House to vote on Consumption Tax and abolish the IRS

[Ray From Cleveland]

I like the idea but.....
How long would it take a Democrat congress to divert those taxes to pork spending special interests?

If they do, the tax increases and they would have to explain to their constituents why that is. The only way to avoid that is if they cut something else in it's place to keep the deficit from increasing.

 

[Admiral Rockwell Tory]

It's the same thing. You pay a tax on goods you buy.

With a consumption tax, the cost is calculated in the cost of the goods when you buy them. You do not pay an additional amount.

With a sales tax, it is added to your purchase price. A consumption tax is paid by the company producing the goods or services.

 

[Tom Paine 1949]

Education is NOT in the purview of the federal government.

Well, right here we have a failure of education — yours.

But you are not alone here. Historical ignorance about the early Founding Fathers’ completely Constitutional and completely justified support for public education is generally ignored or even denied by modern advocates of privatized education.

For example Thomas Jefferson pushed for and Congress passed the Land Ordinance of 1785 and the Northwest Ordinance of 1787 — which both set aside Federal lands to finance and build in every new town of new states in those vast territories public elementary, middle schools and universities. This Federal “Land Grant” system was completely in line with the “Enlightened” spirit that had launched the Revolution itself. (Jefferson’s “Northwest Ordinance” also outlawed slavery in these lands.) For much more, see:

https://files.eric.ed.gov/fulltext/ED518388.pdf

 

[Ray From Cleveland]

With a consumption tax, the cost is calculated in the cost of the goods when you buy them. You do not pay an additional amount.

With a sales tax, it is added to your purchase price. A consumption tax is paid by the company producing the goods or services.

No, it's the same thing. I know the tax you're talking about but I forget the term of it now. But a consumption tax is paid for as a sales tax.

What Is a Consumption Tax?​

A consumption tax is a tax on the purchase of a good or service. Consumption taxes can take the form of sales taxes, tariffs, excise, and other taxes on consumed goods and services.

Consumption Tax Explained: Definition, Types, Vs. Income Tax

A consumption tax is a tax on the purchase of a good or service; or a system taxing people on how much they consume rather than what they add to the economy (income tax).

www.investopedia.com

 

[Tom Paine 1949]

Abolish the IRS? You might as well try to abolish government itself! Hell, you might as well try to “abolish death” too. “Death and taxes,” as they say, are unavoidable — but the latter certainly can be more easily and more fairly collected.

Folks who talk about reactionary sales or consumption taxes replacing most other taxes are just repeating certain corporate and billionaire capitalists’ propaganda.

There are many ways to raise needed federal revenue that are never considered by either party. But that means taking lessons from Willie Sutton, who famously said — when asked why he robbed banks — “Because that’s where the money is!”

If you look at individuals’ “income” it becomes clear that income tax, even if it ever becomes (as it should) again very progressively taxed, cannot by itself fill modern needs. That is first of all because rich individuals don’t “earn” much and secondly because all money is not really owned by individuals anyway. How much did Trump — or do most other billionaires — declare as “income”?

No. We must go where the money is. Money worth taxing — in the tens of trillions — is tied up in various corporate and financial trusts protected by their legal complexity, often in foreign tax shelters. Other big money “legally” escapes taxation due to loopholes, special tax write-offs and an utterly outclassed IRS enforcement system. These tens of trillions of financial assets are nevertheless used, enjoyed and employed to make more money by the uber-rich and very powerful money men — without hardly any of it ever having to be declared as “personal income.”

Corporate taxes are still very important, but we also need financial taxes on transactions, including transactions by Hedge Funds and new giant almost invisible and unregulated “private capital” funds of every type. A powerful IRS needs to be empowered to go after the Wall Street “Masters of the Universe.” Backed up by powerful regulators, especially in the Securities Exchange Commission (SEC), it is possible to crack down on the growing economic oligarchy and the corruption it breeds throughout society.

Of course this requires tremendous political will, hard clear thinking, and a determination not to be sidetracked by personality politics, political ultra-partisan fanaticism, or idiotic culture wars. We need our finest minds going into industrial management and developing new technology, not into making money in the “Wall Street Casino.” The latter types should fear the IRS and SEC.

“Drain the swamp!” was just a slogan. A good one, but one put forward — with no rational economic content — by a snake-oil salesman rising out of a particularly malodorous “black lagoon.” In a very real way, most ALL of us are forced to live in that jungle swamp today. We can barely keep our heads — or our minds — above the dark waters. This is true for all races, for urban and rural dwellers, even to a certain extent for all classes of rich and poor.

Yet we remain one nation, still wealthy and powerful. We have many blessings and resources and talented people. We are just madly divided, letting ourselves get more divided by demagogues amongst us.

