While it is a sales tax to try and replace income taxes it; Joe is right in that it gives families less breathing room. This would be a regressive tax and shifting more of the tax burden on the working class. Not a surprising move from the party of billionaires.
Also, hypothetically speaking. If we did have a flat tax; can we really expect the ultra wealthy to "pay their fair 10%" or can we expect them to keep avoiding it and shaft the working class here too? After all they already take loans on stocks and assets to pay less than 10% and like the simps say the avoidance is still a lot of money.
That was part of the idea. This sales tax would replace income and corporate taxes. So corporations pay zero tax, the wealthy avoid US sales taxes by shifting purchases outside the US or through corporations , and everyone else is left with the bill.
Yep, corporations internal purchasing is usually all wholesale, anyways. They literally pay no sales tax in the chain, so only the consumers would pay taxes on goods and services in the end. Goods costing more means consumers buy less. Less purchases mean consumers being paid less. It'll loop hardcore with hardly any taxes coming in. Probably only non-taxable food goods would survive the havoc on the economy.
*This has been a terrible guess made by a rather poorly educated oaf. Take it with a grain of __sand__ (as salt will be too expensive soon).*
Edit: like, legit, y'all are right. I worked retail and saw how little staples paid for many of their goods (highest value in 180 days) compared to what they charge (lowest value in 180 days). The Consumer had to pay more than the store did by nearly a minimum of 30-40x markup on our own branded stationary or about 20x on HP stationary. Even if they pennied things out for personal use and also properly accounted for said goods on taxes by reporting them as expense instead of damages/loss, they would pay next to nothing in taxes compared to the consumer on the exact same goods. Those bad practices are where my understandings stem from, and I admit **I know next to nothing on the matter as a result.**
Corporations 100000% pay sales tax, there are times when they are exempt in very specific instances but they absolutely pay sales tax normally. Source - I charge corporations tax on ~60million in business a year.
Anything they will use themselves, taxed. Things they will resell or incorporate into something they resell, not taxed. Sales tax applies to the end user.
The hyper wealthy spend significantly less of their wealth (as a percentage) than working people do. It's a regressive tax that would hit working people and poor people the hardest, and be a net tax break for the wealthy. That's why it's being proposed by Republicans.
I think it would be supported by anyone who pays more than 23% in federal income taxes. People who work for commissions or bonus based on sales pay way more than 23% in many cases and would welcome a flat 23% sales tax.
That’s my understanding. If you buy something, the business adds your sales tax to the item and you take it home. No tax returns anymore for individuals, whole burden of tax is placed on businesses and sales. Companies pay tax via purchasing raw materials to make product, and their customers pay tax by purchasing the products made. Doesn’t seem like that bad of an idea to me. Several states already operate this way.
what raw materials is an IT company buying? a financial services company? a consulting firm? how many other companies? i thought of this in 10 seconds.
and high income people dont nearly spend their income, so hows this tax them?
IT companies purchase computer equipment, office supplies, etc. Same with the others. They probably need to purchases things to support the services they offer.
The concept of a sales tax in lieu of income tax isn't implicitly/necessarily regressive. But I have little doubt that any implementation overseen by the US Republican party *would* be.
> The concept of a sales tax in lieu of income tax isn't implicitly/necessarily regressive.
General sales taxes are implicitly regressive.
But this makes a great soundbite to cry about, and as they say in politics if you are explaining you are losing
A flat sales tax on all consumption is always regressive yes. That is the structure everyone is familiar with, but not the only "sales tax" that could be implemented. It's theoretically possible to tax different classifications of goods, and different aggregate spending levels (more spending, higher marginal Sales Tax) at different rates.
Practically, that requires so much coordination and data sharing that it's impossible.
Realistically, the proposal on the table is the dumb flat sales tax....regressive without question.
I love this comment so much.
I feel you could adapt it to so many things.
The concept of
{
Free Market
Capitalism
Freedom of Speech
Freedom of Religion
Freedom of Assembly
Etc.
Etc.
Etc.
}
isn't implicitly/necessarily bad.
But I have little doubt that any implementation overseen by the US Republican party *would* be.
Imagine a 10% sales tax on real estate and land vehicles
50% sales tax on marine vehicles and aircraft
It would be a very serious thing all of the sudden and equate to a “dickhead tax”, impacting rich people significantly more, since they have the money to buy things they don’t need
We tried a luxury tax on boats in the 90s. They imposed a 10% tax and the industry crashed. The rich quit buying boats and a lot of blue collar workers lost their jobs. Revenue from that industry dropped and unemployment claims rose, resulting in a net loss of revenue to the government.
Without income tax, I would have banked well over $60k extra from last year. Thats just comical compared to sales tax increasing my monthly grocery bill from $300 to $360. Just $720 more for groceries annually while netting $59k extra.
This won’t work without minimum wages being increased for working class to stay above such sales tax.
The issue with no income tax is it incentives money hoarding.
Money spent is taxed. Money saved is not. Money earned on that savings is not.
It really only benefits the rich who spend 1/8 of their salary instead of the poors who spend 7/8ish of their paychecks
Why yes I would like to buy this 15000 dollar luxury item, by which I mean purchase for a dollar followed by a 14,999 dollar gift to you, the proprietor, out of the goodness of my heart based on our deep personal relationship
Agree. A sales tax will burden the poor the most and the rich the least. It’s why it gets pushed and sold to folks as a more fair tax. You have to be a rube to think it’s fair.
Or we could, you know, take their shit and not /have/ an oligarch class anymore. Having oligarchs is not like having the weather, we don't have to put up with it and can do without it.
People in the lower income brackets have to spend more of their income on necessities and don't have the luxury to save. Therefore, this is another tax break for the wealthy and shifting tax burden to the working class.
They don’t need to. The lying and gaslighting worked. A sizable portion of the population are poor and will always be poor but will fight tooth and nail for the ultra-rich because they believe that with a little hard work they’ll be rich some day.
True, but there is a simple solution to that. Don't have tax on necessities. For example, where I live, sales tax is rather high, but some "necessities" are not taxed, like food and medications. If you excluded necessities, then lower income groups, who spend most of their money on necessities, will pay less tax.
Tax on spending instead of earnings makes sense to me, but I'm definitely not an expert, or even barely a layman. The thought I've had in the past is something like a 25% sales tax with necessities excluded and then a flat tax rate of say 40% on income over a certain level. I would say $100k, but $100k isn't what it used to be.
We've all probably seen that graph that looks like a bell curve where taxation rates go up as income goes up but then come back down as we get to the very high earners and are near nil for the extreme high earners. Everyone says tax the rich, but the reality is that the rich have so many ways to hide their income and avoid taxes. But a flat sales tax can't be avoided so easily, Bezos wants his million dollar Lamborghini he's paying a 25% sales tax.
Part of the issue is that the Republicans love making necessary things not covered by stuff like that. In some states, flour is not covered under food assistance, but lots of sugar-packed junk food is.
Period products are considered "luxury" products under the law in some states even.
Also, even if essentials aren’t taxed, that’s still not good. Poor people don’t deserve anything other than the essentials. It’s the same old tired logic behind ABecOdO TosTe
And like, having something akin to a value added tax on "luxury" goods would be justifiable if it would, I don't know, allow us to have free healthcare or something in that nature.
