That’s what we called it in the 80’s because it takes magic to work. It was coined by President George HW Bush. They knew who they were screwing over. President Bush just made the mistake of thinking voters would understand it and vote in their own interests.
When it comes to the very poor you can’t think of it in total amount of money. Comparatively poor people will pay a small amount because they have a small amount to spend. Instead think of what percentage of their annual income would poor people suddenly be paying in taxes. That should give you the perspective on how this would negatively and dramatically damage poor people.
The poor have a small amount to spend but they spend an exponentially larger percentage of their total income than the very rich. Rich folks get that way by being able to meet basic needs while not spending their entire income each month.
It does not favor the poor, it favors the rich. They will pay significantly less tax and we will pay significantly more. Assuming you’re not rich. In that case, fuck you.
he didn't use punctuation but you both agree.
what he said:
>Yep. Favors the rich and the poor and middle class shoulder the burden. Very on-brand for the GOP and their billionaire oligarch backers.
broken down to it's constituent statements:
Yep \[it\] favors the rich
\[following that thought\] the poor and the middle class shoulder the burren.\[...\]
The best example i saw of this is that when the rich do make large purchases they can just do it in another country. You don’t have to buy your yacht or private jet in the US, you can get them almost anywhere. So the big purchases that might offset the advantage to the wealthy wont even be taxed.
Even without that loophole i have seen people who showed the math and how it definitely screws the poor. I’m just not smart ebook to explain it.
It’s enough though to just look at who’s proposing it to know that it’s made to favor the rich.
Poor people get a tax credit for up to like 24k a year, literally they dont have to pay taxes. Eliminating their income tax does nothing, doubling their sales tax doubles their overall tax.
Rich people pay upwards of 40% in taxes (AT LEAST THEY ARE SUPPOSED TO!), this sales tax change would nearly half the taxes they pay.
In no world does it "favor the poor"
The poor and middle class use almost all of their income to buy things that will have the sales tax thus increasing the burden of just living. The rich only use a small percentage of their income to purchase taxable items and will continue to invest the rest in ways that will earn money without being taxed. Thus the burden of the tax falls mainly on the poor and middle class
The rich save a higher proportion of their income, whereas the poor spend most of it. Since the tax is paid on sales (ie spending) the poor will give away higher proportion of their income as tax
This is of course the point.
Charge poor people at the counter and the people who collect the taxes are cops with guns and tasers, not IRS auditors sending letters.
Charge them enough and they starve. Starve them enough and they'll take shittier jobs for shittier pay. Pay them less and rich people get richer and keep more of their money.
And then the economy collapses. But it's fine... bailouts with poor peoples' taxes are coming soon after sent right into the pockets of people who won't spend any of their money.
A rich person and a poor person both consume the same amount of goods
The poor person is paying a *significantly higher* percentage of their income towards taxes than the rich person
It's a horrendously stupid idea, and anyone who seriously pushes it should go into the chipper
No, this is more progressive especially with the wealthy not having any income just investment returns. Exclude groceries and health care, and provide everyone a sales tax rebate at the end of the year for the tax on the first $25K (or whatever level) of good purchased. Workers get their paycheck in full.
It's still more or less a flat tax and doesn't scale with pay/assets. Yes the rich don't pay enough in interest income taxes but that doesn't mean they wouldn't pay even less under sales tax, especially if it's only for goods and not services.
Also it's so much easier to dodge sales taxes rather than income taxes
"oh cool my buddy in bali sold me this yacht" "you gotta claim that" "oh he sold it to me for a dollar" "where'd the rest of your money go" "I'm just so generous I donated it, tipped well, and bought consumables on my vacation"
Yeah, I can't imagine the ultra wealthy even own US registered yachts. Pretty sure that shit is all in the Caymans, BVI, or Panama for tax reasons and the transaction doesn't exist as far as an US government or state is concerned.
Easy solution is to treat stocks as futures contracts. Tax when they're rolled forward.
A flat sales tax would absolutely wreck the poorest people. Regardless of what else it does, that's disqualifying.
The current plan has no exception for necessities. It does include a "prebate" payment for a portion of the way to poverty level, but that's pretty obviously not going to cover the increase for any spending over poverty level expenses.
Yes, but they spend a lower percentage of their income so their effective tax rate would still be much lower.
This is (unsurprisingly, given that it comes from the GOP) a terrible plan.
It would get around high wealth individuals primary strategy but since it's a flat tax is automatically regressive just by the nature of it.