 

[WEATHER53]

Let me ask please
When VAT taxes or consumption has been proposed before it was rebuked because it adversely effect poor.
So I make a 15k purchase @10% and it’s $1,500 and a person with much less income purchases same thing then it “hurts” him more?
I dunno-maybe buy something less? Even if true that’s not a reason to never do the tax.

 

[Ray From Cleveland]

Let me ask please
When VAT taxes or consumption has been proposed before it was rebuked because it adversely effect poor.
So I make a 15k purchase @10% and it’s $1,500 and a person with much less income purchases same thing then it “hurts” him more?
I dunno-maybe buy something less? Even if true that’s not a reason to never do the tax.

That's the name of the tax I was thinking of, the VAT tax. However I was wrong. I thought the VAT tax was paid for in the manufacturing when in reality, the product is taxed every step of the way to the consumer.

 

[Harpy Eagle]

Donald Trump. Any more questions?

Please link to which year Donald Trump submitted a budget request smaller than the one from the previous year.

Please link to which year under Trump that spending was less than it was the year before.

I will be happy to wait while you look.

 

[Aldo Raine]

Consumption taxes are generally a set percentage and, thus, regressive. A progressive consumption tax might be fair, regressive ones are not.

Thank you.

 

[Blues Man]

Consumption taxes are generally a set percentage and, thus, regressive. A progressive consumption tax might be fair, regressive ones are not.

I disagree with that whole regressive classification.

The only equitable tax is based on a percentage of income or the price of goods where everyone is treated exactly the same.

People who have more money buy more stuff and will pay more

 

[Blues Man]

Sales taxes are regressive taxes and a higher burden goes on the poorest and the richest have the lowest tax burden.

Look at Florida with no state income tax, but a sales tax instead....

The poorest and lowest 20% income earners pays 13% of their total income in state sales taxes,

And the highest 1% of earners in the state pay only 2% of their income in state sales taxes....

In Texas with no state income tax the poorest 20% income earners pay 12.2% of their income in state sales taxes vs the top 1% wealthiest pay about 3% of their earned income in sales taxes each year.


Sales taxes ARE REGRESSIVE....with the greatest burden on the poorest.

Flat percentage taxes are the only equitable taxes.

Which is why I think the income tax should be a flat tax.

No deductions no exceptions everyone pays the exact same percentage of their income

 

[JWBooth]

And let the show begin!.... marching bands... circus clowns... come one come all and watch the show!!

This has about as much chance as getting anywhere as a vote to cut their own salaries.
It might get 100 votes overall.

House Republicans to vote on bill abolishing IRS, eliminating income tax

Rep. Buddy Carter, R-Ga., is reintroducing a bill with several colleagues that aims to repeal the national income tax, implement a national consumption tax and abolish the IRS.

www.foxnews.com

Tongue in cheek - why tax at all when they can contract with the Federal Reserve to print up all the money they need?
Consumption tax is much preferred to income tax with a big caveat. People have been conditioned to spend because inflation and zero return on saving. Until these are reigned in a consumption tax would be devastating to lower and middle classes.

 

[iamwhatiseem]

Tongue in cheek - why tax at all when they can contract with the Federal Reserve to print up all the money they need?
Consumption tax is much preferred to income tax with a big caveat. People have been conditioned to spend because inflation and zero return on saving. Until these are reigned in a consumption tax would be devastating to lower and middle classes.

Depends on the percentages, and what provisions they make.
Example... lets say Section 8 housing. You make all rent payments for Sec8 housing tax free.
Food is already tax free. Healthcare and Prescriptions could be made tax free.
Just examples

 

[Ray From Cleveland]

Flat percentage taxes are the only equitable taxes.

Which is why I think the income tax should be a flat tax.

No deductions no exceptions everyone pays the exact same percentage of their income

I don't know that it would work out real well. Tax breaks for companies are to encourage them to invest and expand: Add additions to their current facilities, build other facilities, purchase new or replacement equipment........

 

[Care4all]

Flat percentage taxes are the only equitable taxes.

Which is why I think the income tax should be a flat tax.

No deductions no exceptions everyone pays the exact same percentage of their income

I agree that it is the fairest way to tax....

Because a consumption tax federally would end up just very regressive as it has in states with only a sales tax like Florida and Texas.

But I also remember what it was like when I was young and poor as shit, and remember when every penny counted and even 5% of my total income taken from me, could put me over the cliff! Yes I climbed my way out of it, but that does not negate the dire conditions I was in....or others are in.

When income tax was first instituted 100 years + ago...there was a personal exemption....that rich and poor and middle all got, which helps the burden not be greater, on the poorer and middle, compared to the wealthy.

Basically, taxes are paid on profits with businesses, and individuals alike....not on our full earned income, but only our profit from our income just like corporations and small businesses have to pay taxes on....