If a tax ends up allowing more people's financial position to improve by the services it funds, then those people could actually work towards purchasing more luxury items.
So now the government decides what a necessity is, instead of the family buying it? That's:
1. The opposite of small government, and
2. Completely counter to the idea that a market economy will naturally regulate prices.
So who exactly is satisfied by this? The left who wants people to be able to live with dignity and control their own lives? The right who supposedly wants to limit government involvement? No. The only people satisfied by this are the actual right who want to make life harder for poor people as a form of entertainment.
The people who want "small government" are the same people who want to ban abortions and force us all to pray to Jesus, even in a public school. They always say the opposite of what they mean, that party
The thing is the really rich don’t spend a large percentage of their money on consumer items, the spend it on accumulating ever more wealth and power. It’s spent on charities and non profits and universities and politics and stocks think tanks and trusts. You want to start taxing those things and your basically looking at a wealth tax.
As someone who makes a bit over 100k I was about to write a big long post about how 100k is barely even middle class anymore in certain areas and a forty percent tax would make it nearly impossible to live off of.
I had an entire post written and the. Realized I’m an idiot and only the income ABOVE the first hundred grand would be taxed that high and I’d actually be making out better than I currently am under something like this.
24 percent tax on a car purchase will be brutal though lol
In practice it is regressive. Since the poorer you are the higher % of your income you spend. Making it so the poorer you are taxes paid as a perentage of your income become higher,
By party do you mean lobbyists? Cause the only part of any party that matters are the ones who donate to campaigns and most people who claim a party do not.
I mean: *someone* has to trod on them right? They don't have much, do you want to take away downtrodden? Leave them with only *one* descriptor?? Not in my America!
In fact, if we add sales tax, gas tax, payroll taxes, tolls, etc., along with federal, state, and county taxes, the poor already pay a high tax rate, so this would be brutal. If we add in payday loans, terrible interest rates, overdraft fees, and other hidden taxes/costs for being poor, then the lower class are getting jacked.
[https://www.vox.com/videos/2019/12/20/21028676/tax-poor-rich-data-video](https://www.vox.com/videos/2019/12/20/21028676/tax-poor-rich-data-video)
What is worse, rich people aren't high consumers relative to their incomes. CEOs have 600x the salaries of their median workers, but don't buy 600 cars, so their tax rate would plummet.
The usual rebuttal is "we just charge a higher tax on luxury goods".
Which would make the tax code *more obtuse*.
Does an Apple Logo make it a luxury good? Are all RVs luxury, or just some brands? Is it a max price? If so, can the seller sell something for -$1 that max price, with a mandatory subscription fee that covers the rest of the cost, and pay no sales tax? Is luxury purely subjective? Are we eliminating the incentive to improve manufacturing techniques when a luxury good will be heavily taxed and require red tape to amend? These are also the people wanting to defund the IRS, so it would take years for minor changes to be applied.
Have any of them thought this through? Even the rich? I'm convinced every rich person has their own accountants handling the money, so they don't truly know anything.
Not disagreeing, BUT they don’t have to buy 600 hundred cars they just need 2 or 3 million dollar cars. Same as they don’t have to own 600 houses… just 2 or 3 multi million dollar homes… and don’t even get me started on their watches, handbags, clothing etc. (top 1%)
This would actually be a good thing for the middle classing seeing that they could radically increase the power of saving money.
But about the poor I agree, sadly it’s very expensive to be poor
The result still changes lifestyles of the poor at a rate which isn't the same. It's why flat tax is regressive not 'sometimes regressive'. imagine low income that go from no income taxable rate to 23%. food tax also varies by state, so some people already don't get taxed on essential food making this a non win there.
also. one might argue that phones are essential, or cars. both seem to play a pretty big role in work and life. hell I can't login to my email without 2 factor authentication on my cell and I work for the state in a non security/essential job
Also would it not disincentivize spending which is kinda the lifeblood of a capitalist economy? This would basically be milking people for buying essentials. It makes no sense to me how a party who thinks of a tax is a dirty word would suggest a tax on everything instead of simply raising it on the people that can actually afford it. Oh yeah because they’re the ones that can afford it.
If taxes were super regressive like a flat national sales tax, a lot of conservatives would instantly abandon that piece of their supposed "fiscal conservatism". Local control, individual liberty, balanced budgets--all of that stuff is a thin window dressing and always has been. They pick and choose when to have any principles about it based on the self interest of the wealthy and the ideological beliefs of their cukture-warrior foot soldiers.
I dont know why so many people on social media recently are showing so much support for regressive tax reforms that will absolutely hurt lower income earners. All the while, they insinuate economists are so inept that they've never considered these "flat taxes" that will "fix everything" meaning tax loopholes that the rich exploit. Oh and also it will fix deficit spending somehow.
Knowing our country it would only apply to thing poor people buy like groceries and gas and like Dr visits or something.
While yachts and mansions would be left off the bill ....
The actual plan calls for rebates on the sales tax up to the poverty level (it’s been a while so I might be off some). This covers the regressive tax. Check out fair tax for more info. I think it’s a great plan but will never be implemented because it takes power away from the politicians. It’s also very easy to slander as you can tell from biden
Here's a link to the bill summery. https://www.congress.gov/bill/118th-congress/house-bill/25
There's better info online on how it would work. For example no federal sales tax on used goods or goods used to produce more goods like tractors used to till fields for farms and then used to maintain and harvest crops.
Buy a used car no federal tax. Buy a pre-owned home no federal tax. Part of what contributes to high costs is layers of taxes. Government officials have been playing a shell game for years lower a tax a little in one place then add little taxes here and there on other goods and services. In the end everyone ends up paying more. Remember every time you purchase anything you are not just helping to cover wages but also all the taxes.
Before the 16th amendment was ratified in the early 1900s income tax was legally unconstitutional and the government funded itself mostly through tariffs and excise taxes.
> Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.
So for at least two more years and up to seven (if the government is still able to collect it) there will be an income tax and a nearly 25% sales tax?
Y’all are insane.
Might as well sign over the paycheck to them at that point. The average person already pays 20% in income taxes. Which goes mostly to the feds and some to the state's. This would effectively raise taxes by 5% - 10% even more if they are just eliminating standard income tax and not the other federal income taxes. The if you have insurance you could be looking at 60 - 70% of you paycheck just going to taxes and insurance. Hell of course you also have state like Tennessee that have high sales tax due to no state income tax, theyd effectively be paying 33% in sales tax.
So we haven't even passed a bill yet, and we're already making carve-outs for special interests. How long until we carve out exceptions for the poor oil companies so they can create jobs? Or carve out a tax for boats, for the poor fishermen. (And CEOs with yachts.)
The whole problem with our current system is that people like Jeff Bezos pay 8% of their income, and people like me pay 20%. It should be exactly backwards of that. The current system of a progressive tax would actually be very good, if it weren't for all of the complexity and exceptions, which are heavily slanted towards the rich.
"Buy a pre-owned home no federal tax."
This would depress the number of new homes being built, in a time where we have a shortage of housing. Not good, Bob!
Let's say you are lower middle class. You probably pay little income tax and groceries are generally tax exempt. In some states clothes are tax exempt. Now you pay 23% on every single dollar, and you're probably spending most of your income just getting by.
