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Poll: Consumption tax

Started by Ron Wenrich, April 08, 2007, 06:53:17 PM

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Ron Wenrich

Fair tax has been kicked around for the past several years.  Being that tax day is next Monday, I thought it might be good to kick around.

Poll ends 4/23/07
Never under estimate the power of stupid people in large groups.

Tom

I don't care for it because someone "else" decides the value of consumption.   I like the idea of a flat tax, if it could be made to work.

E.B.

I have to agree with Tom 1000%



                                                                                                                      EB
A day without a Smile is a wasted day

LeeB

Don't recon i know what a consumtion tax is. Would that be like a sales tax? If so, I would support a national flat sales tax on all purchases, be it finished goods or raw materials. That way every one pays. If you can't afford much, you don,t pay much. If your making it hand over fist and spending it to make it you pay your share also. If your making it and and saving more than you spend you get to keep it. Sounds fair to me. No special breaks for anyone or any industry. If everyone coughs up the per person amount would'nt need be that great. Or maybe I'm full of it. LeeB
'98 LT40HDD/Lombardini, Case 580L, Cat D4C, JD 3032 tractor, JD 5410 tractor, Husky 346, 372 and 562XP's. Stihl MS180 and MS361, 1998 and 2006 3/4 Ton 5.9 Cummins 4x4's, 1989 Dodge D100 w/ 318, and a 1966 Chevy C60 w/ dump bed.

Ron Wenrich

Here's what the fair tax is, from what I understand of it.

There would be no taxes on your earnings.  That would include Social Security, Medicare or any on corporations.  There would also be no inheritance tax. 

There would be a 23% tax on new goods.  They figure that there are about 23% of imbedded taxes in the goods you buy now.  So, instead of having it withheld as an employment tax, it will be paid at the store.

To boot, the plan also calls for a prebate each month to all head of households.  The prebate would cover the estimated tax you would pay on goods up to the poverty level.  It would do away with the earned income tax credit that those under a certain level gets a tax time.

Taxes would be collected at the retail level only when the good or service is sold.  No tax on used goods. 

They say the math adds up.  Its designed to be a neutral tax, meaning the tax levied would equal the current taxes collected, but with a lot less bureaucracy.
Never under estimate the power of stupid people in large groups.

LeeB

Wood that include purchases made by manufactures and corporations so every body pays a slice of the pie? I feel for those below the poverty line, but i feel that there should be no exclusions for anyone. I guess that would be my idea of a flat tax.
'98 LT40HDD/Lombardini, Case 580L, Cat D4C, JD 3032 tractor, JD 5410 tractor, Husky 346, 372 and 562XP's. Stihl MS180 and MS361, 1998 and 2006 3/4 Ton 5.9 Cummins 4x4's, 1989 Dodge D100 w/ 318, and a 1966 Chevy C60 w/ dump bed.

Larry

I sure would like to see a proposal put on the table.  I would think it could be tailored for little or no impact on those with small incomes...zero tax on food and mega tax on the 600 horsepower cigarette boats. 
Larry, making useful and beautiful things out of the most environmental friendly material on the planet.

We need to insure our customers understand the importance of our craft.

sawguy21

We have a federally imposed General Sales Tax (6%) on all goods that was introduced to replace the manufacturers tax. Residents of all provinces except Alberta pay a Provincial Sales Tax, rate varies among provinces, on top of that. If I trade my truck in, I submit GST on the trade in value as if I sold it outright, it is added at the time of purchase,  plus pay PST and GST on the vehicle I purchase. Grrrr. If I sell the truck privately, no problem as I am not a motor dealer. This consumption tax is over and above income tax.
Some years ago, I ran into an interesting problem. I had done some work as a contractor for a large company. I did not have a GST registration number as my gross was less than $3000.00 per year. The company's computerized A/P system could not issue a cheque without this number. They finally cut a manual cheque from petty cash. Too DanG much bureaucracy. >:(
old age and treachery will always overcome youth and enthusiasm

metalspinner

I think I would be for something like that.  It sure would make me control my spending.  It would also make all those people who don't pay income taxes antie up their share -  including illegals, tourists, etc...

I wonder how this would be enforced on cash business' like custom sawing? ???
I do what the little voices in my wife's head tell me to do.