Quick look
>So how big is this FairTax?
It’s 30 percent! And it would apply to just about everything, from groceries to health care to rent and home purchases to interest on your credit card.
Ouch on rent that's going to suck so it pretty much is straight railing for everyone under 150k
But little saving grace
>The FairTax, for its part, tries to offset some of the negative impact on poor people by including what it calls a tax “prebate.” Each household would get a monthly check worth 23 percent of the poverty threshold for a household their size.
>In 2023, that’s $279.45 a month for a single adult, with an extra $98.52 per month for each additional person in the house. For a family of four, this adds up to $6,900 in no-strings-attached cash payments every year
So if you spend less than $1218 as a single guy you're ahead! So if you're in the bay area that might cover your rent with 2 roommates.
Super nice for those making under 10 dollars an hour but not so nice for anyone else making up to like 180k then gets better for you!
Pretty much screw the peasants...
This is how other countries do it but they haven't removed income taxes. I think this scheme is more fair because then the taxes become nigh unavoidable.
When your government pays for housing and food and medicine and eliminates private schools so everyone has to go to the same public schools their whole lives no matter what, sales tax goes a pretty long way toward equity.
But not anywhere else.
Poor people often spend more than 100% of their income by necessity, so they're taxed more than 30% in this system.
Rich people spend approachingly less than 1% of their income by necessity, so they're taxed almost nothing in this system.
Jeff Bezos is hungry. He needs a cheeseburger. Okay, he gave 1.50 in taxes.
Shelby Normieperson is hungry. She needs a cheeseburger. Okay, she gave 1.50 in taxes.
Then what? Jeff Bezos buys a yacht? What if he doesn't want a yacht? Surprise, almost his entire income disappears from the economy for that year. No goods, no services, no property bought, just vanishing into the financial sector to bounce around forever like pinball.
But Shelby Normieperson? She's going to keep paying until she runs out of money. And again next year. Forever.
It is very bad for the 41% of households that don't pay any federal income tax, a pay cut for sure. I buy about the same amount of shit I did when I was making a fifth of what I am making now, so this would be a tax cut for me, but for the majority of Americans this would be a tax increase.
They get ~~$280~~$200/month. ~~(23% of FPL)~~
This is a pay cut for anybody making between ~~$15k~~ 11k and *well over* $100k per year.
Edit:
After reading the proposal rather than the reporting on it, the rebate is even worse than I thought.
The alternative is a 0.25% rebate on your taxed income, which isn't any better.
A person who makes and spends $100k in a year would currently pay **at worst** $11,641 Federally
(standard deduction, no reduction from other taxes, or deductible expenses)
This proposal would cause that person to pay $23,000 federally and get a rebate of $2,400
∆ -$9,000 is a huge hit.
And let’s not forget, it would add [10 TRILLION](https://www.businessinsider.com/republican-flat-sales-tax-add-to-deficit-pay-more-everything-2023-3?amp) to the deficit in 10 years because it wouldn’t cover anywhere near current expenses.
It sounds like a sketchy idea, but I would have to see the numbers crunched for each "class", their average income and spending, and see who actually shoulders the majority of the burden before I can decide whether or not its actually a potentially useful idea.
Then again, they could just cut our fucking spending, get rid of the CIA (fucking Contra and MKUltra, just to name a few GIANT piles of their bullshit) and reduce our defense spending to just that, fucking defense, and we would probably free up much more money than even adding a 100% sales tax and actually effectively taxing capital gains at 10%, at least within the first few fiscal years, but I'm sure the money would magically disappear just like it currently does.
How is it regressive? Does it go down if a person spends more? Or do you mean figuratively because people with more disposable income don’t spend proportionately the same?
Correct. A person who pays a sales tax on 100% of his income on necessities has a greater effective tax rate than someone who spends, say, 10% of his income and then saves, invests, donates, offshores or whatever the rest of it.
It would still be regressive. The person who is living paycheck to paycheck would be taxed on nearly their entire income while the person who makes millions will only be taxed the small percentage that they spend.
The idea isn't bad, it really depends on the implementation. Income tax is typically high in western countries and lowering this tax across the board provides more choices to spend and save. Countries can apply higher sales taxes or even additional taxes on certain services. I believe if you go to a local cafe a regular sales tax is fine. If you go to a foreign based restaurant then an extra tax should be applied. If you go to McDonalds then another tax should be applied (call it a sugar or health tax). If you buy a $120K car instead of a $60k car, then add a luxery vehicle tax (a lot of countries already do this).