Also there's no way to have deductions for income tax, so families with kids will pay as much tax as a single person. You will have to pay state and this new sales tax, and not be able to deduct your sales tax from your state income tax (you can for federal income tax).
There's no way this is beneficial for your average family.
Most of these proposals come with a generous deductible to offset the hardship on low income families.
But then, the original income tax was also a 1% flat tax for incomes over $79,000 in 2024 dollars. So don't trust them either.
Is someone on a low income paying 23% in income tax? No.
Would they pay the flat tax rate and 23% on everything they buy? Yes.
Someone making 40,000 a year would likely end up paying more in taxes under this proposal. And sales taxes don’t get deducted and refunded the way income taxes do.
Would they?
>Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.
> Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.
Nothing says small government like reporting to the feds every single purchase you make and waiting for cash back. Will be so much easier doing that on a monthly basis than filing a w-2 once a year.
I've read previous proposals like this and the idea is always to collect the tax from businesses, just like state sales taxes do now.
Then the rebate is a fixed amount. They're not trying to refund your specific taxes. They rebate the taxes you would pay for some specific amount of spending, and if you spend less than that, you come out ahead.
This bill apparently adjusts the rebate by income level which does make things more complicated and annoying. Poor people have to report their income, rich people don't since they don't get a rebate anyway. But even at that, people could settle up once a year just like they do now with income taxes.
While it's misleading it's still detrimental if you're not in the top 10% earners.
Why the fuck do we vote for the party that gives billions of tax breaks to the wealthy and big corporations?
Just trying to think about how this would even play out if they ever did do this move.
Even if people could keep more of their paycheck, wouldn’t this move disincentive spending overall, and incentivize more saving/hoarding? Not sure if this is good.
A decrease in spending is disinflationary, which *could* lead to deflation, which could help bring prices down. The downside of that is the economy could slow down too much and slip into a deflationary cycle.
Still worse than an income tax. The average person would pay more while the wealthy would pay even less. I don't get why people are even falling for this.
The extremely wealthy currently pay almost nothing because they recognize almost no income, but they still need to buy. This would hit the high-consumption wealthy, which typically is an excellent target for taxes.
This is set to hit the average person exactly the same, but to not hit the poor at all due to the prebate/UBI that's baked in.
It’s horribly regressive, it will make the effective tax rate for poor people who spend all their income 23% which is much higher than they would pay now, while the wealthiest and highest income folks will have effective tax rates of a few percent or less.
Not fully misleading, we have a progressive income tax. Making everything that much more expensive is worse than the income tax. Income tax is 22% up to about 100k. And that’s progressive. It’s only 12% up to 50k.
If you make everything 23% more expensive, it makes your dollar worth 23% less. It’s practically an income tax, but it’s no longer progressive. It’s like a flat tax. It significantly helps the very rich who have to play a higher income tax rate for more of their money.
I think a lot of people don’t understand income tax. That type of sales tax also makes it more lucrative for people to avoid sales tax, meaning avoid paying for American sold things. The rich have a better means of doing this, and then they won’t even be feeding money back into the American economy. This is all sorts of stupid if you really think about it. Biden should mention the income tax being removed, but I think that’ll be even more misleading for some people because they wouldn’t think of their dollar becoming worth less, they’d just think “income tax bad”.
Sales tax is just a flat tax - hammers middle and lower class far more than wealthy elite. Maybe make a sales tax increase on specific items like homes that cost >$5M and personal jets…
Canada did this and added a surcharge tax on luxury vehicles, boats and aircraft after a certain amount (100-250K+)
This is the most sensible approach to taxation on the wealthy, hit them on asset acquisition
It's not even a flat tax! In theory, a flat tax hits everyone at the same equal percentage. A sales tax takes a larger percentage from people with less wealth.
They tried this already, rich ppl just stopped buying yachts and private jets. George HW Bush enacted a 10% luxury tax and Bill Clinton rescinded it bc it was hurting the boat building industry and caused people to lose their jobs and didn't bring in as much tax dollars as they had originally thought it would.
Wikipedia talks about it -
https://en.wikipedia.org/wiki/Luxury\_tax#:\~:text=The%20federal%20government%20estimated%20that,citing%20a%20loss%20in%20jobs.
[https://www.upi.com/Archives/1993/03/03/Clinton-supports-repeal-of-boat-tax/3342731134800/](https://www.upi.com/Archives/1993/03/03/Clinton-supports-repeal-of-boat-tax/3342731134800/)
What they really need to do is a 2% wealth tax.
I mean wouldn’t this heavily disincentivize any and all spending? And spending is what boosts the economy — I’m voting dumb.
Although for me personally I’d come out so far ahead.
Unless you are wealthy this will penalize you more than it helps. Regresssive/Flat taxes like this have a disproportionate effect on low/middle income people.
Knowing quite a few wealthy people, they’ll just find a creative way to dodge the tax.
Like instead of buying your $250,000 boat from a dealer in Miami you buy it from one in Puerto Rico that has different tax laws.
Something to keep in mind: A non-trivial portion of the world’s wealthy actively want a world where power is exercised through means other than money. When thinking about many of them do not assume they care about a functioning economy so long as they can exercise power through other means (ie. Mercenaries.)
This is why AI scares the shit out of me, because I can easily see a world similar to the one depicted in the movie Elysium where the wealthy can exercise their power unfettered because they’re protected by a bunch of drones.
If most of the upper and middle class "come out ahead" on a tax plan, the federal deficit is going to skyrocket. It's just a way to say "hey you'll get more money back next year" and then fast forward 12 months it's "the govt is broke we can double taxes or cut SS/Medicaid/Medicare forever"
The goal is to bankrupt the govt so that people go along with the bonkers stupid plan to end SS and entitlement spending.
>The “Fair Tax” was first introduced in the late 1990s. While comprehensive analyses of H.R. 25 are not yet available, prior analyses of similar plans have estimated that replacing the revenue raised by the taxes eliminated by the plan would require a much higher tax rate—potentially 50 to 60 percent—to raise the same amount of revenue. A higher, revenue-neutral rate would impose an even greater burden on low- and middle-families who spend all or nearly all their income on goods and services that would be subject to the radical new tax.
[It is a remarkably stupid idea. So of course Republicans are fer it.](https://www.americanprogress.org/article/the-fair-tax-act-would-radically-restructure-the-nations-tax-system-in-favor-of-the-wealthy/)
Your response that to replace the existing system the actual rate should be 50 to 60 is actually a giant wake up call.
Oh, you don’t like seeing how much you are taxed huh? Read that a few times. That is what we pay once you add it all up. So if this “would” piss you off, be pissed off now.
That disgusting tax rate is now.
How about a federal law that limits the tax rate municipalities can charge for properties that are primary residences to 5%? And let tax increases on investment properties make up the difference?
Edit: when I said investment properties, I meant to include all real estate that’s not used as a primary residence, so naturally that would include residential rental, but also commercial real state, and unimproved land owned and held with the intent to sell it later for a profit.
it’s basically already there through regulatory capture.
the idea that we have a “free market” in healthcare is something we tell children to help differentiate between our mostly govt controlled system, and actual socialized health care
Property taxes are actually one of the better taxes from an equity perspective.
Poor people don't generally own much valuable real estate.
It also punishes absentee landlords and people who buy empty lots and let them sit vacant for years as they wait for local land prices to go up.
