NATIONAL SALES TAX

12-11-2004, 03:05 PM

We all really need to stop and think about the what is going to happen to your budget when the new National Sales Tax kicks in.

Ok-bash me for bringing the truth to this board. I know the truth hurts but please keep your bashing in the correct language for a forum where children can access.

Crunch the numbers do the research and stop being a sheep.:dude: Because you are in for a big surprise if you think this is going to help the normal folks.

Hey this plan is going to greatly lower my taxes. Not on the back of the lower and middle income classes. As I have been saying two classes - poor and rich.

Bash me, lash me but you and your wife will have to work two jobs and your children will need to start working at 12 years old to keep the same quality of life you enjoy now. Enjoy it while it lasts.
--------------------------------------------------------------------------------------------------------
Today, US Rep. David Price (D-NC) testified before the House Budget Committee in opposition to proposed national sales tax legislation, H.R. 25. While calling for simplification of the current complex tax system, Rep. Price argued it would be a serious mistake to adopt a national sales tax or a flat tax because of the sharply regressive qualities of each.

â€œAt the heart of the proposals before us today is whether or not the United States will have a progressive or regressive tax system,â€ Mr. Price said. â€œI was brought up believing that from those to whom much is given, much is expected. A progressive tax is sound economic policy, and it is indicative of an advanced and enlightened society where those who have reaped the benefits of living in a free, stable, and prosperous land understand their obligation to contribute to the common good.â€

H.R. 25 would repeal the individual income tax, the corporate income tax, all payroll taxes, the self-employment tax, and the estate and gift taxes and replace them with a national retail sales tax beginning in calendar year 2005.

Although the bill proposes a national sales tax level of 30 percent, the Joint Tax Committee, the Brookings Institution, Citizens for Tax Justice, and the Institute on Taxation and Economic Policy have all stated that in order to keep federal tax revenues constant, a 50-60 percent national sales tax would be required. Because low and moderate-income Americans devote a higher percentage of their income to consumption than do wealthier Americans, they would be forced to pay significantly more in taxes than under the current system.

â€œOnly Americans in the top 20 percent of income would benefit from converting from an income tax to a national sales tax,â€ Mr. Price added. â€œEveryone else would see their tax burden increase by an average of 50 percent.â€

Price used the impact of a national sales tax on North Carolinians as an example of the regressive nature of the tax. (folks these numbers will transfer over nation wide).

Â· In North Carolina, a working family in the bottom 20% income bracket makes on average $9,100 a year. A national sales tax would increase their federal tax burden by $4,214, partly because it would cancel the Earned Income Tax Credit and the child tax credit.

Â· For a family making an average of $19,700 a year, the national sales tax would increase their tax burden by $4,013. (that is a massive percentage increase!!!!)

Â· For the next 20% of families, their average tax burden would increase by $3,811.

Â· For those in the next 60%, their taxes would increase by $2,935.

Â· Even families making up to $124,000 would see their taxes increase by $600 a year.
But families making between $124,000 and $333,000 would see their tax burden decrease by an average of $4,722 under a national sales tax, and those making over $333,000 would see their tax burden decrease by an average of $151,268. (yes drop in half on the backs of the rest of you).

Because a national sales tax would apply toall new purchases, it would raise the cost of a new $110,000 house in North Carolina to $165,000, raise the cost of a $20,000 new car to $30,000, raise a $100 grocery bill to $150, a $200 bill for medication to $300, and a gallon of gas from $2.00 to $3.00.

Seniors would be especially hard-hit because most are paying very little tax now because they have no income, but instead are spending down their savings and therefore would do much worse under the national sales tax than our current system.

Although the limited time remaining in the current Congress makes it unlikely that H.R. 25 or similar proposals will be considered this year, they are likely to receive significant attention in the next Congress.

[/b]Keep in mind this means...your income will not be lowered with TSP contributions, mortgage interest or having children - no more write offs because NO MORE income tax.

12-11-2004, 03:39 PM

Mlkand Wheels this look like a good plan to you?

Before you bash me you really should do a little research first. Yes, get the remote off your stomach because after working your second job to keep up your current quality of life you will not have time later for research.

If this goes through who is going to have money to put in the stock market? Yes the super rich but they do not play stocks they horde and purchase real estate.

