House to vote on Consumption Tax and abolish the IRS

[Blues Man]

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........

I am speaking more of the income tax not corporate taxes as they have always been 2 different things

 

[Tom Paine 1949]

There was some mention of VAT taxes. In Europe they evolved into replacing U.S.-style sales taxes (they also have some features of corporate taxes) and have several advantages. Also, VAT works best in countries with less politically powerful provincial / “state” governments — European states are generally more centralized than the USA.

Sales taxes make up a large part of most U.S. states’ revenue, though in Northeastern states income taxes represent a still larger part. (Significant regional variations exist, with Southwestern states relying the most on property and sales taxes as a source of state and local tax collections, while Mideastern and New England states rely most on income taxes.) The increasing importance (and needs) of local and city / suburban governments have led to them now taking the overwhelming part of real estate tax revenues (once going to fund states).

But we must not forget that Federal grants to states in 2023 amount to almost 40% of all states revenue!

At the moment (but not historically) most states are well funded and there may be many state tax refunds or tax cuts coming in 2023. State politicians will of course take credit for all this, but without Federal grants they would all be bankrupt. Our Federal government is unique. It can’t be forced into bankruptcy (except by political chaos) due to its “money printing” power and the continued strength of the dollar in world financial markets and trade.

Anybody seriously thinking about “changing” the whole tax system has to deal with the rather antiquated nature of our federal government system, and the even more antiquated anti-government ideas that conservative, “libertarian,” and “states rights” ideologies have gradually adopted or morphed into.

The political problems in tinkering with our jerry-rigged tax system of course are also rooted in extraordinarily complex competing class interests, as well as in our multitude of economic and corporate structures (which historically have allowed for thriving entrepreneurial small and medium businesses).

This is really a very complex matter that cannot be solved by simple-minded partisan sloganeering. As a sad example and proof of both major parties’ incapacity: even after universal criticism, and after both Trump and Biden promised to rid us of the deeply corrupting “carried interest loophole” … it still remains in effect.

 

[Zincwarrior]

Sales taxes are certainly regressive by nature, even if relatively easy to implement.

What is missed here is that sales taxes as almost universally conceived … EXCLUDE taxes on sales of stocks and other income producing financial assets.

The specific bill does just that.

 

[Ray From Cleveland]

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.

Back in the 70's social programs were not nearly as generous. Today poor people get a free cell phone. Section 8 people live in the suburbs. Food stamps never paid better, in fact most people I've seen using them are generally very obese. The government will give you $50.00 a month off your internet services if you make less than 200% of poverty level, and some even get it for free thanks to this administration.

People back then had no choice but to work to get ahead. Thanks to the ever more generous social programs, you can get ahead without working. Now we are having major problems with getting people back to work.

 

[Ray From Cleveland]

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.

I'm glad it does burden them the most. And why are you going by how much people make when it comes to taxation? It shouldn't matter if you make a million dollars a year or 20K. Everybody should pay the same rate. When you go to McDonald's, do they ask for proof of income to determine how much you pay for your Big Mac combo? Of course not. You and Donald Trump could be in the same line and you both get charged $7.50 or whatever it is in your area.

The problem as I see it is the poor could care less our reps are putting us in such a hole and fast tracking our country to bankruptcy. Maybe if they did have to pay until it hurts they'd quit supporting the party and representatives they currently are now. Or is that what you are afraid of?

Again I don't like the way this proposal is structured, but I am for a consumption tax to cover our deficit spending. If the consumption tax can't cover this wasteful spending, then increase the taxes, and yes, on the poor as well. That would solve our run away spending problems.

 

[busybee01]

I'm glad it does burden them the most. And why are you going by how much people make when it comes to taxation? It shouldn't matter if you make a million dollars a year or 20K. Everybody should pay the same rate. When you go to McDonald's, do they ask for proof of income to determine how much you pay for your Big Mac combo? Of course not. You and Donald Trump could be in the same line and you both get charged $7.50 or whatever it is in your area.

The problem as I see it is the poor could care less our reps are putting us in such a hole and fast tracking our country to bankruptcy. Maybe if they did have to pay until it hurts they'd quit supporting the party and representatives they currently are now. Or is that what you are afraid of?

Again I don't like the way this proposal is structured, but I am for a consumption tax to cover our deficit spending. If the consumption tax can't cover this wasteful spending, then increase the taxes, and yes, on the poor as well. That would solve our run away spending problems.

The reason that we are in such a hole is because we are not taxing high income people enough. There are too many loopholes in which millionaires can pay less in taxes than a lower income person. Trump's tax cuts gave big tax cuts to the rich. In addition, big businesses are using the federal government to subsidize their employees' wages through federal payments to lower income people.

We need more than one tax rate but it should be the same rate for all income regardless of whether it is wages or other types of income such as dividends and capital gains. We should take the wage cap off of payroll taxes.

This tax is more in the line of a 30% tax rate rather than 23%. It is already misleading. The rich would see big tax cuts and the poor would see big tax increases so I can see why you like it.

 

[Ray From Cleveland]

The reason that we are in such a hole is because we are not taxing high income people enough. There are too many loopholes in which millionaires can pay less in taxes than a lower income person. Trump's tax cuts gave big tax cuts to the rich. In addition, big businesses are using the federal government to subsidize their employees' wages through federal payments to lower income people.

We need more than one tax rate but it should be the same rate for all income regardless of whether it is wages or other types of income such as dividends and capital gains. We should take the wage cap off of payroll taxes.

This tax is more in the line of a 30% tax rate rather than 23%. It is already misleading. The rich would see big tax cuts and the poor would see big tax increases so I can see why you like it.

The top 20% of our working people pay close to 90% of all collected income taxes. If that's not enough, what is? And most of our lower 50% pay no income taxes at all. It's about time everybody had a dog in this race.

I must be rich because after Trump's tax cuts, I certainly got a cut. Not only did I get a cut, but he got rid of Commie Care fines as well, another several hundred a year I got to keep in my pocket.

Big business is not handing out federal money to low income workers, the Democrats are. It's part of the problem we have today with our labor shortage problems. As long as they stay under the federal threshold of what's considered poverty, they get to stay on the dole. It's the federal government, not corporations that are keeping people from making more money and advancing themselves in life.