LeeB

If you did away with an income tax and made it a sales tax or a tax on purchases it wouldn't matter what you earn cash wise. You would pay your share every time you buy. Buy less, save more, Pay less taxes. Seems like it could work somehow. I suppose you would have to make food and meds non tax items. Probably housing too.
'98 LT40HDD/Lombardini, Case 580L, Cat D4C, JD 3032 tractor, JD 5410 tractor, Husky 346, 372 and 562XP's. Stihl MS180 and MS361, 1998 and 2006 3/4 Ton 5.9 Cummins 4x4's, 1989 Dodge D100 w/ 318, and a 1966 Chevy C60 w/ dump bed.

TexasTimbers

I was initially for the Flat Tax when Dick Armey was pushing it back in the late nineties. Then I got to really digging deep into the national sales tax when I heard about it. I am all for the National Sales Tax now and have been since about 02.
I think a side by side comparison of the 3 clearly shows the advantages of the NST. There is a good one at fairtax.org.
The NST is the one the politicians least like, so you can bet it's the best for us! ;)
fairtax.org has an entire page dedicated to the intentional, and un-intentional misinformation put forth by politicians and the media to keep the public from getting an accurate and clear picture of why this tax really is, the "fair" tax.
The oil is all in Texas, but the dipsticks are in D.C.

Brad_S.

Of all the taxes, it's the local school tax on property that frosts my shorts. Maybe it's sour grapes, but having to pay an ever growing, unchecked school tax when I am childless seems grossly unfair. >:( If by some chance the budget gets voted down, the first thing they say they are going to do is cut the most poplular activities unless the "revised" budget is passed rather than make any meaningful reforms. Sure enough, the budget always passes on the next vote.  smiley_furious
A pay for only what you use tax seems much more fair, a national sales tax would fit that bill.
"Life is what happens to you while you're busy making other plans." J. Lennon

Ernie_Edwards

Sure do like the idea of a national sales tax. Course we could really muddy the water and have a different tax rate on the purchase of consumables either produced out of country or by foreign owned entities.

TexasTimbers

Brad I feel your pain......and then some. Times 5! ;D I have to pay the same tax as the guy living next door to me that has no children, but I get pay for rearing those 5 too. yes it is my choice but consider that they become doctors, policemen, scientists, and sawyers, and more taxpayers  that you benefit from as much as I do, but you got all that for just paying the same amount of tax I did.  You lucky skunk you are getting a great deal! It is YOU who is not doing his part by not helping preserve our culture! ;)

I would not trade with you for the world, but really that is the one tax you do not want to eliminate even though they are WAY to high because of embezzlemnt and fraud and waste, unless you want to be totally dependent on holistic medicine and police your own streets.

I can't begin to describe how much money it takes per month to pay for 5 of them. it is why i bought a used LT40 instead of a new one. Hey I am just thankful to be able to have gotten one at all.

One of my kids might cure you of cancer one day Brad. Then again, one of my kids might mug you on the street one day too. :D
The oil is all in Texas, but the dipsticks are in D.C.

Tom

And none of it is the panacea that we desire.  Just because the Feds create a tax that the population can live with, doesn't mean that the States must follow.  Nor does it mean that county and city taxing authorities will want to give up their grip on free money either. Taxing authorites aren't necessarily government.  There are port authorities, school districts, electric companies and the like who can get taxes levied on a whim.  The USPS isn't government, just ask them.  Yet the cost of stamps continues to rise and they are always knocking on the door of congress.  The communications companies seem to be a good avenue for the collection of taxes that you have trouble identifying too.  

I don't think it's as simple as we would like to believe.  Prepare for a lot of fights, not just a National election.

Mooseherder

Voted Don't know because I think there is alot more to the taxation issue being debated. Would it create a Black Market economy? Would it solve the Cash Businesses into paying their fair share or leave the rest who can't hide it to pay more, as it is now?
No way, no how, should this country have this debt. It irks me when a politician says "I think the American People, blah, blah, blah."  All the while, the person making that statement is part of the problem and isn't representing me, they are from another State. They should only represent that State. Therein lies some real issues. These people never met a tax they didn't like.<(Reagan) Pork and entitlements my friends is the real problem. All Bills signed into law should not have anything attached to it. Each Bill should be voted on it's own merits. Most of the career politicians are still there even after getting us into this debt. Too many layers of goberment. :D

sawguy21

The level of taxation here has created a huge underground economy (I have been part of it but don't tell anybody :D) and a lot of our taxes are spent trying to stop it.  ::)
old age and treachery will always overcome youth and enthusiasm

Sprucegum

Yes, thanks to the Gov't Sales Tax our underground economy is booming  :-X

I have read that in the Bahamas, or was it Bermuda?, they have no income tax at all. They do have a very high sales tax on new items. No local ever buys anything new there, they wait for the tourists to bring something over and barter with them.