Bottom line: If you see look like it is going to go through GET out of the stock market. 2005 will be horrible and 2006 will be worse.

I forsee the smiles with the social security reform and the reality of this "system" kicking in.

OK please bash me some more for bringing real substance to this board. You bring your well thought out put down one liners, hateful remarks and white noise.

Personally I do not want the 50% tax cut because this is going to be bad for 95% of Americans. But if it is taking 50%from you two - push that baby through because I want hear your comments when you investmentsare down 75% and your tax level has gone up 50%.

Remember Mlk "you said you were all for it :^." After I did the research and crunched the numbers - "so am I :^."

Four more years!

**Rod** · 12-11-2004, 05:11 PM

Here are some FAQs for "FairTax":

http://www.fairtaxvolunteer.org/smart/faq-main.html

Source:

http://www.salestax.org/

Hey Bill, any comments on that monthly rebate check we would receive?

"And under the FairTax all families will receive a monthly tax rebate check."

God Bless:^

**Rod** · 12-11-2004, 05:21 PM

What is the FairTax?
The FairTax is a non-partisan proposal (HR 25/S 1493) that abolishes all federal income taxes, including personal, estate, gift, capital gains, alternative minimum, corporate, Social Security, other payroll, and self-employment taxes, and replaces them all with one simple, visible, federal retail sales tax. The FairTax dramatically changes the basis for taxation by eliminating the root of the problem: Taxing income. The FairTax taxes us only on what we choose to spend, not on what we earn. It does not raise any more or less revenue; it is designed to be revenue neutral. The FairTax is a fair, efficient, and intelligent solution to the frustration and inequity of our current tax system.

What is FairTax.org?
FairTax.org is a non-profit, non-partisan, grassroots organization dedicated to replacing the current tax system. The organization has hundreds of thousands of members and volunteers nationwide. Its plan supports sound economic research, education of citizens and community leaders, and grassroots mobilization efforts. For more information visit the web page, http://www.fairtax.org, or call 1-800-FAIRTAX.

FAQ 29:

What happens to the stock market, mutual funds, and retirement funds? Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans.

FAQ 36:

What about the flat tax? Would it be better and easier to pass? The flat tax and the FairTax share some important similarities. They are both flat-rate taxes that are neutral with respect to savings and investment. The flat tax, however, retains the invasive income tax administration apparatus and can easily revert to a graduated, convoluted mess, as it has many times over many years.

Very few people really understand the flat tax. Its authors will tell you it is a consumption tax that uses the income tax system for implementation. Only an academic or government bureaucrat would dream up a consumption tax that needs the invasive income tax apparatus for its application, when one can simply have a retail sales tax and reduce the bureaucracy by 90 percent or more! In addition, a large part of the burden of the flat tax â€“ the business tax â€“ will remain hidden from people in the retail price of goods and services.

In contrast, the FairTax is simple, easy to understand, and visible. It cannot be converted into an income tax.

Under a flat tax, individuals would still file an income tax return each year similar to todayâ€™s 1040 EZ. While this is a simple postcard, the record keeping required to fill in the blanks is still long and burdensome. Under the FairTax, individuals would never file a tax return again, ever! Under the flat tax, the payroll tax would be retained and income tax withholding would still be with us. Under the FairTax, the payroll tax, which is a larger and more regressive tax burden for most Americans than is the income tax, would be repealed. Under the FairTax, what you earn is what you keep. No more with-holding taxes; no more income tax.

Notwithstanding flat tax proponentsâ€™ honorable intentions, income tax reform has been less than a success in the past. Congress has tried to reform the income tax again and again, with the result being greater complexity and, generally, higher rates. The problem is the income tax, and it is time to stop tinkering with it.

Flat tax supporters have made major political attempts to pass their reform, including the efforts of former Majority Leader Dick Armey and presidential candidate Steve Forbes, and yet, their efforts have not progressed politically for several years. With every debate, the flat tax loses grassroots and congressional support to the FairTax. It is time to junk the entire income tax system and start over with a tax system that is more appropriate for a free society and better able to meet the needs of the information age.

**Rod** · 12-11-2004, 05:27 PM

So, what would be best???