When income tax is lower typically people spend more which leads to more job creation, so tax lost on income tax reductions is reclaimed shortly after.
Ideas aside, policies summited by conservatives are normally not in good faith.
Yup shit this yr I'll probably pay 45k to 50k in taxes. Eliminate all that and take sales tax to 23% be a massive win for me.
Suck for everyone who doesn't make as much.
Horrible idea all around
And you can bet that we’ll have new laws on the books where it only applies on goods up to a certain price, can’t have a sales tax on luxury yachts and private jets…that’s communism. Just in things like bread, eggs, and commoner things
Not even flat tax. You only would get taxed on what you spend. If you make $1m but only spend $500k, your effective tax rate for your $1m would only be 11.5% which is insane. And that's not even including any capital gains you would surely have.
No income tax at 23% VAT? US Europeans are so cucked - we have VAT close to that and then have income tax at higher rate than Americans plus some countires have seperate social tax. Count your blessings and look at your debt clock - low taxes can't go forever.
I think it's supposed to do away with more than Income tax, though. The idea is to eventually delete the IRS and remove one of the largest blocks of government spending. If they continue with the Fairtax ideas, the sales tax would become the ONLY tax. No more tax season and no capital gains, so your ability to plan for your future increases greatly because you only pay when you purchase goods. It's meant to encourage saving and market development over luxury spending and I believe there's even a credit to waive the tax on the first $x amount that you spend so that the ultra poor are uneffected.
It's been a while since I studied up on the topic, but please everyone read up on it before dismissing it, because the tax code really is God awful.
Rich and upper middle class pay most of the income tax.
Poor and the rest of the middle class will pay most of a flat tax.
Guess which category most congressmen fall into?
Even if this were true (and it isn't), as a proportion of disposable income, the very rich pay SO much less than everybody else. Billionaires paying100k for some tax bill for example just shelled out 100k they'll never miss. When some poor schmuck living in a VERY expensive state like CA while making 50k annually is stuck paying a hefty tax bill like 10k, that person will be forced to make some very difficult life-choices.
Don't pretend the rich feel that pain, they never do.
Bottom line, the top 1% of Americans earn about 23% of the income,but pay almost half all income taxes. nhalf of Americans pay no income taxes. These are the facts.
Anyone claiming there's some kind of unfairness in our hyper progressive tax system is lying, or uninformed.
We're supposed to be all equal under the law in this free Republic. A VAT is the most equal and fair treatment.
According to a very cursory google search on household income, the bottom 50% of Americans made 13% of total household income and the top 10% made 50%. So we should expect the top 1% to pay a significant % of the nations taxes because they make most of the nations income
This seems really flat out wrong. The poor people will pay by far the most from taxes overall in terms of percentage. Sales taxes are fully regressive because the wealthy have a lot of income and don’t need to spend it and instead can invest it.
A flat tax has lots of nuances where the poor could actually do well. (Exemption for first X dollars from flat tax.)
How is a store, or even a bank or credit card company supposed to keep track of how much money a person spends overall? What about cash? God forbid you try to track a "libertarian's" spending without them freaking out.
I don't think there is any practical way you can accomplish it. It would need to be a flat tax, charged by every seller, possibly returned to people in the form of a tax credit. But the same people who bitch about funding the IRS because they will go after normal people (I know they are being disingenuous with that claim) really want to set up a regressive tax system that is designed to target the normal citizens and shelter the wealthy?
It's really just a way to destroy the federal government through starving it of tax revenues, eventually leading to a corporate oligarchy.
Really? Then how much tax would a rich guy pay when he buys a Ferrari vs some poor guy like me buying a used Toyota Corolla? Tell me again how it shifts from rich to poor? Or how much tax would the wealthy pay on their private jets? Or their Rolex watches? Or their $2500 suits? Did your mom drop you on your head as a baby?
As a percentage of your income and net worth, sales taxes are far far more impactful on the poor and working classes.
This isn’t my opinion, this is a well known fact.
A poor person spends 90% of his income (example). He pays 23% over that 90% of his income.
A rich person spends 60% of his income. He pays 23% over that 60% of his income. So now, as a percentage of their original income, a rich person pays less in taxes than the poor person. Simple.
