Next President - Abolish the IRS

[AAAintheBeltway]

We'll still need an alphabet agency. Someone needs to collect the taxes. And verify the forms.

Also, the number of transactions will greatly exceed the number personal/business tax returns. Probably by a factor of 1,000 or more (i.e figure all transactions you do in a year, multiply that by the number of adults and businesses).

What's the plan for the logistics?

Do we eliminate cash/barter/trade transactions?
Do we link all the cash registers and/or credit card terminals to a central processing center? Or is there a separate terminal just for the gov't?
Do the transactions/taxes funnel to separate state agencies, or a single federal agency, which is then responsible for dispersal to state and local governments.
Do the funds automatically get deducted from the business bank accounts? Over what time frame?
Or do the businesses have to file forms and electronically deposit the funds due, like they do with payroll taxes?
Do businesses pay the tax when buying wholesale or do the customers upon resale? Or both?
What about services? Are services subject to consumption taxes? Lawyer services? Doctor's appt? Hospital stays? Car wash? Paying the babysitter?

Lot of questions....

As much as I despise our tax system, a consumption-based system would be worse.

I have three main objections.

One, it is unfair to people who paid high rates under the current system their entire lives and planned on a retirement where they would be lightly taxed. Suddenly, they are goign to shell out another 20-30% fro everything they need.

Two, it would be hideously complex. What triggers the tax? a retail sale only? Or intermediate sales of goods used in manufacturing, etc? Do we really want to encourage vertical integration solely to avoid taxes? The underground economy would mushroom. How woudl the IRS track cash purchases without draconian bank account monitering?

Three and most fundamentally, we coudl easily end up with the worst of both worlds, a retained income tax system plus a national VAT. That is clearly the goal of democrats. It would require a Constitutional amendment banning any future income tax system. That's neither wise nor possible. Careful what you wish for.

 

[blah12345678]

Let me guess. You support keeping the IRS? Did you vote for Obama?

None of the above.

I believe in 1 thing - benevolent dictatorship. And I would be that dictator....

 

[Ricter]

A comsumption based tax AND an income tax is what you will get. It's a fantasy to believe or to hope that income taxes will ever be done away with.

That's what we have in many states, with their sales tax. And it's the norm in Canada, with its "government sales tax", aka GST.

 

[BSAM]

My friends...Many of you are writing things that you are assuming because you haven't read The Fairtax Book.

You can't know what you don't know.

Whatever rate you've heard talked about (including in The Fairtax Book or any other place) may not
be the final tax point.

P.S.---(Almost) every state in the USA already does a "consumption" tax at the cash register. There's no reason it can't be done for the feds at the same time.

Wouldn't it be great if April 15th every year was just another beautiful spring day?

www.fairtax.org

 

[blah12345678]

As much as I despise our tax system, a consumption-based system would be worse.

I have three main objections.

One, it is unfair to people who paid high rates under the current system their entire lives and planned on a retirement where they would be lightly taxed. Suddenly, they are goign to shell out another 20-30% fro everything they need.

Two, it would be hideously complex. What triggers the tax? a retail sale only? Or intermediate sales of goods used in manufacturing, etc? Do we really want to encourage vertical integration solely to avoid taxes? The underground economy would mushroom. How woudl the IRS track cash purchases without draconian bank account monitering?

Three and most fundamentally, we coudl easily end up with the worst of both worlds, a retained income tax system plus a national VAT. That is clearly the goal of democrats. It would require a Constitutional amendment banning any future income tax system. That's neither wise nor possible. Careful what you wish for.

Yes. The goal is to implement a system that is simpler and unambiguous. A system that allows for as few exceptions and what-ifs as possible.

A consumption tax would be as complex as our economy, with the need to contend with all the gray areas of our financial lives. As well as the moral ambiguities also. For example, do we tax the hospital stays of cancer patients and car accident victims? How about insurance premiums or claims? What if you sue somebody and win. Are judgments taxable? Who pays - the winner or the loser?