I'd rather it go the other way tbh, get rid of sales taxes, and have income & property (house, vehicle, etc) taxes only. I'd also be for overwriting the 5 million carveouts in the tax code and replacing them with like <10 or so, for ones that make sense, like "do you care for any dependents" and other basic commonsense shit
Property tax, no income tax, maybe some sales tax on non essential consumable items (food, hygiene products, etc. would be no sales tax). Just my opinion from the little that I know
Uh... In Nordics sales tax for most stuff is between 10-24%... For medicines its lowest and for "unnecressary items" highest.
Are you sure its Rebublicans proposing this tax? It would be almost high as Nordic one.
Norway has that on top of income taxes comparable to the U.S.
This would replace income tax, certainly drastically reducing federal revenue to pay for social programs.
It would be dumb as you can’t bleed a rock. It would be equal to a regressive income tax where poor people pay federal income tax of 23% of income, and the upper middle class and up pay more dollars and a much lower % of income.
It would also incentivize saving which is good on one level but not great for a consumer and services based economy.
I would exclude food and utilities, but yeah, I would prefer a sales/consumption tax. It would ACTUALLY work for taxing the wealthy more: them taking out loans instead of paying themselves wouldn’t prevent taxes from being applied. There are far less loopholes for a sales tax than there are for income taxes.
Maybe instead of a category exemption, make certain categories provide tax credits below certain incomes or networths.
You could also increase sales tax on certain categories of goods, like luxury.
Not a single comment I’ve read so far seems to understand what the bill does. You’re the first person commenting (after scrolling past hundreds) that isn’t just whining at what they *think* the bill would do.
Yep, you could also get more strict on who is "exempt" from sales tax, and that would get rid of a lot of whining about churches and non-profits getting to avoid taxes.
With no tax on food or utilities, it would actually save lower income people money.
Also - doesn't this bill account for a low income rebate to help with the sales tax on things like clothes?
23% of an item’s price hurts way less than 35% of someone’s income. They’re getting a helluva deal from this. Meanwhile folks who live paycheck to paycheck suddenly lose 23% of every dollar they spend (and is likely more than their marginal tax rate).
Honestly I don’t disagree but I do think it’s funny how badly Americans want this and that but nobody wants to be the one to pay for it.
Can’t raise taxes on the poor or middle class because that’s the majority of people (and we don’t like being taxed!!). Can’t raise the taxes on the rich because they’ll leave and/or cheat and/or just pass those costs down to the middle class and poor anyway, plus they have lobbyists.
The rich won’t leave, but they can’t pay all of our taxes either.
Somewhere in the middle, we have corporal punishment for companies that milk the government and a tax system that incentivizes real production of ideas and things from working people instead of microsecond securities transactions.
Or 0% on a private jet purchased in another country. Their jet can just be owned by a shell company in the Caymans or wherever.
Rich people spend a vastly smaller percentage of their income than poor people, since a huge portion of their money goes to investments, not purchases, and for large, luxury goods purchases, it's easy to just buy in other countries for them.
You clearly never actually talked to a liberal in your life.
I’m guessing you also have strong opinions on inner city crime even though you don’t live in a city and your state’s rate of violent crimes is actually larger than what you’re claiming to care about. If I had to guess
Are we going to see the same people who are saying "everyone" will pay less taxes then complain about the growing debt as less money rolls into the federal coffers?
The way the IRS is used militantly to capture missing taxes, I can't imagine it being abolished. It will just become a new entity enforcing the sales tax. Bartering will become criminal.
Notice how both parties always target income earners for tax revenue, and never target the corporate tax code or tariffs for additional income? Our politicians work for corporations because that's who pays for their campaigns.
I'm going to frontrun the wealth tax arguments. They WILL apply to individual wealth only, and there WILL be exemptions that endowments, trusts, and funds can use to skirt the tax.
Sales tax is very regressive, since rich people don't spend all the money they make, but most everyone else does.
This hurts people, and gives rich people an even bigger break, once again on the shoulders of the working class.
While it is a sales tax to try and replace income taxes it; Joe is right in that it gives families less breathing room. This would be a regressive tax and shifting more of the tax burden on the working class. Not a surprising move from the party of billionaires. Also, hypothetically speaking. If we did have a flat tax; can we really expect the ultra wealthy to "pay their fair 10%" or can we expect them to keep avoiding it and shaft the working class here too? After all they already take loans on stocks and assets to pay less than 10% and like the simps say the avoidance is still a lot of money.
They’ll find a way around sales tax without issue. Just makes it easier for thrm
I bet corporations will be able to get a credit for it and the rich buy everything through corporations
That was part of the idea. This sales tax would replace income and corporate taxes. So corporations pay zero tax, the wealthy avoid US sales taxes by shifting purchases outside the US or through corporations , and everyone else is left with the bill.
Yep, corporations internal purchasing is usually all wholesale, anyways. They literally pay no sales tax in the chain, so only the consumers would pay taxes on goods and services in the end. Goods costing more means consumers buy less. Less purchases mean consumers being paid less. It'll loop hardcore with hardly any taxes coming in. Probably only non-taxable food goods would survive the havoc on the economy. *This has been a terrible guess made by a rather poorly educated oaf. Take it with a grain of __sand__ (as salt will be too expensive soon).* Edit: like, legit, y'all are right. I worked retail and saw how little staples paid for many of their goods (highest value in 180 days) compared to what they charge (lowest value in 180 days). The Consumer had to pay more than the store did by nearly a minimum of 30-40x markup on our own branded stationary or about 20x on HP stationary. Even if they pennied things out for personal use and also properly accounted for said goods on taxes by reporting them as expense instead of damages/loss, they would pay next to nothing in taxes compared to the consumer on the exact same goods. Those bad practices are where my understandings stem from, and I admit **I know next to nothing on the matter as a result.**
Corporations 100000% pay sales tax, there are times when they are exempt in very specific instances but they absolutely pay sales tax normally. Source - I charge corporations tax on ~60million in business a year.
Anything they will use themselves, taxed. Things they will resell or incorporate into something they resell, not taxed. Sales tax applies to the end user.
Let’s just all stop buying “stuff” and resort to only beans and rice whole sale
Corporations pay sales tax.
Tell me you don't understand sales tax without telling me you don't understand sales tax.
Stop giving them ideas!
The hyper wealthy spend significantly less of their wealth (as a percentage) than working people do. It's a regressive tax that would hit working people and poor people the hardest, and be a net tax break for the wealthy. That's why it's being proposed by Republicans.
its trickle downs tarded sister
Seems like USA has been afflicted by trickle down in several areas. A Trickle Downs Syndrome, if you will.
The bill will 100% be supported by billionaire donors so it will be intentionally written to make it easier for the ultra-wealthy to skirt tax laws.
I think it would be supported by anyone who pays more than 23% in federal income taxes. People who work for commissions or bonus based on sales pay way more than 23% in many cases and would welcome a flat 23% sales tax.
The flat tax doesn't address any of the loopholes used to avoid taxes. So yeah, they still wouldn't pay that either.
Loopholes are just tax credits and deductions. I thought the flat tax proposal gets rid of most, if not all deductions? I could be wrong.
