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The Biden Administration and All Things Politics

Eminence said:
I don't mind consumption taxes if they're set up in a progressive manner (which the easiest way to do is to set up a 'refund' for all individuals that essentially covers the tax for lower income folks).

Biggest plus for me would be the simplification of the system.
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That sounds good, until you get into the minutia of reporting income.
 
Eminence said:
By giving the refund to all nobody needs to report any income.

The refund simply covers the first X dollars of tax for everyone.
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So, the government just assumes that everyone gives them the correct amount?

This is obviously just the GOP trying to get the Democrats on record as voting for income taxes & the IRS.
 
gandalfe said:
So, the government just assumes that everyone gives them the correct amount?

This is obviously just the GOP trying to get the Democrats on record as voting for income taxes & the IRS.
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The GOP proposal is stupid, I'm certain of that and I haven't even read it (I imagine it takes an axe to the current system with nothing viable in its place).

But the system I'm trying to semi propose (I just wouldn't mind it as best I can tell, I don't know enough about any of it to really know) goes like this:

All purchases are subject to a federal tax (Buck said 15%, but I'd guess a bit higher, somebody with more econ knowledge can look into that more)

All adults/citizens/legal residents (there can be plenty of debate over who gets included) get a refund to cover their first X dollars of taxes from spending on the year.

Say we want the first 20k anyone spends to be taxfree, then if the tax rate were 20% we'd give everyone a $4,000 check that year to offset the sales tax.

No income would need to be reported at any point, and all taxing would be at the point of sale.
 
Too many big companies with strong lobbies depend on our current system of taxation for billion dollar revenue streams (TurboTax, H&R, TaxAct, etc.), so it will never change to anything more progressive. And rich people line too many pockets in congress, so their rates will never do anything except a token increase under one administration followed immediately by decreases from the next admin. We are stuck in this IRS hell since our politicians can be fully bought and paid for under the current system of lobbying and "donations", so what is best for the people will always take second place to what is best for the big lobbies, where the legislators make their "real" money. No one will shoot the cash cow.
 
Eminence said:
The GOP proposal is stupid, I'm certain of that and I haven't even read it (I imagine it takes an axe to the current system with nothing viable in its place).

But the system I'm trying to semi propose (I just wouldn't mind it as best I can tell, I don't know enough about any of it to really know) goes like this:

All purchases are subject to a federal tax (Buck said 15%, but I'd guess a bit higher, somebody with more econ knowledge can look into that more)

All adults/citizens/legal residents (there can be plenty of debate over who gets included) get a refund to cover their first X dollars of taxes from spending on the year.

Say we want the first 20k anyone spends to be taxfree, then if the tax rate were 20% we'd give everyone a $4,000 check that year to offset the sales tax.

No income would need to be reported at any point, and all taxing would be at the point of sale.
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sounds kinda socialismy to me ;)
 
fishonjazz said:
sounds kinda socialismy to me ;)
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Lol.

My biggest concern would be setting the UBI type number too low, where it wouldn't do much good and overall the tax would still be pretty regressive. But theoretically it becomes more progressive as it rises - at 100% we could have that socialism we dream of ;)

I imagine something separate would have to be done about stationary money/wealth that isn't being spent, personally I'd tax interest/stock gains at an even higher rate than income (sales in this scenario), but if we could get an equal rate I think that'd be a big plus over the current system.
 
Quick back of the napkin math. If I assume a VAT replaced the majority of US federal revenue and captured the entire US GDP and that I didn't want the median US household (currently about $68,000 a year) to pay taxes (effectively at least), I would be looking to set the new sales tax at ~34% and each US household would be receiving a check/UBI type thing for ~$23,000 a year.

Edit:

If done for US adults - 30% and ~$9,000 each

If done for all US residents - ~40% tax rate and ~$12,000 to each individual

Also assumes other government expenditures stay approximately consistent. I like the 'individual' version the most, obviously rates/amounts would go down if you wanted to set the barrier lower (I set it at median income) or higher if you wanted it higher.
 
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gandalfe said:
So, the government just assumes that everyone gives them the correct amount?

This is obviously just the GOP trying to get the Democrats on record as voting for income taxes & the IRS.
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I don't think this is a GOP proposal. They get too much money from tax attorneys and preparation companies to ever seriously float it.
 
One Brow said:
So, if I buy a car from a neighbor, they have to report the tax? Would interest be taxed? Capital gains?
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Presumably if they sold over Y dollars of stuff a year, yes they should be doing the tax. I have no clue what Y should be, that's for someone smarter than me to figure out.

Ideally I would like interest/capital gains taxed at the same or higher rates as to whatever the current primary tax system is (currently income, in this scenario sales), but I'd say that's a separate battle to fight. Having them lower than primary tax is pretty inherently regressive.
 
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