Back in the 70's one of our financial gurus was trying to promote a WEALTH TAX You figure up your net worth and pay 5% of that each year. No income tax, no sales tax, no exceptions.

What can go wrong?  ;D  ;D

TexasTimbers

Sprucegum when did you move to Canddidda? Never had noticed that red maple leaf in your sideline before.
The oil is all in Texas, but the dipsticks are in D.C.

Sprucegum

I was born here so long ago I can hardly remember it.
I have travelled out of the province but never lived or worked anywhere else and I reckon I'll keep it that way.  8)

Spring is only another couple months away  :-\

Brad_S.

Quote from: kevjay on April 08, 2007, 11:26:35 PM
It is YOU who is not doing his part by not helping preserve our culture! ;)
I know you added a wink wink, nod nod, but I get this all the time. I've composed and deleted two different responses, but they both would have sent me to the woodshed. ::) Suffice it to say that usually when it is said, it is not said in jest nor do the purveyors really mean "culture".
"Life is what happens to you while you're busy making other plans." J. Lennon

Handy Andy

   Yeah, I'm for the fair tax.  Really tired of the KGB (irs) and having to spend piles of money on tax preperation.  And you never know if it is really correct.  My accountant is using  a tax program now, so probably as right as he can get.  But people make mistakes.  Had a bank screw up a closing statement once, cost me about 3000$ after the audit.  Only been audited once, but it is an experience.
  About taxing corporations, that is just a hidden tax on you, they pass their costs on in the price of the product.  Eliminate the tax, the price goes down. They are in competition for your dollars. 
  Anybody who gets the Neal Boortz show on radio can hear about the fair tax.  He has also done a Fair Tax book.  The whole system was designed by a group trying to find the least offensive way to pay for the federal government.  While I don't think we should pay for federal expenses, it is less offensive than the current system.  And we have had a flat tax, remember the Reagan tax reform?  That's what it was.  The congress can't leave it alone.  They have to make special deals in return for contributions so they can stay on the gravy train.  Jim
My name's Jim, I like wood.

Ron Wenrich

The theory is that since there are no more embedded income taxes in products, the price should drop.  So, all retail products and services would be taxed.  The tax would be incorporated in the cost of the item.  Anyone, including government and business, buying retail would pay the tax.

So, if you're selling retail services, like custom sawing, you would be collecting the tax.  If you provide a service before it gets to retail, something like consulting, then I suppose you wouldn't collect the tax. 

A few numbers that fair tax has thrown out is that it costs the American economy about $500 billion to prepare and avoid taxes.  Those costs are filtered down to the consumer.  A lot of foreign countries keep US money in their banks to avoid taxes.  The current figure is $11 trillion.  That money isn't used for US investments.  Supposedly a lot of that would be coming home.  Last year, the feds missed out on $350 billion due to the underground economy.

The black market supposedly wouldn't be much of a problem.  You would have to have a willing buyer and a willing seller work together to commit the fraud.  And, it would have to involve a retail item.  I don't buy this aspect.  The current black market and underground economy accounts for 10-20% of GDP.  Remember all those illegals performing services are in this group. 
Never under estimate the power of stupid people in large groups.

crtreedude

I pulled the lever for the consumption tax because it would be simpler and fairer. You buy more, you pay more tax. I would also think having some items with more tax than others - for example, food, clothing, shelter - virtually no tax as long it was at the basic level (i.e. a house up to the average or a bit beyond, no tax, more than that, it starts to have tax because it is no longer a necessity)

But, we have this kind of tax down here, until you get pretty high in income, there really isn't an income tax - and this develops the biggest blackmarket and under the table dealings you ever saw. We are constaintly having to tell works and ENFORCE that we will buy nothing without a receipt.

Our tax write-off and the fair tax are about equal but most people pay no tax so they can not understand why we pay our taxes since it isn't considered fair for us to pay when almost no one else does.

Every action has an equal and opposite reaction - you have to think about what changes will occur because of a consumption tax. Already there is a tremendous amount of wages paid in the USA with documentation - this would spread to all areas if Costa Rica is any kind of example.
So, how did I end up here anyway?

Burlkraft

Here in Wisco we are taxed on our taxes....and it's getting worse...consumption tax is the only fair way to tax. The udder thing that sticks in my craw is school tax. A LARGE part of my taxes are school taxes, yet apartment dwellers who have kids pay no school tax. I'm for helping out with schools, but I think there should also be a school use tax. Every large apartment building that goes up means a new school referendum and more tax for property owners.... >:( >:( >:(
Why not just 1 pain free day?

thurlow

 I copied this from another site; don't know where it came from originally........................