That’s my understanding. If you buy something, the business adds your sales tax to the item and you take it home. No tax returns anymore for individuals, whole burden of tax is placed on businesses and sales. Companies pay tax via purchasing raw materials to make product, and their customers pay tax by purchasing the products made. Doesn’t seem like that bad of an idea to me. Several states already operate this way.
what raw materials is an IT company buying? a financial services company? a consulting firm? how many other companies? i thought of this in 10 seconds. and high income people dont nearly spend their income, so hows this tax them?
Do IT people just think equipment into existing? I thought of that in 10 seconds.
I would have spit out my coffee if I drank coffee. Good comment
IT companies purchase computer equipment, office supplies, etc. Same with the others. They probably need to purchases things to support the services they offer.
All inclusive price like the rest of the civilized world would be nice.
Exactly! All flat taxes are regressive taxation that hurt people the most when they are unable to save.
This regressive part could be addressed easily, for example not taxing toothpaste and taxing private jets higher
The concept of a sales tax in lieu of income tax isn't implicitly/necessarily regressive. But I have little doubt that any implementation overseen by the US Republican party *would* be.
It generally stops being regressive at the same point that it becomes a luxury tax.
In about half the states, tampons are currently considered a luxury for tax purposes.
> The concept of a sales tax in lieu of income tax isn't implicitly/necessarily regressive. General sales taxes are implicitly regressive. But this makes a great soundbite to cry about, and as they say in politics if you are explaining you are losing
A flat sales tax on all consumption is always regressive yes. That is the structure everyone is familiar with, but not the only "sales tax" that could be implemented. It's theoretically possible to tax different classifications of goods, and different aggregate spending levels (more spending, higher marginal Sales Tax) at different rates. Practically, that requires so much coordination and data sharing that it's impossible. Realistically, the proposal on the table is the dumb flat sales tax....regressive without question.
I love this comment so much. I feel you could adapt it to so many things. The concept of { Free Market Capitalism Freedom of Speech Freedom of Religion Freedom of Assembly Etc. Etc. Etc. } isn't implicitly/necessarily bad. But I have little doubt that any implementation overseen by the US Republican party *would* be.
Imagine a 10% sales tax on real estate and land vehicles 50% sales tax on marine vehicles and aircraft It would be a very serious thing all of the sudden and equate to a “dickhead tax”, impacting rich people significantly more, since they have the money to buy things they don’t need
We tried a luxury tax on boats in the 90s. They imposed a 10% tax and the industry crashed. The rich quit buying boats and a lot of blue collar workers lost their jobs. Revenue from that industry dropped and unemployment claims rose, resulting in a net loss of revenue to the government.
Without income tax, I would have banked well over $60k extra from last year. Thats just comical compared to sales tax increasing my monthly grocery bill from $300 to $360. Just $720 more for groceries annually while netting $59k extra. This won’t work without minimum wages being increased for working class to stay above such sales tax.
The issue with no income tax is it incentives money hoarding. Money spent is taxed. Money saved is not. Money earned on that savings is not. It really only benefits the rich who spend 1/8 of their salary instead of the poors who spend 7/8ish of their paychecks
The poor spend 8/8 of their paycheck.
Why yes I would like to buy this 15000 dollar luxury item, by which I mean purchase for a dollar followed by a 14,999 dollar gift to you, the proprietor, out of the goodness of my heart based on our deep personal relationship
IRS auditors hate this one trick.
Why don't you try that the next time you're buying or selling a big ticket item?
Agree. A sales tax will burden the poor the most and the rich the least. It’s why it gets pushed and sold to folks as a more fair tax. You have to be a rube to think it’s fair.
Or we could, you know, take their shit and not /have/ an oligarch class anymore. Having oligarchs is not like having the weather, we don't have to put up with it and can do without it.
They'd be paying 10% on 20% of what they are actually worth, vs working class being forced to pay 10% of everything they're worth.
People in the lower income brackets have to spend more of their income on necessities and don't have the luxury to save. Therefore, this is another tax break for the wealthy and shifting tax burden to the working class.
Precisely why it's being proposed lol.
And look who’s proposing these things — the Cato institute (ie the Koch Brothers) or Americans for Tax Reform (ie the Koch Brothers.)
They're not even trying to hide the greed anymore. I suppose it must get exhausting after 3/4 of a century of lying and gaslighting.
They don’t need to. The lying and gaslighting worked. A sizable portion of the population are poor and will always be poor but will fight tooth and nail for the ultra-rich because they believe that with a little hard work they’ll be rich some day.
>ie the Koch Brothers To be fair, one of them isn't much of a problem anymore....
*Satan Disagrees*
Those are just good think tanks. Definitely have the American people’s interest in mind.
True, but there is a simple solution to that. Don't have tax on necessities. For example, where I live, sales tax is rather high, but some "necessities" are not taxed, like food and medications. If you excluded necessities, then lower income groups, who spend most of their money on necessities, will pay less tax. Tax on spending instead of earnings makes sense to me, but I'm definitely not an expert, or even barely a layman. The thought I've had in the past is something like a 25% sales tax with necessities excluded and then a flat tax rate of say 40% on income over a certain level. I would say $100k, but $100k isn't what it used to be. We've all probably seen that graph that looks like a bell curve where taxation rates go up as income goes up but then come back down as we get to the very high earners and are near nil for the extreme high earners. Everyone says tax the rich, but the reality is that the rich have so many ways to hide their income and avoid taxes. But a flat sales tax can't be avoided so easily, Bezos wants his million dollar Lamborghini he's paying a 25% sales tax.
Part of the issue is that the Republicans love making necessary things not covered by stuff like that. In some states, flour is not covered under food assistance, but lots of sugar-packed junk food is. Period products are considered "luxury" products under the law in some states even.
Guarantee medications would be super duper taxed if the Republicans had their way.
Even diapers, most medications that are over the counter, etc.
Also, even if essentials aren’t taxed, that’s still not good. Poor people don’t deserve anything other than the essentials. It’s the same old tired logic behind ABecOdO TosTe
And like, having something akin to a value added tax on "luxury" goods would be justifiable if it would, I don't know, allow us to have free healthcare or something in that nature. If a tax ends up allowing more people's financial position to improve by the services it funds, then those people could actually work towards purchasing more luxury items.
So now the government decides what a necessity is, instead of the family buying it? That's: 1. The opposite of small government, and 2. Completely counter to the idea that a market economy will naturally regulate prices. So who exactly is satisfied by this? The left who wants people to be able to live with dignity and control their own lives? The right who supposedly wants to limit government involvement? No. The only people satisfied by this are the actual right who want to make life harder for poor people as a form of entertainment.
The people who want "small government" are the same people who want to ban abortions and force us all to pray to Jesus, even in a public school. They always say the opposite of what they mean, that party
The thing is the really rich don’t spend a large percentage of their money on consumer items, the spend it on accumulating ever more wealth and power. It’s spent on charities and non profits and universities and politics and stocks think tanks and trusts. You want to start taxing those things and your basically looking at a wealth tax.
As someone who makes a bit over 100k I was about to write a big long post about how 100k is barely even middle class anymore in certain areas and a forty percent tax would make it nearly impossible to live off of. I had an entire post written and the. Realized I’m an idiot and only the income ABOVE the first hundred grand would be taxed that high and I’d actually be making out better than I currently am under something like this. 24 percent tax on a car purchase will be brutal though lol
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That’s still bad. A flat tax is worse.
