“President George W. Bush said he would press ahead with the war on terrorism and his goals for the U.S. economy such as changing the tax code during his second term,” Bloomberg News reports. In “Simplifying Federal Taxes: The Advantages of Consumption-Based Taxation,” Chris Edwards, Cato director of tax policy studies, writes: “Minor simplification reforms will not be enough. The tax system is caught in a spiral of continual change and nonstop growth in rules. Since the mid-1980s there have been 7,000 federal tax code changes and a 74 percent increase in the number of pages of tax rules. Complying with federal tax requirements wastes 6 billion hours each year as families and businesses fill out tax forms, keep records, and learn tax rules.”
[Read more about the Fair Tax Plan]
It is definately time for a national sales tax and the elimination of the income tax.Nice blog!
Simpler taxes (e.g., lowering rates by closing of loopholes), sure. Sales taxes are inherently regressive, though. The poor and middle class will pay a much larger share of the bill since most or all of their income goes to consumption, whereas those with large incomes can save, in this case, tax-free. Great for wealth creation at the top end – sucks for everyone else.
Nice post!I was thinking flat tax as well, one with a generous first deduction for everyone. I was thinking $25000 for a single filer, $50000 for families.A sales tax would be a good supplement, but only on items that cannot be considered necessities, such as yachts, $200 shoes or purses, or multimillion dollar homes. This would effectively be a tax break for the middle- and lower-classes. I was also toying around with the idea of dropping business taxes. This would be phased in slowly and a temporary program of tax amnesty should be enacted at the same time. After that period of amnesty is over, every company will be fair game for audits on past records. With the flat tax initiated and no business taxes, there will be plenty of auditors available for diving into past records.One of the main reasons that the business tax is bad is that it is an invisible tax on consumers: any costs that a business has is passed onto its consumers. Consider this a trackback too. I’ve had a series of posts on taxes, and I think this is a great addition to them.JacquiEnviropundit
It would be a monster project to unwind our current system, but like I tell my friends when they are thinking about taking on any new project, “How do you eat an elephant? One bite at a time”I love the idea and I hope we end up with it.Uncle Jack
The sales tax wouldn’t be as regressive as it first looks. There is between 20 and 30 percent increase in the cost of goods to due taxes at different stages. Remove that and replace it with the sales tax and there shouldn’t be too much difference felt by the average person. Plus, it would make it much cheaper to manufacture in the United States.
Gindy, that sounds good but I do have a question about your statement. Do you mean that you want to repeal business taxes when sales taxes are enacted?
Jacqui, that’s exactly how the program would work: corporate taxes would be eliminated. And, relating to the comment about lower-income people paying a higher percentage… Every American family would get a check every month to reimburse them for the amount of taxes paid on the basic necessities to live. So the only taxes they would pay at all would be the sales tax on things other than necessities.It’s a very interesting concept, be sure to see the Fair Tax web site./Jim