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As a person who wants to pay as little tax as possible (until of course, they start spending the tax money in ways that I see fit, which don't include blowing t

As a person who wants to pay as little tax as possible (until of course, they start spending the tax money in ways that I see fit, which don't include blowing things up), I have always been against the concept of a single national sales tax, or a flat tax. However, more and more I am realizing that the benefits of axing most of the IRS (wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. You can't dodge a sales tax aside from buying used (great incentive to curb our plastic consumer culture), but the good might outweigh my original objections. Let the states decide if they want to makeup the rest with property or sales tax, and the simplified tax system results in huge benefits.

Retric 16y ago
wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. ??? Where is the savings? The IRS is a tiny fraction of US government spending. Edit: IRS $12.15 billion in 2010, total federal expenditures $3.552 trillion. So it's 1/3 of 1% of the federal budget.
- gte910h 16y ago
  I believe he's talking about compliance with income tax regulations on the non-governmental side. Accountants, tax prep, etc.
  - Retric 16y ago
    I pay 120$ a year for someone else to do my taxes, I make ~80k per year. So add 1/6 of 1% so we are now up to 1/2 of 1%. Anyway, there is going to be a cost to administering any tax so while simplifying things may save money it's never going to zero. PS: I could see a simplified tax code saving people 20 billion a year, but good luck implementing that. Edit: For example, CC transaction fees cost more than current transition costs, so a sales tax would have higher compliance costs.
    - gte910h 16y ago
      Ever run a business, have a rental property, etc? Any of that will push your tax prep past 120 a year, for personal taxes alone.
- buro9 16y ago
  You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost.
  - anamax 16y ago
    > You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost. The US military is about 6% of Federal spending and didn't jump significantly during Iraq. For example, Iraq cost about $1T over 8 years. At least one of the stimulus cost about that, and we've had several since 2007. The long term trend for US military spending is down. It was over 20% before Vietnam.
    - Retric 16y ago
      It's closer to 1/4 of total spending. Out of $3.552 trillion in total federal spending: Defense-related expenditures outside of the Department of Defense constitute between $216 billion and $361 billion in additional spending, bringing the total for defense spending to between $880 billion and $1.03 trillion in fiscal year 2010.[6] http://en.wikipedia.org/wiki/Military_budget_of_the_United_States http://en.wikipedia.org/wiki/Military_budget_of_the_United_S... PS: The range of costs depends on what and when you consider something military spending. Do you count future pensions under current spending or do you count current pensions? etc.
      - anamax 16y ago
        The "outside the defense department budget" numbers are sketchy at best. Interest on debt for past wars isn't something that can be cut. "State Department financing of foreign arms sales" is diplomacy, not military spending. (It may be dumb diplomacy, but it's diplomacy.)
  - dctoedt 16y ago
    > I'm pretty sure it would still be as good for defence at a fraction of the cost. And your military-affairs expertise is derived from ... ?
- JoeAltmaier 16y ago
  Around tax time, thousands of smart people set up shop to "do your taxes". And all of us waste time and effort. Make it automatic and flat, and we ALL get to go back to work. Much larger savings that the total IRS budget.
  - stinkytaco 16y ago
    Where that sounds like a good idea, I think the reality would be grossly unfair. First of all, what's an income? Is it just money I earn? What about interest (paid and earned), capital gains (money I don't actually have, but earned) or government benefits? You're already making exceptions defining income. Second, there's the practical matter of people/business who operate on extremely thin profit margins and if you could even practically tax them. I think in reality a flat tax has great benefits to the wealthy but gets progressively more burdensome as you get poorer. After all, the more money you have, the more money you can make, thus making the "flat tax" exacerbate the gap between rich and poor.
    - JoeAltmaier 16y ago
      And its not grossly unfair now? A flat tax could be modified by a minimum income, age exception etc. But the trick is to make the calculation dead simple, and unavoidable. So thousands of smart people turn their attention to something else, like creating real value for instance.
chadmalik 16y ago
"You can't dodge a sales tax" You're kidding right? Replacing income tax with a national sales tax would immediately create a massive black market that didn't exist. Its always humorous to me when people claim that a national sales tax would allow the IRS to be done away with. Uh, think it through. the sales tax would need to be around 25% to replace our income taxes. So you don't think people would be trying to dodge that? And the IRS wouldn't be going around checking retailers to make sure they were paying the tax? LOL...you think the IRS is intrusive now, wait until they are trying to track EVERY SINGLE TRANSACTION. Now there's some big government for you!
- natrius 16y ago
  Value-added taxes are hard to avoid because they're collected at every level of production. A black market would only be able to easily avoid the tax on the difference between the wholesale price and the retail price.
Dove 16y ago
If you like this concept, I recommend looking into the FairTax. It is a very well thought out attempt to replace all taxes with a single sales tax. I am a fan, but even if you are not, the analysis of the situation in the papers at fairtax.org is quite robust and worth reading.

