always pass on the tax burden as a cost of doing business. A person should not be taxed on what he produces because it will cause him to be less productive.
The Fair Tax proposal would place a sales tax on everything, while eliminating all income taxes, including the share paid by the employer over and above the salary of the employee. Therefore the cost of good and services would decrease.

The individual states (with the exception of four) already have sales taxes, and already have the machinery of collection in place. Only the amount and the recipient (the federal government) would be different. This is an easily administrated tax.

I don't know how Canada taxes, but it appears that you have both a federal income and federal sales tax?

Frank
" The government big enough to give you everything you want it is big enough to take everything you have."

"Extremism in the pursuit of liberty is no vice, and moderation in the pursuit of justice is no virtue"

All that is necessary for the triumph of evil is that good men do nothing.
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brewster
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Winemaker Extraordinaire
Yes, we are in the lovely position of having both a Federal Sales Tax (the GST) and a Federal Income Tax. All provinces (except Alberta, where I live) also have both Income and Sales Tax. Alberta does away with sales tax, but does make much use of user fees, which I consider much better since in theory the money goes directly to the need, rather than some politician's pork barrel.

No Tax is good, but Sales Taxes are the least fair if applied across the board. (Taxing Food is BAD!) (Taxing poor people is BAD!) It is also the most difficult to administer (VERY COSTLY!) if you start trying to discriminate (check earlier posts).

Remember, the real problem with Income Tax as it's administered in both our countries is not the tax itself, but the ridiculous mound of rules that have grown up around them, as every generation of politician adds one more level of "Social Conscience" to the mix. Pick a percentage and stick with it!

A Quote fom one US Group:

Quote:
 
Tax rates vary greatly from household to household. People who can afford tax lawyers compensate for high taxes by finding loopholes, creating a constant battle of regulation and revisions. A recent IRS Commission said that "the current income tax code is an unwieldy, inefficient, ungodly mess." Other government officials say the IRS's problems now jeopardize the funding of the
government.


But you don't fix a bad tax by adding another...

As you say, you cannot tax big business effectively, since it's just one more cost to the consumer (us). These days it's even worse, because if you drive the costs too high, the companies just move elsewhere. So business is essentially a non-issue.

But as I and others have said before, the worst possible scheme is the one both our countries use at present position, you get taxed coming and going...

What I want is the system that is the least costly to administer, while maintaining a semblance of fairness. The simpler the better.
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brewster
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Here's a website set up to help the British cope with their Value Added Tax (National Sales Tax to you) :o

VAT Problems and Solutions
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MDPD6320
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Frank - Gainesville, Florida
brewster,

I fear that we are worlds apart in our thinking, and since we are comparing apples and oranges (Canadian vs. US) taxes, we could go in circles all day. I don't agree with an income tax as it is unfair. Some pay some don't. Maybe in Canada everyone pays. Not so here. An across the board sales tax is fair, everyone pays. If you don't want to pay you buy less, or less often whatever floats your boat.

I just think it is most important to divest ourselves of a progressive income tax that limits our potential.

Frank
" The government big enough to give you everything you want it is big enough to take everything you have."

"Extremism in the pursuit of liberty is no vice, and moderation in the pursuit of justice is no virtue"

All that is necessary for the triumph of evil is that good men do nothing.
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Colo_Crawdad
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Lowell
MDPD6320
Aug 22 2004, 05:28 PM
Breswer,

I fear that we are worlds apart in our thinking, and since we are comparing apples and oranges (Canadian vs. US) taxes, we could go in circles all day. I don't agree with an income tax as it is unfair. Some pay some don't. Maybe in Canada everyone pays. Not so here. An across the board sales tax is fair, everyone pays. If you don't want to pay you buy less, or less often whatever floats your boat.

I just think it is most important to divest ourselves of a progressive income tax that limits our potential.

Frank

Frank,

I admittedly have not read all of the posts in this thread. I only hope I'm not being repetitive. Looking at the performance of the United States' economy since 1913 ( that when the 16th Amendment became part of our Constitution), and looking at the standard of lining in the United States after almost 100 years of using the income tax, I find your assertion that such a tax stifles incentive to work and limn its our potential to be laughable. History simply does not support that assertion.
"WE HAVE MET THE ENEMY AND HE IS US." --- Pogo
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DanHouck
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Land of Enchantment NM
Well, it came from here:

Origin of 16th Amendment

But repealing it wouldn't have much impact if we keep letting them borrow money.

Democrats = tax and spend
Bush Repulicrats = borrow and spend

BFD!*

(Big Fat Difference)

:(

Dan
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brewster
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Quote:
 
BFD!*

(Big Fat Difference)


Oh, THAT's what the "F" stands for! Funny, it comes out different in Canada.... :P
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DanHouck
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Land of Enchantment NM
Brewster, it comes out different here too but I don't want to get Chris on my butt again! :D

Dan
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cmoehle
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Chris - San Antonio TX
Now, Dan, you're a Moderator yourself.

