Reply #19: At 87% Sales tax rate?????? [View All]

[happyslug]

That is from the Article, I have read other studies that to replace the Income Tax with a National Sales taxes the rate has to be at least 60% (You can drop it to 30% if you include housing, i.e. every time you buy your home you NOT only pay the previous owners what you agree to pay for the home you also have to pay the government an additional 30% of that figure as part of the National Sales tax, renters will also have to pay a sales tax of 30% of their rent).

You must understand when Income taxes where first proposed in England during the Napoleonic Wars it was adopted do to the need to raise revenues, Nothing better has ever been found because an Income Tax taxes people on income generation, which means there is often a paper trail for the income and thus a relatively easy way to force people to pay the Income tax (Unlike Sales tax where people can do the transaction without paper and avoid any documentation that a taxable transaction took place).

Now you may say people illegally avoid income taxes today, yes, but not at the rate people avoid paying sales taxes. Studies have shown that if a sales tax start to exceed 10% people start to avoid paying it. Up to about 10% the sales tax is a nuisance more than a cost, over 10% it is more of a cost and people just stop paying it if they can.

paper's on this subject By William Gale (Who does a better job explaining the problems of a "National Sales Tax":
http://www.brook.edu/dybdocroot/views/articles/gale/20050516.pdf
http://www.budget.house.gov/hearings/galestmnt100604.pdf#search=\'Inclusive%20Tax%20Rate\'
http://kipesquire.powerblogs.com/posts/1116417663.shtml


Here is some pro-"Fair Tax" websites if you want to see the other sides arguments:
First the Farm Bureau, an organization that not only advocates the "Fair Tax" but whats the 1964 Civil Rights Acts repealed:
http://www.fairtax.org/pdfs/Farm_Bureau_FairTax.pdf#search=\'Inclusive%20Tax%20Rate\'

A "Calculator" that shows the advantages of "Fair Tax" (Provided it is no more than 30% rate):
http://www.pafairtax.org/resrcs/calculator.pdf#search=\'Inclusive%20Tax%20Rate\'

Henry George and his policy of taxing the value of land (not Buildings or other improvements but the land itself, George also opposed Sales taxes as taxes that harm an economy, he also disliked the Income Tax preferring taxes on land, for such a tax does the least harm to the economy):
http://www.etes.ucl.ac.be/BIEN/Files/Papers/2004Smith.pdf
http://www.nypl.org/research/chss/spe/rbk/faids/george.html
http://www.progress.org/books/george.htm
http://www.henrygeorge.org /
http://www.henrygeorge.org/hgi.htm

And a previous thread on this subject:
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=15245#15305