Tax his land,   Tax his bed,  Tax the table at which he's fed.  Tax his
tractor, tax his mule, teach him taxes are the rule!

Tax his cow,  Tax his goat,  Tax his pants,   Tax his coat.   Tax his ties,
Tax his shirt,   Tax his work,   Tax his dirt.

Tax his tobacco,  Tax his drink,   Tax him if he tries to think.   Tax his
cigars,   Tax his beers,  if he cries,

then Tax his tears.  Tax his car,   Tax his gas, find other ways   To tax
his mass  Tax all he has,  then let him know

That you won't be done till he has no dough. When he screams and hollers,
then Tax him some more,  Tax him till

He's good and sore.   Then tax his coffin,  Tax his grave,  Tax the sod in
which he's laid.   Put these words  upon his tomb,

"Taxes drove me to my doom..."  When he's gone, do not relax,  its time to
apply The inheritance tax.

Accounts Receivable Tax,  Building Permit Tax,  CDL license Tax, City Income
Taxable Tax ,  Cigarette Tax,  Corporate Income

Tax,  Dog License Tax,  Federal Income Tax,  Federal Unemployment Tax
(FUTA),  Fishing License Tax,  Food License Tax,

Fuel permit tax,  Gasoline Tax (42 cents per gallon),  Hunting License Tax,
Inheritance Tax,  Interest expense,  Inventory tax

IRS Interest Charges,   IRS Penalties (tax on top of tax),   Liquor Tax,
Luxury Taxes,   Marriage License Tax,  Medicare Tax,

Property Tax,   Real Estate Tax,  Service charge taxes,   Social Security
Tax,   Road usage taxes,   Sales Tax,  Recreational Vehicle

Tax,   School Tax,   State Income Tax,   State Unemployment Tax (SUTA),
Telephone federal excise tax,   Telephone federal

universal service fee tax,   Telephone federal, state and local surcharge
taxes,   Telephone minimum usage surcharge tax

Telephone recurring and non-recurring charges tax,  Telephone state and
local tax,   Telephone usage charge tax,  Utility Taxes

Vehicle License Registration Tax,   Vehicle Sales Tax,   Watercraft
registration Tax,   Well Permit Tax,   Workers Compensation Tax,

COMMENTS: Not one of these taxes existed 100 years ago, and our nation was
the most prosperous in the world. We had absolutely no national debt, had
the largest middle class in the world, and Mom stayed home to raise the
kids.   What happened?   And I still have to "press 1" for English .
Here's to us and those like us; DanG few of us left!

crtreedude

Thurlow, wait till you have to press 2 for English...  :o
So, how did I end up here anyway?

TexasTimbers

Sorry Brad I struck a nerve. I truly wasn't leaning on you. People who are serious about critisizing others for choosing not to have children are indeed small-minded at best. I carry the humor too far often and did it again. I apologize.
The oil is all in Texas, but the dipsticks are in D.C.

Quartlow

I'm in the same boat as Brad, no kids, but school taxes. Go figure.
I don't need any kids, I figure a certain Texan here has enough for me and him  :D  :D  :D
Breezewood 24 inch mill
Have a wooderful day!!

gibby

Fair tax for me.
But make congress vote 2/3s for any raise in the tax, make it hard for them politicians in DC to get more of our hard earned money. Also make the main stream media accountable, here in NJ they raised the sales tax from 6% to 7% and the news media was calling it "only a penny on a dollar" and they said it was only a "1% increase". Well I am not the best at math but if I divide 6 by 7 I get an increase of 15% not the 1% they where reporting.


gibby

wiam

but 7-6=1   ::) ::) ::) ::)

Will

ps politicians think we are morons

Bill

Yep - I think I'm in favor of it. I want the govt to quit its idea of just tapping my bank acct to see what I've made and what I'm allowed to deduct then allowing me to keep what they think I can live on - leastways that's what the rumor mill says their latest scheme is after doing away with cash - they surely don't like that darn ole cash economy - too much unreported goings on for them. Me I figure iffen you pay the tax when you buy something - well the rich folks won't get off on loopholes any more - which I really like. Also like was said if you want to save ( or are poor ) you don't pay but iffen you spend  ( and especially if you be rich ) you pay when you spend - no exceptions - even for the those know it alls inside the beltway. And lest any rich folks think they can get off by buying overseas and bringing it into the country - well they get to pay the highest rates when they come back - seeing they deprived someone from here making a buck. Yep - starting to sound OK. . .