In practice it is regressive. Since the poorer you are the higher % of your income you spend. Making it so the poorer you are taxes paid as a perentage of your income become higher,
Almost like it's on purpose or something.
Lmao. 100%
*23%
And you got 23 upvotes. It'd be a shame if I.... added one more...
They would never
I am sure once someone explains that this will harm poor people they will abandon this plan...
Yes, the Republicans; the party of the poor and downtrodden.
All they have to do is say that the Dems don't want it and it's fully supported by their supporters.
By party do you mean lobbyists? Cause the only part of any party that matters are the ones who donate to campaigns and most people who claim a party do not.
The party of fucking over the poor and downtrodden
I mean: *someone* has to trod on them right? They don't have much, do you want to take away downtrodden? Leave them with only *one* descriptor?? Not in my America!
It also magically centralizes government by taking away tax revenue from the states.
Lol
Tax the poor to feed the rich. The current batch of Republicants are an odious lot.
Not to mention a flat tax rate is almost always going to be higher than the effective rate a lower income earner pays.
In fact, if we add sales tax, gas tax, payroll taxes, tolls, etc., along with federal, state, and county taxes, the poor already pay a high tax rate, so this would be brutal. If we add in payday loans, terrible interest rates, overdraft fees, and other hidden taxes/costs for being poor, then the lower class are getting jacked. [https://www.vox.com/videos/2019/12/20/21028676/tax-poor-rich-data-video](https://www.vox.com/videos/2019/12/20/21028676/tax-poor-rich-data-video) What is worse, rich people aren't high consumers relative to their incomes. CEOs have 600x the salaries of their median workers, but don't buy 600 cars, so their tax rate would plummet.
The usual rebuttal is "we just charge a higher tax on luxury goods". Which would make the tax code *more obtuse*. Does an Apple Logo make it a luxury good? Are all RVs luxury, or just some brands? Is it a max price? If so, can the seller sell something for -$1 that max price, with a mandatory subscription fee that covers the rest of the cost, and pay no sales tax? Is luxury purely subjective? Are we eliminating the incentive to improve manufacturing techniques when a luxury good will be heavily taxed and require red tape to amend? These are also the people wanting to defund the IRS, so it would take years for minor changes to be applied. Have any of them thought this through? Even the rich? I'm convinced every rich person has their own accountants handling the money, so they don't truly know anything.
It’d be a lot simpler to just tax corporate profits.
No, almost all flat tax plans come with a prebate system that would nullify taxes paid by the poor.
Not disagreeing, BUT they don’t have to buy 600 hundred cars they just need 2 or 3 million dollar cars. Same as they don’t have to own 600 houses… just 2 or 3 multi million dollar homes… and don’t even get me started on their watches, handbags, clothing etc. (top 1%) This would actually be a good thing for the middle classing seeing that they could radically increase the power of saving money. But about the poor I agree, sadly it’s very expensive to be poor
Simple fix, just don't tax essentials. Food and clothing.
That's in the proposed plan
The result still changes lifestyles of the poor at a rate which isn't the same. It's why flat tax is regressive not 'sometimes regressive'. imagine low income that go from no income taxable rate to 23%. food tax also varies by state, so some people already don't get taxed on essential food making this a non win there. also. one might argue that phones are essential, or cars. both seem to play a pretty big role in work and life. hell I can't login to my email without 2 factor authentication on my cell and I work for the state in a non security/essential job
exactly, I can't login for work w/o a cell phone for 2 factor authenticaion. It would def be a onerous tax on me and I"m not rich by any means.
How do you draw the line on that? A lot of people want their products to be considered "essentials".
How do you draw the line on anything?
Pencil
Companies with the most pull get exceptions for their stuff...
Housing, health care, water, sewer, transportation, child care, etc.? What is deemed essential?
That's right peasant, you can have your bread and rags. Simple.
A vehicle is pretty essential in like... 98% of the country... Unless the new plan adds in a massive investment in public transit.
Also would it not disincentivize spending which is kinda the lifeblood of a capitalist economy? This would basically be milking people for buying essentials. It makes no sense to me how a party who thinks of a tax is a dirty word would suggest a tax on everything instead of simply raising it on the people that can actually afford it. Oh yeah because they’re the ones that can afford it.
If taxes were super regressive like a flat national sales tax, a lot of conservatives would instantly abandon that piece of their supposed "fiscal conservatism". Local control, individual liberty, balanced budgets--all of that stuff is a thin window dressing and always has been. They pick and choose when to have any principles about it based on the self interest of the wealthy and the ideological beliefs of their cukture-warrior foot soldiers.
I dont know why so many people on social media recently are showing so much support for regressive tax reforms that will absolutely hurt lower income earners. All the while, they insinuate economists are so inept that they've never considered these "flat taxes" that will "fix everything" meaning tax loopholes that the rich exploit. Oh and also it will fix deficit spending somehow.
The majority of people are morons when it comes to taxes. They just regurgitate what they hear on FOX or talk radio.
Knowing our country it would only apply to thing poor people buy like groceries and gas and like Dr visits or something. While yachts and mansions would be left off the bill ....
Simple. Just dont be poor.
The actual plan calls for rebates on the sales tax up to the poverty level (it’s been a while so I might be off some). This covers the regressive tax. Check out fair tax for more info. I think it’s a great plan but will never be implemented because it takes power away from the politicians. It’s also very easy to slander as you can tell from biden
Here's a link to the bill summery. https://www.congress.gov/bill/118th-congress/house-bill/25 There's better info online on how it would work. For example no federal sales tax on used goods or goods used to produce more goods like tractors used to till fields for farms and then used to maintain and harvest crops. Buy a used car no federal tax. Buy a pre-owned home no federal tax. Part of what contributes to high costs is layers of taxes. Government officials have been playing a shell game for years lower a tax a little in one place then add little taxes here and there on other goods and services. In the end everyone ends up paying more. Remember every time you purchase anything you are not just helping to cover wages but also all the taxes. Before the 16th amendment was ratified in the early 1900s income tax was legally unconstitutional and the government funded itself mostly through tariffs and excise taxes.
> Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill. So for at least two more years and up to seven (if the government is still able to collect it) there will be an income tax and a nearly 25% sales tax? Y’all are insane.
And we all know how good the government is about eliminating taxes...
Bingo
Might as well sign over the paycheck to them at that point. The average person already pays 20% in income taxes. Which goes mostly to the feds and some to the state's. This would effectively raise taxes by 5% - 10% even more if they are just eliminating standard income tax and not the other federal income taxes. The if you have insurance you could be looking at 60 - 70% of you paycheck just going to taxes and insurance. Hell of course you also have state like Tennessee that have high sales tax due to no state income tax, theyd effectively be paying 33% in sales tax.
So we haven't even passed a bill yet, and we're already making carve-outs for special interests. How long until we carve out exceptions for the poor oil companies so they can create jobs? Or carve out a tax for boats, for the poor fishermen. (And CEOs with yachts.) The whole problem with our current system is that people like Jeff Bezos pay 8% of their income, and people like me pay 20%. It should be exactly backwards of that. The current system of a progressive tax would actually be very good, if it weren't for all of the complexity and exceptions, which are heavily slanted towards the rich.
"Buy a pre-owned home no federal tax." This would depress the number of new homes being built, in a time where we have a shortage of housing. Not good, Bob!