Retric 16y ago

wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. ??? Where is the savings? The IRS is a tiny fraction of US government spending. Edit: IRS $12.15 billion in 2010, total federal expenditures $3.552 trillion. So it's 1/3 of 1% of the federal budget.

gte910h 16y ago
I believe he's talking about compliance with income tax regulations on the non-governmental side. Accountants, tax prep, etc.
- Retric 16y ago
  I pay 120$ a year for someone else to do my taxes, I make ~80k per year. So add 1/6 of 1% so we are now up to 1/2 of 1%. Anyway, there is going to be a cost to administering any tax so while simplifying things may save money it's never going to zero. PS: I could see a simplified tax code saving people 20 billion a year, but good luck implementing that. Edit: For example, CC transaction fees cost more than current transition costs, so a sales tax would have higher compliance costs.
  - gte910h 16y ago
    Ever run a business, have a rental property, etc? Any of that will push your tax prep past 120 a year, for personal taxes alone.
buro9 16y ago
You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost.
- anamax 16y ago
  > You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost. The US military is about 6% of Federal spending and didn't jump significantly during Iraq. For example, Iraq cost about $1T over 8 years. At least one of the stimulus cost about that, and we've had several since 2007. The long term trend for US military spending is down. It was over 20% before Vietnam.
  - Retric 16y ago
    It's closer to 1/4 of total spending. Out of $3.552 trillion in total federal spending: Defense-related expenditures outside of the Department of Defense constitute between $216 billion and $361 billion in additional spending, bringing the total for defense spending to between $880 billion and $1.03 trillion in fiscal year 2010.[6] http://en.wikipedia.org/wiki/Military_budget_of_the_United_States http://en.wikipedia.org/wiki/Military_budget_of_the_United_S... PS: The range of costs depends on what and when you consider something military spending. Do you count future pensions under current spending or do you count current pensions? etc.
    - anamax 16y ago
      The "outside the defense department budget" numbers are sketchy at best. Interest on debt for past wars isn't something that can be cut. "State Department financing of foreign arms sales" is diplomacy, not military spending. (It may be dumb diplomacy, but it's diplomacy.)
- dctoedt 16y ago
  > I'm pretty sure it would still be as good for defence at a fraction of the cost. And your military-affairs expertise is derived from ... ?
JoeAltmaier 16y ago
Around tax time, thousands of smart people set up shop to "do your taxes". And all of us waste time and effort. Make it automatic and flat, and we ALL get to go back to work. Much larger savings that the total IRS budget.
- stinkytaco 16y ago
  Where that sounds like a good idea, I think the reality would be grossly unfair. First of all, what's an income? Is it just money I earn? What about interest (paid and earned), capital gains (money I don't actually have, but earned) or government benefits? You're already making exceptions defining income. Second, there's the practical matter of people/business who operate on extremely thin profit margins and if you could even practically tax them. I think in reality a flat tax has great benefits to the wealthy but gets progressively more burdensome as you get poorer. After all, the more money you have, the more money you can make, thus making the "flat tax" exacerbate the gap between rich and poor.
  - JoeAltmaier 16y ago
    And its not grossly unfair now? A flat tax could be modified by a minimum income, age exception etc. But the trick is to make the calculation dead simple, and unavoidable. So thousands of smart people turn their attention to something else, like creating real value for instance.

chadmalik 16y ago

"You can't dodge a sales tax" You're kidding right? Replacing income tax with a national sales tax would immediately create a massive black market that didn't exist. Its always humorous to me when people claim that a national sales tax would allow the IRS to be done away with. Uh, think it through. the sales tax would need to be around 25% to replace our income taxes. So you don't think people would be trying to dodge that? And the IRS wouldn't be going around checking retailers to make sure they were paying the tax? LOL...you think the IRS is intrusive now, wait until they are trying to track EVERY SINGLE TRANSACTION. Now there's some big government for you!

natrius 16y ago
Value-added taxes are hard to avoid because they're collected at every level of production. A black market would only be able to easily avoid the tax on the difference between the wholesale price and the retail price.

Dove 16y ago

If you like this concept, I recommend looking into the FairTax. It is a very well thought out attempt to replace all taxes with a single sales tax. I am a fan, but even if you are not, the analysis of the situation in the papers at fairtax.org is quite robust and worth reading.