Brad_S.

We're good, Kevjay. I knew you were ribbing me but I've had too many experiences with racists berating me and sincerely angry that I'm not reproducing, so yes, it is a bit of a raw nerve.
"Life is what happens to you while you're busy making other plans." J. Lennon

OneWithWood

I have always championed a fair tax, consumption tax, or NST (pick the title you like) with the caveat that the states would need to follow suit.  Not likely to happen.
One With Wood
LT40HDG25, Woodmizer DH4000 Kiln

metalspinner

I'm beginning to wonder if my state already has this "fair tax".  We do not have a state income tax in Tennessee, but pay a 9.25% sales tax.  Is my wondering right?
I do what the little voices in my wife's head tell me to do.

Ron Wenrich

That depends.  If they charge the sales tax only on retail goods, then its a consumption tax.  If they charge it on everything, then its not.  Items that are resold, or have already had a tax levied, would not be charged.  For example, used cars won't have a consumption tax.

We have a sales tax on most goods, except food and clothing.  Primary manufacturers don't have to pay sales tax on goods used in the processing.  That's why so many loggers had sawmills.  They were then primary manufacturers, and didn't have to pay tax on things like skidders and tires.

Never under estimate the power of stupid people in large groups.

Don_Papenburg

We are in the midst of a governor wanting to tax every transation on buisiness that do over 1million , now he said 2million .  because he promised not to raise the income tax and this would be the only fair way as only the buisiness would have to pay :D ;D >:( :o     This is from a govner who hardly makes it to the state capital except for photo ops and supenas.    He calls his gross recipts tax a fair tax .
Frick saw mill  '58   820 John Deere power. Diamond T trucks

jrdwyer

It's tax time again. I just bought the software Monday and I got a free music CD this year with the $25 program. Man I am procrastinating! I guess you can tell I don't get that excited about accounting.

I do need the software to prevent errors with schedule C and all those sub-schedules. It is too complicated for even a simple business like mine without some form of electronic tally and error checker.

A consumption tax on new retail goods would be an interesting experiment. New everything sales would stall or fall and used goods would be hot. It could be better for the environment as it might stimulate the purchase of durable goods and also instill the novel idea of fixing things. I'm not sure how the electronics industry would fare under this scenario.


Robert R

I got no kids either but I love school taxes and bonds.  Good schools raise my property value better than nearly anything else.  I've even been asked to run for the school board because I would truly not have an agenda for my own kid's wants but am not interested in going that. 

I would jump at a national sales tax, even at higher than the 23%.  I can and do get by without buying much of anything new and from what all I have heard, used stuff will also be exempt. 
chaplain robert
little farm/BIG GOD

Don_Papenburg

Taxes on used stuff will be forthcoming when the politians decide that there is a market and they aren't getting  a cut of the pie.  Used will only be exempt to make it palatable to the voters .
Frick saw mill  '58   820 John Deere power. Diamond T trucks

Tom

The sales tax here in Florida has been better described as a "transaction tax".  If there is a  movement of property from one hand to the other, the State wants money.  The best thing that was done here was to exempt food and medicine.

PineNut

When a politician looks at a tax like this they will think that is great but as an ADDITIONAL tax.

Ed_K

 They will add pork to this, so heres mine"No politician will serve more than 8 yrs" if you want to serve more time it should be as an appointed posision with no pay. I see a lot of old equipment being rebuilt and put back in service.
Ed K

Mooseherder

Bureaucracy is designed to protect itself against change. ;D
The Country, States and Municipalities spend so much on administration of itself it boggles any logical thinking.  We clearly are spending to much. The IRS is collecting over 2 trillion dollars for 2006. :D  Nevermind the State and local taxes. ::)
Your point about term limits is also what needs to happen. Think of all the career politicians who have gotten us into this yet continue to hold office. There once was a time when the Country had to send representatives to Washington.(Communications)
Don't think we need them anymore. We got da internet thanks to sum smart fellow.

Frickman

I've read Neal Boortz's Fair Tax book. I'm behind it 100%. You only pay tax when you buy at retail on new stuff. It's fair for everybody. You eliminate the IRS. You might cut back on state income taxes too, as most states base their taxes on your federal reportings. As for some transactions going unreported, and thus untaxed, you will have some cheating going on in any system. You'll probably have less than with our current system.
If you're not broke down once in a while, you're not working hard enough

I'm not a hillbilly. I'm an "Appalachian American"

Retired  Conventional hand-felling logging operation with cable skidder and forwarder, Frick 01 handset sawmill

Pretend farmer when I have the time