Flat Tax

or

FairTax

**Show-me** · 12-11-2004, 06:01 PM

I believe that everyone regardless of income level should be taxed at the same rate. I am against goverment give aways and aid to other countries until we improve our governments accounting practices. Get rid of the IRS they can not keep up with corp. america. They are overwhelmed. Tax code is to confusingfor the average Joe and there are too many little white lies and loop holes that are used when filing income taxes. Average Joe is starting to realize that the IRS is overwhelmed.

One concern about a "fair tax" or "flat tax" is when companies move money off shore to aviod taxes. Anyone moving money offshore should be penalized severely also anyone buyingbig ticketitems oversees and then bringing them in country.

Sorry if my grammer and spelling are not at Phd levels. Just my opinion.

**rokid** · 12-11-2004, 06:53 PM

Assuming the amount of taxes remains constant: who pays the taxes under the current scheme and who pays the taxes under the new scheme?

Since the rich pay most of the taxes now, merely because they control most of the resources, I'm assuming any changes, i.e. fair, flat, sales, or reform, aredesigned to reduce the "burden" on the rich and shift it to everyone else. After all, the rich also control the politicians.

Alternatively, we can give everyone a tax cut and pass the bill on tofuture generations. Thisseems to be our current,niftyapproach.

I wonder if I can get my son or my grand kids to pay off my credit card debt after I'm gone? I'd sure like a big, plasmaHDTV, a hot tub,a wine cellar, some overseas vacations, and a new sports car,while I'm still young enough to enjoy them!:^

**Show-me** · 12-11-2004, 08:15 PM

rokid wrote:

Assuming the amount of taxes remains constant: who pays the taxes under the current scheme and who pays the taxes under the new scheme?

Since the rich pay most of the taxes now, merely because they control most of the resources, I'm assuming any changes, i.e. fair, flat, sales, or reform, aredesigned to reduce the "burden" on the rich and shift it to everyone else. After all, the rich also control the politicians.

Alternatively, we can give everyone a tax cut and pass the bill on tofuture generations. Thisseems to be our current,niftyapproach.

I wonder if I can get my son or my grand kids to pay off my credit card debt after I'm gone? I'd sure like a big, plasmaHDTV, a hot tub,a wine cellar, some overseas vacations, and a new sports car,while I'm still young enough to enjoy them!:^

Some think thats the way to go. Your creditors divide up your assets and the rest is passed on to future consumers. I've read a joke about this: Before you die spend all your money and be max'ed out in dept. The goverment will put you in a nice nursing home and provide you with meals and medical care. Great joke uh.

Sad thing is there is someone in my community that did exactly that. He retired, spent all of his money, ran up a s**t load of bills, got sick, defalted on paying his med. bills and other bills,lost what little assets he had left, filled bankruptsy, got social security disability for being a worthless drunk, and is liv'n large in housing center at.....................tax payer expense. This guy go's around the community bragging how he max'ed out the system. Hasn't broken any laws but I'd like to see a small meteor land on his head.

The other aspect is alot of under the table money will get taxed ie. drugs, whores, migrant workers. I use to work under the table all the time a few years ago. Would have had to pay my fair share of taxes when I went to spend it.

Wealth people like to spend there money ona betterlife style. We spend what we make. The more money I make the more I like to spend. Does a person who makes a $500k income need to live in a$1.9 millionhouse? Couldn't they live as comfortably in a $100k to $500k home. The more we make the more we want to spend so that we can assert ourselves to our peers. Large houses require large amount of dwindling resources to build, heat, cool, maintain. How much to hire someone to mow the 10 acre lawn? How much to maintain the 3 suv's? I'm typing this on a soap box.

Our consumer drive economy may bite us in the ass sooner than we think. China's getting a taste ofour type of economyand they are lik'n it. Saw a report where they are getting fatter like us. Causing health problems like us.

Spend, spend, spend, spend. Maybe we need a system that makes us realize that we need to stop spending and start saving. The more you save the less taxes you pay.

I don't know what is the right system. I do know there are a lot of holes in our current system and if we can keep it simple there less ways to find holes. Social Security isn't secure. Tax code is coded so that you need a lawyer to figure it out. I mean my God there is an entire industry in tax preperation, not to mention lobbist, lawyers, accountants, ect.

I'm in the simple minded club. K.I.S.S. Keep It Simple, Stupid

Wow am I ranting or what.

**Rod** · 12-11-2004, 10:38 PM

Show-me wrote:

Spend, spend, spend, spend. Maybe we need a system that makes us realize that we need to stop spending and start saving.

