A New Tax System

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nbcrusader

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For anyone who has done their own taxes, you know how much time is spent on this complicated process.

Yesterday, GWB opened the door to exploring a national sales tax in an effort to simplify the tax system.

Bush Says National Sales Tax Worth Considering


How would you structure a tax system?

My idea:

Flat tax on income above a minimum level (i.e., poverty level) - money used for "infrastructure" including military spending.

National Sales Tax on non-necessities - money used for social spending.

We all share in use (infrastructure). The more we consume, the more we help others.


I am undecided on Estate tax (I've considered everything from 0% to 100%)
 
From what I've read a national sales tax would have to be nearly 50% in order to be effective, so I don't think it would be a very good idea.

I like the idea of a flat tax for those above the poverty level, but I think it may be difficult to establish what really constitutes the "poverty level" given the wide range of costs of living throughout the country. What may be considered "poverty" in Orange County may be a decent living wage in Tulsa, for example.

I fully support some sort of estate tax, and I say this as someone who would have to deal with the consequences of one.
 
every attempt I have witnissed over here to simplify the tax system has resulted in it becoming more complicated to fillout tax forms

though I tend to be slightly right of centre economically
I just can't believe in a flat tax system
to insure enough income this flat tax would be too high a percentage for those just above poverty level
 
What would happen to the state sales tax systems? That would be additional?

I don't think it would be as fair as an income based system. The thrifty people would benefit and the people that already have bad spending habits will rack up more on their credit cards.
 
A_Wanderer said:
The GST here in Aus certainly had benefits over the beurocratic nightmare that we had before.


http://www.ato.gov.au/corporate/content.asp?doc=/content/tax_history.htm

I just researched this. You also have a tax system called PAYG which is based on earnings, correct?


To attempt to line this up to your tax system, I believe what Bush was starting to present was replacing PAYG with GST.

Since some of the states already collect Sales Tax, I was wondering how that tax would be replaced if the federal tax system was merged into that.

Here's an idea of how each state collects sales tax now:

http://www.taxfoundation.org/variousrates.html

It's so complicated that mail order & internet companies don't charge tax to residents that don't live in their states. You only pay sales tax if you are physically in the state that charges it. A lot of Massachusetts residents go to New Hampshire for big ticket items such as electronics, etc. so they don't have to pay the sales tax.
 
PAYG and the GST are slightly different things. Pay As You Go is like an incremental payment option throughout the financial year (I think :huh: lol). The GST is whacked on to every predetermined item the govt declares a Goods or Service.

The GST has its faults. Dont be in too much of a hurry to get it over there.
 
Salome said:
every attempt I have witnissed over here to simplify the tax system has resulted in it becoming more complicated to fillout tax forms

Actually, Reagan's tax act of 1986 greatly simplified the US tax system.

Unfortunately, there have been many additions by Congress since then - and we are back to the complicated system of old.
 
BostonAnne said:
What would happen to the state sales tax systems? That would be additional?

I don't think it would be as fair as an income based system. The thrifty people would benefit and the people that already have bad spending habits will rack up more on their credit cards.

It would likely remain as we already have two, three or more layers of taxation. If you add up income, sales, property, use, excise taxes and other fees, you will find a nice chunk of your income gone.
 
Yes. Men. Tax. :down:

Seriously the old sales tax system was even more stuffed. There used to be a tax of about 30% if memory serves me well (which normally it doesnt) on braille watches. We used to have huge books of lists of the sales tax rates for everything.

Now most things are the same flat rate which is more equitable IMHO.

Its just all the frigging paper work thats made it a nightmare.
 
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This is true. Mind you some of the old crappy sales tax rates were 50% etc (gawd this is doing my head in trying to remember :| )

We shall see what the new election term shall bring....
 
BostonAnne said:



To attempt to line this up to your tax system, I believe what Bush was starting to present was replacing PAYG with GST.


Ok, so this statement was correct. What was being presented was that our income tax (PAYG) would be replaced with a national sales tax (GST). We also already have sales tax, it varies state to state.

The proposal to me makes no sense and I'm glad it stopped before it got started.
 
Are you saying to replace income tax with GST? ie no more tax on earnings, only tax on spendings?

I actually like that idea. Penalise the spenders, not the savers. :up:

Edited to add: with exceptions for low income earners whos almost total income is spent on necessaties.
 
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I'm being awfully argumentative tonight, sorry beli, but that idea wont work for the simple fact we all match in certain basics like food etc. to penalise on spending rather than income will only widen the gap between the rich and the poor.
 
Yes, and everybody does spend, to varying degrees.

Saving money, in a financial institution/investment, is still stimulating the economy.

Salome, have we bored people to tears in every thread yet :hyper:
 
nbcrusader said:


It would likely remain as we already have two, three or more layers of taxation. If you add up income, sales, property, use, excise taxes and other fees, you will find a nice chunk of your income gone.

This is were I have a big problem with the current federal tax cuts. Due to the federal tax cuts, my state and town raised various fees to replace the lost federal support. I think pushing taxes to a local level really divides rich and poor.

When the towns loses support, the residents are left to vote for a local increase to maintain basic services - most importantly - education. The richer towns vote for overrides, pay more property taxes and services go unaffected. The poorer towns don't vote for overrides because the residents can't afford anymore. Most of the poorer residents probably didn't receive the benefit of the tax cuts anyhow. So the poorer towns lose teachers, lose special needs programs, lose music, art, sports.
I live in a median town and our education system has lost so much in the 2 years I've been here. This year a few of my friend's children have lost their special needs program. They will now be mainsteamed back into the classrooms instead of receiving the smaller class care they were getting. One student was getting A's in the program but D's in regular classrooms.

I have to pay a $250 fee for my son to ride the bus to school. We live far enough away that I don't want to worry about him walking home while I work. Spending that much money right now is really hard and I would much rather have had a small amount come out of my paycheck each week and the cost invisible to me.
 
Angela Harlem said:
I'm being awfully argumentative tonight, sorry beli, but that idea wont work for the simple fact we all match in certain basics like food etc. to penalise on spending rather than income will only widen the gap between the rich and the poor.

That what I think to Angela!
 
Salome said:
finding a fair way of taxing different income groups remains extremely difficult :hmm:

That's why there are constant changes and new forms to dish out and why it gets so complicated.

I'm glad we now have tax software to do most of the work!
 
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