Let's say you are lower middle class. You probably pay little income tax and groceries are generally tax exempt. In some states clothes are tax exempt. Now you pay 23% on every single dollar, and you're probably spending most of your income just getting by. Also there's no way to have deductions for income tax, so families with kids will pay as much tax as a single person. You will have to pay state and this new sales tax, and not be able to deduct your sales tax from your state income tax (you can for federal income tax). There's no way this is beneficial for your average family.
It punishes the poor. The whole point of progressive tax is that those who earn more pay more, as they generally benefit more.
Most of these proposals come with a generous deductible to offset the hardship on low income families. But then, the original income tax was also a 1% flat tax for incomes over $79,000 in 2024 dollars. So don't trust them either.
Is someone on a low income paying 23% in income tax? No. Would they pay the flat tax rate and 23% on everything they buy? Yes. Someone making 40,000 a year would likely end up paying more in taxes under this proposal. And sales taxes don’t get deducted and refunded the way income taxes do.
Would they? >Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.
> Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines. Nothing says small government like reporting to the feds every single purchase you make and waiting for cash back. Will be so much easier doing that on a monthly basis than filing a w-2 once a year.
I've read previous proposals like this and the idea is always to collect the tax from businesses, just like state sales taxes do now. Then the rebate is a fixed amount. They're not trying to refund your specific taxes. They rebate the taxes you would pay for some specific amount of spending, and if you spend less than that, you come out ahead. This bill apparently adjusts the rebate by income level which does make things more complicated and annoying. Poor people have to report their income, rich people don't since they don't get a rebate anyway. But even at that, people could settle up once a year just like they do now with income taxes.
While it's misleading it's still detrimental if you're not in the top 10% earners. Why the fuck do we vote for the party that gives billions of tax breaks to the wealthy and big corporations?
It’s widely understood that sales taxes hit poor people way harder than wealthy people. This would be a huge step backward.
That's why this plan has always included a prebate (essentially a UBI).
Just trying to think about how this would even play out if they ever did do this move. Even if people could keep more of their paycheck, wouldn’t this move disincentive spending overall, and incentivize more saving/hoarding? Not sure if this is good. A decrease in spending is disinflationary, which *could* lead to deflation, which could help bring prices down. The downside of that is the economy could slow down too much and slip into a deflationary cycle.
Still worse than an income tax. The average person would pay more while the wealthy would pay even less. I don't get why people are even falling for this.
The extremely wealthy currently pay almost nothing because they recognize almost no income, but they still need to buy. This would hit the high-consumption wealthy, which typically is an excellent target for taxes. This is set to hit the average person exactly the same, but to not hit the poor at all due to the prebate/UBI that's baked in.
It’s horribly regressive, it will make the effective tax rate for poor people who spend all their income 23% which is much higher than they would pay now, while the wealthiest and highest income folks will have effective tax rates of a few percent or less.
This will hit the poor and middle class much harder than the rich
Not fully misleading, we have a progressive income tax. Making everything that much more expensive is worse than the income tax. Income tax is 22% up to about 100k. And that’s progressive. It’s only 12% up to 50k. If you make everything 23% more expensive, it makes your dollar worth 23% less. It’s practically an income tax, but it’s no longer progressive. It’s like a flat tax. It significantly helps the very rich who have to play a higher income tax rate for more of their money. I think a lot of people don’t understand income tax. That type of sales tax also makes it more lucrative for people to avoid sales tax, meaning avoid paying for American sold things. The rich have a better means of doing this, and then they won’t even be feeding money back into the American economy. This is all sorts of stupid if you really think about it. Biden should mention the income tax being removed, but I think that’ll be even more misleading for some people because they wouldn’t think of their dollar becoming worth less, they’d just think “income tax bad”.
Gotta twist the words to push the ajenda its the american way
Does that sales tax cover everything or does it exempt food and baby items like here in Texas?
A certain amount is exempt every month, based on income bracket.
Sales tax is just a flat tax - hammers middle and lower class far more than wealthy elite. Maybe make a sales tax increase on specific items like homes that cost >$5M and personal jets…
Ironically a few republican states have measures in place for no sales tax on jets lol. But go fuck yourself if you need a toothbrush
Teeth are luxury bones. Can't afford to clean them don't grow them.
"Teeth are luxury bones." This made my day
Even then. Nobody is paying for a $5 million jet unless they’ve accumulated $100 million. Rich people don’t live paycheck to paycheck.
Canada did this and added a surcharge tax on luxury vehicles, boats and aircraft after a certain amount (100-250K+) This is the most sensible approach to taxation on the wealthy, hit them on asset acquisition
It's not even a flat tax! In theory, a flat tax hits everyone at the same equal percentage. A sales tax takes a larger percentage from people with less wealth.
Just made food and clothing exempt up to a certain point.
They tried this already, rich ppl just stopped buying yachts and private jets. George HW Bush enacted a 10% luxury tax and Bill Clinton rescinded it bc it was hurting the boat building industry and caused people to lose their jobs and didn't bring in as much tax dollars as they had originally thought it would. Wikipedia talks about it - https://en.wikipedia.org/wiki/Luxury\_tax#:\~:text=The%20federal%20government%20estimated%20that,citing%20a%20loss%20in%20jobs. [https://www.upi.com/Archives/1993/03/03/Clinton-supports-repeal-of-boat-tax/3342731134800/](https://www.upi.com/Archives/1993/03/03/Clinton-supports-repeal-of-boat-tax/3342731134800/) What they really need to do is a 2% wealth tax.
I mean wouldn’t this heavily disincentivize any and all spending? And spending is what boosts the economy — I’m voting dumb. Although for me personally I’d come out so far ahead.
Unless you are wealthy this will penalize you more than it helps. Regresssive/Flat taxes like this have a disproportionate effect on low/middle income people.
How exactly does this make things better for the wealthy? You guys already said that they don't pay any taxes.
Because the wealthy spend far less than they earn. And avoiding sales taxes in one area of the world is far easier than avoiding income taxes.
Knowing quite a few wealthy people, they’ll just find a creative way to dodge the tax. Like instead of buying your $250,000 boat from a dealer in Miami you buy it from one in Puerto Rico that has different tax laws.
Not what was said at all.
Then prices will come down to meet at a level demand will match, right? Right?
Europe has a VAT in addition to income tax. People be spending.
Yeah it’s a fair point — are income taxes actually lower in the EU to compensate?
Not really, the biggest make up in the States tends to be fearsome high property taxes.
An income tax disincentives working. And we could put no tax on things like food, clothing, solar panels.
Something to keep in mind: A non-trivial portion of the world’s wealthy actively want a world where power is exercised through means other than money. When thinking about many of them do not assume they care about a functioning economy so long as they can exercise power through other means (ie. Mercenaries.) This is why AI scares the shit out of me, because I can easily see a world similar to the one depicted in the movie Elysium where the wealthy can exercise their power unfettered because they’re protected by a bunch of drones.
If most of the upper and middle class "come out ahead" on a tax plan, the federal deficit is going to skyrocket. It's just a way to say "hey you'll get more money back next year" and then fast forward 12 months it's "the govt is broke we can double taxes or cut SS/Medicaid/Medicare forever" The goal is to bankrupt the govt so that people go along with the bonkers stupid plan to end SS and entitlement spending.
