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2) The first $18,588 (poverty level) of spending is tax free for everybody.
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How in the world do you plan on tracking this?
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3) The following taxes are abolished: Income taxes, Capital Gains Taxes, Estate Taxes, Gift Taxes and some excise taxes.
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Strangely, all of my large-budget shopping will consist of me giving a Gift to someone, who happens to give a Gift back that is roughly equivilent in value.
Oh look, I just avoided taxes! *gasp*
Secondly, Estate Taxes are an attempt to make the people with large amounts of financial power in the USA be those who earned it in their lifetime, as opposed to people who inherited it. Unlimited inherited power is a cancer on society.
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First, the 30% or higher number is bogus, in my opinion. I haven't found one shred of evidence to support this. The only time numbers this high come up is when a wacky plan is introduced (which means that the proposal won't even be considered) or in opposition to this plan (note: I already mentioned Pelosi and McIntyre which have published articles stating the exact points mentioned above). There are about 3-4 proposals being looked at seriously right now. Of those proposals, which ones have rates exceeding 30%?
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I propose replacing the current income tax with a flat 1% income tax! Look, the number is small, only 1%!
=p~
Making up a bogus low number does not make your proposal more viable.
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Federal government spending consumes $5500 per person and 29% of the economy.
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Thus, in order to pay for the current Federal government, you need to tax 29% of the current economy.
Demonstrating what the massive tax upheval would do would be tricky, and not something you have gotten anywhere close to.
Right now, the Federal Government takes in roughly as much as it spends. It takes this money in in taxes.
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I am telling you that your argument is false. I have posted the numbers to back up my claim.
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Numbers which, as far as I can tell, have no basis in reality.
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And, no, the poor and the middle class won't be hurt more on this plan.
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I do not believe you. There is every reason to believe that if you increase the portion of taxes that the poor and middle class pay, they will be hurt more by the plan. Consumption of goods/services tends to be higher, as a portion of their income, in the poor and middle class.
You might want the poor and middle class to carry more of the tax burden. That is fine. But claiming that making the tax burden regressive won't hurt them at all seems dishonest.
Secondly, income disparity itself causes harm to a society. It doesn't take a genius to notice the correlation between income disparity and crime.
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Originally Posted by Ustwo
Without a progressive tax system and inciting class envy how could the modern democratic party survive as anything but a marginalized party?
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Honestly? I'd suspect the democratic party would find another niche. And there would be bloody revolution in the streets.
The US has been close to bloody revolution in the past. Machine guns where used by the government on people who protested the distribution of wealth.
There is a name for a society in which the power and wealth are monopolized by a handful of families. It is called feudalism.
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Originally Posted by KMA
O.K. What did the government bring in? $1.95 trillion (this number includes all forms of taxes received by the government), gross, not net. In other words, we spent WAY more then we received from taxes. Especially since the $1.95 trillion number is gross--I haven't found a good source for net revenues yet, without doing a ton more research than I already have.
Granted, the first few year of this system, we would continue to run deficit spending. Given enough time, the benefits of the system would be seen and we would no longer take in less than we spend (as long as spending is capped--we have to control spending first, no tax system can maintain the kind of spending sprees we have seen over the last several decades).
Also, with the influx of money and jobs into our economy, the "poor" people that want to do better, can. Maybe some of these people will no longer be counted in the "poor" column.
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So, from what I can tell, your plan is:
1> Implement your system
2> Expect
HUGE AND MASSIVE MIRACLE ECONOMIC GROWTH!!!!!!
3> Pay for your system
Just so we can be clear? In other words, without step 2, your system does not work?
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The unique thing is that people that are receiving money un-taxed (i.e. thieves, drug dealers, contractors that work "under the table") would be fairly taxed under a consumption system.
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I do not understand. Do you expect a drug dealer to pay taxes on the drug sales he makes? A theif to pay taxes on the goods he steals?
There are two transactions.
1> The worker in the illegal industry earns money (illegally)
2> The worker in the illegal industry spends money (legally)
The transaction <1> is not taxed often, because the illegal worker does not declair his income. (note that some criminals pay their income taxes, in order to avoid tax evasion charges)
The transaction <2> is often taxed, because the reciever pays income tax and sales tax on the goods.
I do not see how your system changes any of this.
I'm assuming your consumption tax is rebateable if you later resell the good?