There's a strong likelihood the taxes paid would be higher than what most people pay in income taxes, especially in the lower income brackets.

It's definitely not scalable, no matter how high-minded the concept is. After all, it doesn't account at the present time for virtual transactions/currencies. And if it can't handle present-day innovations, how will it hold up to future innovation?

The best tax system is simpler in concept, implementation, maintenance, and enforcement than the current system and ideas.

 

[Scataphagos]

None of the above.

I believe in 1 thing - benevolent dictatorship. And I would be that dictator....

Bush was once caught on a hot microphone saying, "I wouldn't mind a dictatorship as long as the dictator was me."

It's good to be king. Just ask Odumbo.

 

[Scataphagos]

The best tax system is simpler in concept, implementation, maintenance, and enforcement than the current system and ideas.

Never happen. Such a system couldn't so easily be manipulated for political gain.

 

[blah12345678]

Whatever rate you've heard talked about (including in The Fairtax Book or any other place) may not
be the final tax point.

Just read the comparison chart. Not bad except the part for the "we do not tax the poor" part.

How is a "poor person" defined. What safeguards will be implemented to prevent the inevitable fraud and scams?

Obviously, there will need to be some agency to accept/verify/approve/issue the waivers. In the meantime, there will be probably a few underpaid workers selling the waivers out the back door. Or dealers selling counterfeit waivers on the streets in the hood.

Another doohickey gumming up the works. The innovators will find a way to mess it up if you don't adopt an "Absolutely No Exceptions" policy.

 

[Tsing Tao]

Just read the comparison chart. Not bad except the part for the "we do not tax the poor" part.

How is a "poor person" defined. What safeguards will be implemented to prevent the inevitable fraud and scams?

Obviously, there will need to be some agency to accept/verify/approve/issue the waivers. In the meantime, there will be probably a few underpaid workers selling the waivers out the back door. Or dealers selling counterfeit waivers on the streets in the hood.

Another doohickey gumming up the works. The innovators will find a way to mess it up if you don't adopt an "Absolutely No Exceptions" policy.

Yes, and even if the innovators mess it up, it can't possibly be worse than what we have now!

 

[jem]

the way our govt and the FED currently operate the personal income tax revenue is almost irrelevant. they spend trillions anyway... why not just spend more and not tax. if interest rates go up a little all it will do is cover the interest.

or we can do what I suggest...

what we need to do is just cap budget spending. if we have no personal income tax the economy will boom... we grow the economy and inflate until the tax revenue arrives from other taxes.

Where's the revenue going to come from? All business taxes? Investment taxes? Excise taxes? Customs duties?

My plan is as follows:

Personal: Online filing only
Based upon US income only
First $50K tax-free (increased 2% per year)
No other deductions, exemptions, or credits
15-year ladder to reduce rate from initial 30% to 15%
1 income bucket - no distinction between wage income, investment income, interest/dividend income, etc


Business: based upon worldwide gross revenue (to eliminate offshoring schemes)
first $1M in revenue tax-free (need to protect small businesses)
$1,000,001 - $1B - 2% of gross revenue
$1,000,000,001 to $5B - 4% of gross revenue
above $5B - 25% of gross revenue (the goal is to get rid of the really big businesses in favor of a lot of smaller businesses)

A business is everything that isn't a person - partnerships, corporations, LLCs.

Sole proprietorship will need to be eliminated. Doesn't make sense, financially or liability-wise, and you can't keep track of them.

Personally, I would love to see the elimination of the accounting, HR Block, and tax software industries. And I would love to see the elimination of 90%+ of the IRS' head count. Not to mention the elimination of the all the printed forms and booklets.

I have no opinion on the current state of excise taxes.

Regarding customs duties, I view the world as a global marketplace. Ultimately, duties should benefit consumers, not businesses, so the customs rates should be low to encourage importing, but not 0% since the bad apples will abuse it to eliminate competition. And, of course, on-shoring is more beneficial, like what Toyota and Honda have done...