Don't need a system. Just a brain with some common cents.

BTW, I'm proud to announce that my Wife & I do not havea spendingproblem. We are notmaterialistic, and are not the type who feel pressured into keeping up with the latest trends. We are very simple. As a matter of fact, my laptop is5 years old (575 MHZ). The CDROM doesn't work half the time and the display likes to flicker a lot- loose connection.Yeah, I could use a new one,but I'm going to milk thisbaby dry before I make another purchase. We are enjoying:

- ZERO credit card debt

- ZERO car notes (2)

-9 months of living expenses in a Money Market

- Fully funding 2 ROTHS & 2 TSPs

- Buying shares of stock monthly

I'm not bragging... justemphasizing we are not in that class of consumers who like to "spend spend spend" $$$ they do not have, cannot afford to spend, or simply spend because it's there. We choose to be debt free NOW, so we can invest NOW, and enjoy a worry-free retirement.

God Bless:^

**Mike** · 12-11-2004, 11:10 PM

The national sales tax would have tobe>50% in order for my taxes to exceed what I pay now.

**Show-me** · 12-12-2004, 08:21 AM

What is taxed? The FairTax is a single-rate, federal sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed.
Exactly what taxes are abolished? The FairTax is replacement, not reform. It replaces federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.
How does the rebate work? All valid Social Security cardholders who are U.S. residents receive a monthly rebate equivalent to the FairTax paid on essential goods and services, also known as the poverty level expenditures. The rebate is paid in advance, in equal installments each month. The size of the rebate is determined by the Department of Health & Human Servicesâ€™ poverty level multiplied by the tax rate. This is a well-accepted, long-used poverty-level calculation that includes food, clothing, shelter, transportation, medical care, etc.

Forget my earlier comment now that I am more informed. MarketTimer you made me look. Kudos'. So now that I am more informed I will add this.

Smells like rotten fish. 23% tax on all new goods and service at the point of final purchase. Sure is going to kill new home and car sales even if they lower the list price to reflect the new non-taxed production goods. I don't think people would be so quick to trade up every two year to a new SUV even though the list price is lower. People don't like paying 23% taxes on anything.

People like Bill Gates would be able to pass extreme wealth onto friends or family without any checks or balances. The current death tax helps prevent any one person for inheriting extreme wealth and with money is power. Power can buy many things in Washington.

Rebates are paid out monthly to offset for poverty. Everyone receives a monthly rebate for food, medical, and transportation costs. Problem is under the current system I can deduct anything over 7.5% of my gross adjusted income. Also, FSA to $5,000 is pretax.

Under the FairTax if you don't have a SSN you don't get the monthly rebate. No more under the table stuff.

Chances of this making it thru Congress not good. People don't like change. Still believe the old tax code is to complex, with to many holes. Don't know which side to come down on yet. Like I said taxes should be fair to everyone but I must agree with MT. Under this system the poor will get the short end of the stick. Middle class will get higher taxes. The ultra wealth will remain ultra wealth and be able to pass the wealth on to family and friend with out checks and balances. Maybe they should maintain the death tax. I'm not anti-rich but I do know that MONEY IS POWER and no one person or very small group of people should be able to control the country. O wait am I dreaming.Would like to see the tax rate a little lower also. By the way no other country uses this system. We would be the first. Still don't like give aways.

Sorry if I offended you MT. If it's any consolation you made me do a lot of reading and writing today.

Rod your live'n the dream man. Zero debt and the right attitude. I'm working to get there. Sometimes I stray but I'm working on it.

Good luck everyone. Sorry I wrote so much felt like talk'n. I'll shut up for the next week or two.

12-12-2004, 08:51 AM

Rod wrote:

Here are some FAQs for "FairTax":

http://www.fairtaxvolunteer.org/smart/faq-main.html

Source:

http://www.salestax.org/

Hey Bill, any comments on that monthly rebate check we would receive?

"And under the FairTax all families will receive a monthly tax rebate check."

God Bless:^

Rod,

The gov has a hard enough with one time a year...what will the costus for 12 times a year. Hey a monthly rebate check for checking the correct box is call socialism.

Keep the rosy glasses on...the stats speak for themselves. The calcuations from the article includes the rebate check factor.

Good luck with your future!

Bill