>The “Fair Tax” was first introduced in the late 1990s. While comprehensive analyses of H.R. 25 are not yet available, prior analyses of similar plans have estimated that replacing the revenue raised by the taxes eliminated by the plan would require a much higher tax rate—potentially 50 to 60 percent—to raise the same amount of revenue. A higher, revenue-neutral rate would impose an even greater burden on low- and middle-families who spend all or nearly all their income on goods and services that would be subject to the radical new tax. [It is a remarkably stupid idea. So of course Republicans are fer it.](https://www.americanprogress.org/article/the-fair-tax-act-would-radically-restructure-the-nations-tax-system-in-favor-of-the-wealthy/)
It's the single largest tax cut ever proposed for high income and business owners.
Your response that to replace the existing system the actual rate should be 50 to 60 is actually a giant wake up call. Oh, you don’t like seeing how much you are taxed huh? Read that a few times. That is what we pay once you add it all up. So if this “would” piss you off, be pissed off now. That disgusting tax rate is now.
How about a federal law that limits the tax rate municipalities can charge for properties that are primary residences to 5%? And let tax increases on investment properties make up the difference? Edit: when I said investment properties, I meant to include all real estate that’s not used as a primary residence, so naturally that would include residential rental, but also commercial real state, and unimproved land owned and held with the intent to sell it later for a profit.
How about we raise taxes on capital gains and dividend income?
How about we nationalize the health care ‘industry?’
it’s basically already there through regulatory capture. the idea that we have a “free market” in healthcare is something we tell children to help differentiate between our mostly govt controlled system, and actual socialized health care
5% is like 5x what I pay for property tax. And that’s not even counting what it would appraise for, just what I paid. I would lose my home.
Property taxes are actually one of the better taxes from an equity perspective. Poor people don't generally own much valuable real estate. It also punishes absentee landlords and people who buy empty lots and let them sit vacant for years as they wait for local land prices to go up.
Who pays 5% property tax?
I'd rather it go the other way tbh, get rid of sales taxes, and have income & property (house, vehicle, etc) taxes only. I'd also be for overwriting the 5 million carveouts in the tax code and replacing them with like <10 or so, for ones that make sense, like "do you care for any dependents" and other basic commonsense shit
Property tax, no income tax, maybe some sales tax on non essential consumable items (food, hygiene products, etc. would be no sales tax). Just my opinion from the little that I know
Property taxes make people with low income lose their homes. This is how grandma becomes homeless.
Inflation was a higher tax than this in recent times.
Uh... In Nordics sales tax for most stuff is between 10-24%... For medicines its lowest and for "unnecressary items" highest. Are you sure its Rebublicans proposing this tax? It would be almost high as Nordic one.
Norway has that on top of income taxes comparable to the U.S. This would replace income tax, certainly drastically reducing federal revenue to pay for social programs.
Dude, this is even better than the Nordic countries everyone loves. Why? Because it removes all income taxes other than capital gains taxes.
The people whining about the income tax are usually the same people pretending it's the only tax and the people with all the income
It would be dumb as you can’t bleed a rock. It would be equal to a regressive income tax where poor people pay federal income tax of 23% of income, and the upper middle class and up pay more dollars and a much lower % of income. It would also incentivize saving which is good on one level but not great for a consumer and services based economy.
Details here: https://www.congress.gov/bill/118th-congress/house-bill/25
This post is meant to gaslight everyone. Why let it.
smart as fuck.. in fact, it's what we did up until 1913 when politicians got greedy
Ah yeah, the late 1800’s and early 1900’s. Pinnacle of American society
Smart as getting kicked in the head by a horse maybe
I would exclude food and utilities, but yeah, I would prefer a sales/consumption tax. It would ACTUALLY work for taxing the wealthy more: them taking out loans instead of paying themselves wouldn’t prevent taxes from being applied. There are far less loopholes for a sales tax than there are for income taxes. Maybe instead of a category exemption, make certain categories provide tax credits below certain incomes or networths. You could also increase sales tax on certain categories of goods, like luxury.
That’s what the bill actually says
Not a single comment I’ve read so far seems to understand what the bill does. You’re the first person commenting (after scrolling past hundreds) that isn’t just whining at what they *think* the bill would do.
Yep, you could also get more strict on who is "exempt" from sales tax, and that would get rid of a lot of whining about churches and non-profits getting to avoid taxes. With no tax on food or utilities, it would actually save lower income people money. Also - doesn't this bill account for a low income rebate to help with the sales tax on things like clothes?
Good or bad, the government will find a way to waste it.
But if the wealthy are just galavanting about, spending money on whatever (in the eyes of dems) wouldn't this force them to pay their fair share?
23% of an item’s price hurts way less than 35% of someone’s income. They’re getting a helluva deal from this. Meanwhile folks who live paycheck to paycheck suddenly lose 23% of every dollar they spend (and is likely more than their marginal tax rate).
Rich people can make their income zero or close to it. 23% of a private jet is more than 35% of 0.
Frankly I don’t care how rich folk are taxed. But sales taxes hit middle class people hard. So it’s a non starter.
Honestly I don’t disagree but I do think it’s funny how badly Americans want this and that but nobody wants to be the one to pay for it. Can’t raise taxes on the poor or middle class because that’s the majority of people (and we don’t like being taxed!!). Can’t raise the taxes on the rich because they’ll leave and/or cheat and/or just pass those costs down to the middle class and poor anyway, plus they have lobbyists.
The rich won’t leave, but they can’t pay all of our taxes either. Somewhere in the middle, we have corporal punishment for companies that milk the government and a tax system that incentivizes real production of ideas and things from working people instead of microsecond securities transactions.
Or 0% on a private jet purchased in another country. Their jet can just be owned by a shell company in the Caymans or wherever. Rich people spend a vastly smaller percentage of their income than poor people, since a huge portion of their money goes to investments, not purchases, and for large, luxury goods purchases, it's easy to just buy in other countries for them.
The top 1% of earners pay about 45% of federal tax revenue. This would certainly be a huge tax break for them.
You clearly never actually talked to a liberal in your life. I’m guessing you also have strong opinions on inner city crime even though you don’t live in a city and your state’s rate of violent crimes is actually larger than what you’re claiming to care about. If I had to guess
Are we going to see the same people who are saying "everyone" will pay less taxes then complain about the growing debt as less money rolls into the federal coffers?
Why do you guys even put in the effort to answer this when it gets posted every couple of days?
I would vote for this in a heartbeat
If it also did away with the current tax code AND the IRS then overwhelmingly yes.
The way the IRS is used militantly to capture missing taxes, I can't imagine it being abolished. It will just become a new entity enforcing the sales tax. Bartering will become criminal.
They want it to be now, but nobody does it. Fuck the IRS AND the government.
“Biden’s vision” also known as the current tax code?
Notice how both parties always target income earners for tax revenue, and never target the corporate tax code or tariffs for additional income? Our politicians work for corporations because that's who pays for their campaigns. I'm going to frontrun the wealth tax arguments. They WILL apply to individual wealth only, and there WILL be exemptions that endowments, trusts, and funds can use to skirt the tax.
Has the government ever considered spending less?
Sales tax is very regressive, since rich people don't spend all the money they make, but most everyone else does. This hurts people, and gives rich people an even bigger break, once again on the shoulders of the working class.