A personal exemption for a calculated minimum that it takes to on average survive annually, is everyone's flat personal exemption from their income, then everyone is taxed a flat rate on all... over that amount.

this is the only way not to strangle those with less in a simplified way, imho.

It would still be getting rid of tax accountants and tax lawyers and loopholes and deductions and all tax code, and likely only need 10% of the IRS staff.

 

[JohnDB]

Abolish the IRS? You might as well try to abolish government itself! Hell, you might as well try to “abolish death” too. “Death and taxes,” as they say, are unavoidable — but the latter certainly can be more easily and more fairly collected.

Folks who talk about reactionary sales or consumption taxes replacing most other taxes are just repeating certain corporate and billionaire capitalists’ propaganda.

There are many ways to raise needed federal revenue that are never considered by either party. But that means taking lessons from Willie Sutton, who famously said — when asked why he robbed banks — “Because that’s where the money is!”

If you look at individuals’ “income” it becomes clear that income tax, even if it ever becomes (as it should) again very progressively taxed, cannot by itself fill modern needs. That is first of all because rich individuals don’t “earn” much and secondly because all money is not really owned by individuals anyway. How much did Trump — or do most other billionaires — declare as “income”?

No. We must go where the money is. Money worth taxing — in the tens of trillions — is tied up in various corporate and financial trusts protected by their legal complexity, often in foreign tax shelters. Other big money “legally” escapes taxation due to loopholes, special tax write-offs and an utterly outclassed IRS enforcement system. These tens of trillions of financial assets are nevertheless used, enjoyed and employed to make more money by the uber-rich and very powerful money men — without hardly any of it ever having to be declared as “personal income.”

Corporate taxes are still very important, but we also need financial taxes on transactions, including transactions by Hedge Funds and new giant almost invisible and unregulated “private capital” funds of every type. A powerful IRS needs to be empowered to go after the Wall Street “Masters of the Universe.” Backed up by powerful regulators, especially in the Securities Exchange Commission (SEC), it is possible to crack down on the growing economic oligarchy and the corruption it breeds throughout society.

Of course this requires tremendous political will, hard clear thinking, and a determination not to be sidetracked by personality politics, political ultra-partisan fanaticism, or idiotic culture wars. We need our finest minds going into industrial management and developing new technology, not into making money in the “Wall Street Casino.” The latter types should fear the IRS and SEC.

“Drain the swamp!” was just a slogan. A good one, but one put forward — with no rational economic content — by a snake-oil salesman rising out of a particularly malodorous “black lagoon.” In a very real way, most ALL of us are forced to live in that jungle swamp today. We can barely keep our heads — or our minds — above the dark waters. This is true for all races, for urban and rural dwellers, even to a certain extent for all classes of rich and poor.

Yet we remain one nation, still wealthy and powerful. We have many blessings and resources and talented people. We are just madly divided, letting ourselves get more divided by demagogues amongst us.

Actually you are getting duped by this tax concept.

The truly rich corporations and individuals evade taxes before breakfast. They will have no nationality or allegiance to any nation that taxes them what they consider to be unfair....and will finance elections against anyone who doesn't agree.

What is truly needed is an asset tax. And this will be a game changer. Currently investments and profits from investments are protected by reinvesting....and the richest people borrow money by using their investments as collateral. It's how billionaires have a $200k salary but live in a $22 million mansion and $30 million yacht and several houses around the world. They borrowed money against their billions invested.

However an asset tax....meaning you pay a percentage of the value of your assets over $15 million and there will be a huge outcry. But it will get those who are total slackers in paying taxes. Of course somebody somewhere is going to try and get a loophole inserted into any such tax....the whole world will. But in the current global inflation environment this is the perfect opportunity to do this. Sure the USA has some inflation but other nations all have double and triple digit inflation happening.

Which is why other nation's elite rich have massive investments in American stocks.
But an asset tax (like homeowners property tax) is a good way to tax those assets.

 

[iamwhatiseem]

I agree that it is the fairest way to tax....

Because a consumption tax federally would end up just very regressive as it has in states with only a sales tax like Florida and Texas.

But I also remember what it was like when I was young and poor as shit, and remember when every penny counted and even 5% of my total income taken from me, could put me over the cliff! Yes I climbed my way out of it, but that does not negate the dire conditions I was in....or others are in.

When income tax was first instituted 100 years + ago...there was a personal exemption....that rich and poor and middle all got, which helps the burden not be greater, on the poorer and middle, compared to the wealthy.

Basically, taxes are paid on profits with businesses, and individuals alike....not on our full earned income, but only our profit from our income just like corporations and small businesses have to pay taxes on....

A personal exemption for a calculated minimum that it takes to on average survive annually, is everyone's flat personal exemption from their income, then everyone is taxed a flat rate on all... over that amount.

this is the only way not to strangle those with less in a simplified way, imho.

