Income tax vs Consumption tax

[KaiineTN]

Yes, a Youtube video!



Thoughts though? Would you rather have a consumption tax than an income tax, or do you think if we tried pushing for a consumption tax we'd just end up with both?

[Arlos]

I think a pure consumption tax unfairly burdens the poor. Someone losing 15% out of a 400/week paycheck is impacted FAR greater than someone losing 15% out of a 2000/week paycheck would be.

-Arlos

[Nusk]

im a fan of a graduated vat

bread veggies etc are not taxed at any rate (staples to live)

flat vat on non luxury items

higher vat on luxury items (cars over 50k, tvs over 50" etc)

this should replace income tax instead of in addition to. and people who make less then a certain amount 18k if single 24k if married or something similar can get a refund from the government.

[10sun]

Do not agree.

Only 53% of people who filed their federal income taxes last year owed anything.

[Tossica]

Do not agree.

Only 53% of people who filed their federal income taxes last year owed anything.

I rarely owe anything at the end of the year because I pay enough in throughout the year. Whether you get a refund or not is meaningless because it all depends on how much you pay in during the year.

[10sun]

Do not agree.

Only 53% of people who filed their federal income taxes last year owed anything.

I rarely owe anything at the end of the year because I pay enough in throughout the year. Whether you get a refund or not is meaningless because it all depends on how much you pay in during the year.

I meant that the 47% that owe nothing did not have any payroll withdrawals through the course of the year. They owed the government nothing.

[Tossica]

Do not agree.

Only 53% of people who filed their federal income taxes last year owed anything.

I rarely owe anything at the end of the year because I pay enough in throughout the year. Whether you get a refund or not is meaningless because it all depends on how much you pay in during the year.

I meant that the 47% that owe nothing did not have any payroll withdrawals through the course of the year. They owed the government nothing.

I don't see how that's possible. Even when I was making $3.25/hr as a kid, I still paid income tax, I just got most of it back at the end of the year.

[Arlos]

I think that's what the statistic is saying. They had the tax deducted from their paycheck like anyone else, but since more was taken out than they owed, they got it back again come refund time.

I just don't see how you can force people who are living on $8/hr and who effectively doesn't pay taxes throughout the year (cause they gets all of his income tax withholding's back) to suddenly pay what, 10-15% VAT on essentials like clothing or any other non-food item they have to buy, just so the highly well off can feel less oppressed because they have a higher percentage tax rate. Makes no sense whatsoever. Utterly ridiculous. Hate to break it to you, rich people, but you're not oppressed, despite having to pay a slightly higher tax rate.... Sorry.

-Arlos

[Tikker]

Consumption tax would probably lead to more piracy

[10sun]

I think that's what the statistic is saying. They had the tax deducted from their paycheck like anyone else, but since more was taken out than they owed, they got it back again come refund time.

I just don't see how you can force people who are living on $8/hr and who effectively doesn't pay taxes throughout the year (cause they gets all of his income tax withholding's back) to suddenly pay what, 10-15% VAT on essentials like clothing or any other non-food item they have to buy, just so the highly well off can feel less oppressed because they have a higher percentage tax rate. Makes no sense whatsoever. Utterly ridiculous. Hate to break it to you, rich people, but you're not oppressed, despite having to pay a slightly higher tax rate.... Sorry.

-Arlos

Nailed it. Except you can talk to your payroll person and opt to change the percentage of withholdings down to nothing for federal (at least all of my jobs have let me do that... better to pay to earn the interest on the money than let the government do it).

[Diekan]

A consumption tax would work great - Liberals don't like it because it doesn't support an enormous government body.

All the illegals here? Guess what... they'd actually be paying taxes on everything they bought.

As for the rich - do you really think they're going to stop living large just because the tax structure is different? Sure they end up paying the same tax percentage as everyone else - but when someone "poor" spends... 8,000 dollars on a Kia they end up paying 1200 dollars in tax - as opposed to the guy buying the 100,000 dollar M series who will be paying 15,000 in taxes.

