3 ms·

Besides the regressive nature of that, do the math to see how high that sales tax would have to be to replace the income tax. To give you an idea, total sales

Besides the regressive nature of that, do the math to see how high that sales tax would have to be to replace the income tax. To give you an idea, total sales in the USA was about $6 trillion, and income tax revenue was $2 trillion. So you'd need a 33% national sales tax. How do you think someone who makes $50,000 a year and spends it all would feel about paying 33% in taxes, when today they probably pay closer to 10% today? Or if you make housing and food tax free, you'd need an even higher tax rate to make up for it. Most countries that do a national sales tax do it in addition to an income tax.

mywittyname 4y ago
Thank you for doing the math on this. For some added support that your numbers are not crazy: https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates
phpisthebest 4y ago
>>So you'd need a 33% national sales tax. or you know a massive reduction in Federal Spending, the fact that US Sales was 6 trillion, and the US Government spent 4 Trillion should be ringing some alarms bells in people.... If we need a 33% national sales tax, that tells me the federal government SPENDS FAR TOOO MUCH MONEY
- jedberg 4y ago
  Our government spends in line with most other western economies as a percent of GDP. Percent of sales doesn't tell you much about government spending.
  - phpisthebest 4y ago
    this seems to be a "If all your friends jumped off a bridge would you" type of response. Just because other western nations also have irresponsible levels of spending does not justify the US spending
uticus 4y ago
Disagree slightly. It seems to me that the issue isn't how the taxation happens but where. In your example, the $55k person is paying less taxes up front than $$$ Mega-corp, but increased taxation on Mega-corp (and not $55k person) means Mega-corp now charges $55k person more for goods and services. So, your main point is worth considering, but it's missing a vital point: the current taxation system is opaque in where funds come from. An alternative simpler taxation system is more transparent on where funds come from - I don't consider that regressive. Let me put it crassly: if everyone paid 33% in taxes, the average voter would be more aware of the cost of tax-funded projects. Imagine what sort of voting that would lead to. I say "crassly" because in reality such a shift would definitely place a heavy burden on the poor in the near term. I honestly don't want that... but I also don't want to pull the wool over eyes.
- marcusverus 4y ago
  Most flat tax schemes I've heard of don't require businesses to pay the tax, for exactly that reason--it just ends up being passed on to the consumer, anyway. The Fair Tax is an example: https://en.wikipedia.org/wiki/FairTax https://en.wikipedia.org/wiki/FairTax

mywittyname 4y ago

Thank you for doing the math on this. For some added support that your numbers are not crazy: https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates

phpisthebest 4y ago

>>So you'd need a 33% national sales tax. or you know a massive reduction in Federal Spending, the fact that US Sales was 6 trillion, and the US Government spent 4 Trillion should be ringing some alarms bells in people.... If we need a 33% national sales tax, that tells me the federal government SPENDS FAR TOOO MUCH MONEY

jedberg 4y ago
Our government spends in line with most other western economies as a percent of GDP. Percent of sales doesn't tell you much about government spending.
- phpisthebest 4y ago
  this seems to be a "If all your friends jumped off a bridge would you" type of response. Just because other western nations also have irresponsible levels of spending does not justify the US spending

uticus 4y ago

Disagree slightly. It seems to me that the issue isn't how the taxation happens but where. In your example, the $55k person is paying less taxes up front than $$$ Mega-corp, but increased taxation on Mega-corp (and not $55k person) means Mega-corp now charges $55k person more for goods and services. So, your main point is worth considering, but it's missing a vital point: the current taxation system is opaque in where funds come from. An alternative simpler taxation system is more transparent on where funds come from - I don't consider that regressive. Let me put it crassly: if everyone paid 33% in taxes, the average voter would be more aware of the cost of tax-funded projects. Imagine what sort of voting that would lead to. I say "crassly" because in reality such a shift would definitely place a heavy burden on the poor in the near term. I honestly don't want that... but I also don't want to pull the wool over eyes.

marcusverus 4y ago
Most flat tax schemes I've heard of don't require businesses to pay the tax, for exactly that reason--it just ends up being passed on to the consumer, anyway. The Fair Tax is an example: https://en.wikipedia.org/wiki/FairTax https://en.wikipedia.org/wiki/FairTax