It would still be getting rid of tax accountants and tax lawyers and loopholes and deductions and all tax code, and likely only need 10% of the IRS staff.

Consumption tax labeled regressive, though popular, is not necessarily true at ll.
That is only true if everyone, no matter their income, spends the same amount of money.
Obviously they do not.
Consumption tax would be a HUGE win for middle class people who don't spend every dime they make. It would be a HUGE loss to poorer people, because they currently pay ZERO in income tax. And it would be a HUGE loss for the wealthy because no tax breaks.
The problem we have today is two fold:
1) Wealthy people have too many ways to pay less. They have been well served by the government looking out for them - both sides of the aisle.
2) Too many people, FAR too many people pay ZERO income tax.
This leaves overwhelming unfairness to the middle class who take it up the ass from both ends.
That needs to change.

 

[Tom Paine 1949]

Actually you are getting duped by this tax concept.

The truly rich corporations and individuals evade taxes before breakfast. They will have no nationality or allegiance to any nation that taxes them what they consider to be unfair....and will finance elections against anyone who doesn't agree.

What is truly needed is an asset tax. And this will be a game changer. Currently investments and profits from investments are protected by reinvesting....and the richest people borrow money by using their investments as collateral. It's how billionaires have a $200k salary but live in a $22 million mansion and $30 million yacht and several houses around the world. They borrowed money against their billions invested.

However an asset tax....meaning you pay a percentage of the value of your assets over $15 million and there will be a huge outcry. But it will get those who are total slackers in paying taxes. Of course somebody somewhere is going to try and get a loophole inserted into any such tax....the whole world will. But in the current global inflation environment this is the perfect opportunity to do this. Sure the USA has some inflation but other nations all have double and triple digit inflation happening.

Which is why other nation's elite rich have massive investments in American stocks.
But an asset tax (like homeowners property tax) is a good way to tax those assets.

Actually I don’t think we disagree on your “asset” tax. Usually called a “wealth tax” it is totally worth considering, though it is not always easy to determine “wealth” objectively.

Financial asset values are by definition clear when purchased or sold, and of course are owned primarily by the wealthy, so a tax on trading them is by definition going to be easy to impose and progressive. But given the decades of the mega-wealthy avoiding taxes and increasing their assets, a carefully directed asset tax or wealth tax is definitely worth considering as well, if only as a limited measure applied to billionaires. Your point about international taxation is important as well, but is a whole other issue.

 

[Care4all]

Consumption tax labeled regressive, though popular, is not necessarily true at ll.
That is only true if everyone, no matter their income, spends the same amount of money.
Obviously they do not.
Consumption tax would be a HUGE win for middle class people who don't spend every dime they make. It would be a HUGE loss to poorer people, because they currently pay ZERO in income tax. And it would be a HUGE loss for the wealthy because no tax breaks.
The problem we have today is two fold:
1) Wealthy people have too many ways to pay less. They have been well served by the government looking out for them - both sides of the aisle.
2) Too many people, FAR too many people pay ZERO income tax.
This leaves overwhelming unfairness to the middle class who take it up the ass from both ends.
That needs to change.

The wealthiest paid 2% to 3% of their income with sales/consumption tax in Florida and Texas, while the bottom 20% quintile paid between 11.5 and 13% of their income sales taxes....

That is a real live example of how a federal consumption tax would affect real people at the opposite end.

A consumption tax is regressive, and burdens the poorest the most, unless some other measures are taken.

 

[iamwhatiseem]

The wealthiest paid 2% to 3% of their income with sales/consumption tax in Florida and Texas, while the bottom 20% quintile paid between 11.5 and 13% of their income with sales taxes....

That is a real live example of how a federal consumption tax would affect real people at the opposite end.

A consumption tax is regressive, and burdens the poorest the most, unless some other measures are taken.

And there would be measures.
I pretty much would guarantee, for instance, there would be a waver on low income rent.
Other possibilities would be "no tax" outlets. Companies who offer only heavily discounted clothing/etc.
One of the things you have to consider also in poor spending is they do a HORRIBLE job at spending. The VAST majority of smokers are low income. And cigarettes are brutally expensive.
In Indiana with tax levies on tobacco the cheapest cigarettes cost per pack is $3.28. A pack a day smoker burns through just below $1200/year smoking. Poor people also drink alot. They also buy lottery tickets. etc.
So it isn't just consumption tax being regressive... it is the absolute TERRIBLE decisions poor people make with their money just like everything else in their lives.

Example... you mentioned your own poverty, and when I was in my 20s I was too. But we were both smart enough to get ourselves out of it. FAAAR too many people in poverty stay there because they simply refuse to improve their lives and just keep doing the same dumb things that got them there in the first place. I don't feel sorry for them, and don't believe any taxation decisions should be made with them in mind.