The average American shells out roughly FIFTY percent of his/her income in taxes collectively. Sales tax, social security, medicare, federal, state - it's out of control. Our government, whether GOP or Demo, is out of control. Tax and spend, tax and spend.

We fought a war some 200 yeas ago to get out from under an overtaxing king - and here we are again.

A 15% Fair Tax is a HELL OF A LOT better than the +30% those fuckers are stealing from me and everyone else now.

[brinstar]

i'm a lib for a fair tax consumption-style; if done right the govt will have more money to get even bigger muhuhahaha

[Reynaldo]

Yeah I'd be for some version of this. I like Nusk's mods as well.

It's great because it allows for the individual to well.....BE the individual and govern themselves.

If you need to hole up for a month and eat green beans out of the can to save some extra money for something in the future you can, instead of automatically losing 20% of what you make. Then next month you'll have the extra money you need to buy that 50" TV.

Like someone said, the rich aren't impacted. What does Alex Rodriguez care if he spends 50,000 in taxes on a 300,000 car, and they'll still be footing the largest majority of the tax burden like they do now.

I just really like the idea of being able to take home the vast majority of my gross pay and doing with it as I will depending on what I need/want vs. losing 1/3 of it up front.

*edit to say that I do recognize that there would be exploits that I'm sure people would find such as internet purchases from "foreign" companies or some other way of funneling money around an American product tax that would need to be addressed.

[Arlos]

Again, as I said before, a consumption tax unfairly impacts the poor.

Someone making minimum wage is going to notice a 10-15% tax on EVERYTHING far more than someone making 500k a year will notice the exact same tax, due to the differences in absolute dollars we're discussing.

Right now, that person making minimum wage probably pays very little in federal income tax, which only makes sense, given that they're living hand to mouth as it is, most likely. Someone who is raking in money hand over fist gets taxed more, because they can afford to pay more.


Also, I have *NO* idea where all this belief that we are somehow being insanely over-taxed comes from. Our tax rate right now is one of the LOWEST this country has ever had. Take a look at this: http://www.taxfoundation.org/publications/show/151.html

Look at today's tax rate. It starts out at 10% for the lowest income, and is only 25% up to 82k a year. Even after that, it only goes to 28% up to 172k, and the VERY top end, if you rake in 375k or more is 35%.

Now, scroll way down to 1954, just to pick a year. The 1950s were the time this country was most booming, right? When everything was supposedly best in this nation? Well, just look at their tax rates. Now, we have to remember the differences in what at a dollar was worth then, given inflation over time, but just take a look at that scale. It STARTS at 20%, and rises VERY rapidly. Even people on the lower half of the scale are paying more than 50% income tax. Upper middle class people are paying 60-70%. The TOP earners are paying 91%. Yes, you read that right.

Even in 1983, under RONALD FUCKING REAGAN, the maximum tax rate was 50%, and it got there VERY quickly. All you needed to make was 55k a year in 1983 to hit that 50% tax bracket.


So, you tell me: Where the hell comes this notion that our tax rates are insanely high and out of whack, compared to the rates historically in this country? It's all perception. It has no basis in fact or reality.

-Arlos

[ClakarEQ]

It comes from folks like the Teabaggers and Reps that use fear mongering to push the agenda they want for their big corp. sponsers.

[brinstar]

It comes from folks like the Teabaggers and Reps that use fear mongering to push the agenda they want for their big corp. sponsers.

this

also i would imagine basic staples would be exempt from hypothetical consumption taxes. for example, no one should ever have to pay tax on a gallon of milk or a package of diapers

[KaiineTN]

Fear is used as a tool by people everywhere, not just in politics, and certainly not just by one political party.

[Arlos]

Fear is used as a tool by people everywhere, not just in politics, and certainly not just by one political party.

I actually don't disagree with this, but it certainly is FAR FAR more been the tool of the right for at least the last decade. That's how they sold the Iraq war and the Patriot act.

And who now is trying to sell the nonsense story that our tax rates are somehow insanely high? It's not the Left, I assure you...

-Arlos