But your right, it's not just the spending but the borrowing--largely from foreign investors. We're selling and selling out the United States.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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cmoehle
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Chris - San Antonio TX
Lowell "I find your assertion that such a tax stifles incentive to work and limn its our potential to be laughable. History simply does not support that assertion."

Things couldn't be better? If I was taxed on spending rather than earnings, I'd have a ton more money invested to make a ton more money.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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DanHouck
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Land of Enchantment NM
However, if everyone's investing and no one's consuming, what makes the economy go around? The problem with sales taxation is that it does drive consumption down, prime examples being Europe and Japan. If everyone is a net exporter because of high savings rates at home, the system breaks down because there are not sufficient consumers on the other end of the export equation.

The world economy is badly out of balance at the moment. We consume too much and don't export enough, the Chinese, Japanese and Koreans do just the opposite, though the Chinese seem to be getting very materialistic, as evidenced by their rapid growth in oil demand which is quickly coming into conflict with our own massive consumption of energy.

I think this is why they call economics the dismal science. :lol:

Dan
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corky52
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Dan,
You want to retrain the last several generations? Go over to RV.NET and read all the threads about upgrading for this or that reason, we have been trained to new, wonderful and MORE!!!!
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brewster
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I said I was going to make one more comment then shut up on this topic before, and I lied then, but I really mean it this time...

Sales Tax effects in countries with the closest similarities to the US:

Great Britain is struggling with a regulations mess that makes your Income Tax Laws look like a grade 1 reader. (See my earlier post.)

Canada has suffered through a loss of many small "mom & pop" businesses which cannot afford the full time accountant it takes to keep straight what does or doesn't get taxed. The only small businesses doing well are the ones that run a "guess and hope" system of applying the tax. This is good for capitalism?

As I understand it, Australia wants to apply the system universally to keep the regulations to a minimum, but has found that many businesses "shop overseas" to avoid it all. This is doing wonders for their balance of trade.

Quote:
 
If I was taxed on spending rather than earnings, I'd have a ton more money invested to make a ton more money.


Chris, in the real world, under a National Sales Tax, the only people with a ton more money to invest are the Tax Accountants and Lawyers. (For convenience in labelling, these two groups could be referred to as Politicians-in-Waiting)

And Dan is Correct. Sales Taxes act as a disincentive to consumption, which lowers the standard of living for everyone.

By the way, in NONE OF THESE COUNTRIES has instituting a National Sales Tax resulted in the elimination or even reduction of the Income Tax!

If the politicians in the USA ever come to realize the income potential for the government,

\ May God have mercy on your soul!
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Bow Valley Provincial Park, Kananaskis Country, Alberta
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cmoehle
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Chris - San Antonio TX
Dan and Brewster, I understand the arguments against sales tax.

I do not have a good argument on the problems associated with collection.

But the argument concerning disincentive to consumption can go both ways. The US consumes far more in imports that it produces for exports, and that has lead us to a state in which we borrow against foreign investment. A National Sales Tax would mitigate against that problem, a very real problem today when coupled with the enormous deficit.

And in principle at least I feel I would have far more control over my tax contribution and thereby what it's spent on if taxed on spending rather than income.

I'm not knowledgable as you evidently are, Brewster, to argue any more effectively than that. But I will study it further, starting with the links you have generously provided and either rethink my position or come better armed next time! :)
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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MDPD6320
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Frank - Gainesville, Florida
A few more things would like to clarify. The progressive income tax is onerous and regressive, and here are a few reasons why.

The IRS’s annual budget last year was 9 billion dollars. The cost of compliance, i.e. the cost of the public to comply with the tax code is estimated (by Harvard University & Cato Institute) to be between 200 to 300 billion dollars. Elimination of the progressive income tax would allow these funds to be spent or saved. In addition every employer in the country pays an additional 7.65% of the employees salary in FICA taxes. This too would go away.
Looking at a company’s annual report the following was noted:
The company made 613 million in total revenue of which 66 million was profit. They paid 25 million of that in income taxes. (which of course were ultimately paid for by the end user of their product)
When you consider, if these taxes were lifted, how productivity would be increased, how the US would be better positioned in foreign trade, and how many more jobs would be created, the potential is astounding.
Moreover, when you consider that almost half of Americans pay no income tax, (it’s withheld but refunded) and that 20% of the taxpayers account for 80% of the collected revenue, I don’t think it’s laughable, I think it’s onerous and regressive (for the few who pay).

I still have some thoughts yet not set down so if you will all be patient I’ll continue to try to make a case for the national sales tax. I fear these posts get too long and hence boring.

Frank
" The government big enough to give you everything you want it is big enough to take everything you have."

"Extremism in the pursuit of liberty is no vice, and moderation in the pursuit of justice is no virtue"

All that is necessary for the triumph of evil is that good men do nothing.
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