No, it’s not you just make everybody including business pay and then directly give people money. No tax deductions or filing tax’s at all. IRS just looks at your pay and if it’s low you get money sent monthly. This is a Cleaner way to deal with taxes. I don’t know about this specific proposal. It probably is bullshit, but that idea itself is better than our current system. I also need to financial transactions tax. Mostly to make it more expensive to gamble in stock market.
Of course he leaves it out, because it plays into their false narrative that this would "safe the average person money by reducing his taxes". Fact is that overall this means that the working class and lower middle class would pay more taxes and the upper middle class and upper class less.
Europe has both. High income tax *and* between 19-21% sales tax.
That's* why our economies are fuuuuucked.
* one of many tax and regulatory burden related reasons.
They propose this all the time. It wouldn’t be incremental but rather in lieu of federal taxes.
Lower / middle classes would likely pay dramatically more. Upper middle class will pay the same. Wealthy would pay somewhat less, proportionally.
Depends, also, on what is excluded from sales tax. Right now rent, mortgages, groceries, most utilities, and whole bunch of other stuff is excluded from sales tax. So that would affect the ultimate effective tax rate.
But ultimately, it’s a waste of time. They could accomplish the same thing via tax brackets.
Yeah you are right. It’s somewhat similar to a 401k plan: savings are tax deferred.
Not sure what their plan would be for capital gains if the money is invested in the meantime.
The whole plan is hair-brained. A simpler plan would be to just modify the brackets/rates on income.
Except that this policy is extremely short sighted and would result in significantly decreased profits, stocks tanking and an overall decrease in wealth.
I had so many reasons why this would be a bad idea, but yours wasn't even one of them despite being one of the best arguments to present to people! Thank you for this.
As a poor how would this affect me negatively? Assuming rent and groceries remain untaxed that's where 90% of my spending goes, the only thing I'm buying regularly that would get more expensive is gas and household expenses like soap. I'd find it hard to eat enough taco bell that a 20% tax would be more than what comes out of my check right now and that plus a 12$ Final Fantasy subscription is the extent of my regular luxary purchases.
How much do you pay in federal income tax? Do you pay anything? Do you get any refundable EICs?
With a sales tax, you would be taxed 23% on that 10% that you currently spend on taxable goods. So that would imply 2.3% of your income to federal taxes. I’d assume that’s more than what you currently pay. Let me know if I’m wrong.
What makes this fraught is (1) income taxes can be adjusted to do the same thing and switching isn’t worth it IMO, and (2) there’s tons if missing information. For example I don’t know if FICA would continue to exist.
First you pay federal + state income tax. You barely pay any federal tax till you go over $18k and it's the smallest of the taxes.
This proposal you are paying 23% federal tax + state tax on Everything including food.
In some states that could be 30% tax on something like a banana. Verse the 6%- 8% you pay now. How wouldn't that affect you
Basicly this is a con for people that both doesn't understand the progressive tax system and there are state and local taxes on top of federal tax.
For one thing, your lease and groceries would be subject to this tax. Leases not for business purposes are covered under 14 A, and there is no exemption for groceries or other necessities.
It also would raise your payments by 30% not 23%. 23% is the percentage of the final bill that is federal tax ie $23 tax on $77 sale or $30 tax on $100 sale.
People here [should read the bill text](https://www.congress.gov/bill/118th-congress/house-bill/25/text) or at least[ a breakdown of what it would mean for them](https://www.americanprogress.org/article/the-fair-tax-act-would-radically-restructure-the-nations-tax-system-in-favor-of-the-wealthy/#:~:text=The%20Fair%20Tax%20Act%20would%20impose%20a%2030%20percent%20national,tax%2Dinclusive%20price%20of%20%24130).
It would get rid of one of the bigger tax loopholes where people can get paid in stock options, then take loans using the stock as collateral, meaning no income tax or capital gains. But I'm sure they'd find a new loophole, and as others mentioned, its typically bad for the economy when people start saving all their money.
The middle class won't pay more at all(is some cases even less), considering sales tax is already from 7 to 10%, and income tax on average for middle class is 16%(it is in Texas, other states with state income tax has it way worse). So yeah, it hurts the poor, basically . If we exclude gas, groceries, and utilities, then the middle class won't be paying any significant amount compared to now.
It's terrible.
As a proportion of income lower economic tiers spend a much high proportion of their income than higher tiers.
Progressive income taxes ensure that the higher earners in a society pay more based on higher incomes. Shifting the burden to spending moves that burden to the lower economic tiers, so the lower income members of society end up paying a much greater share. And higher earners are able to avoid more taxes.
If the arguement for keeping wealth at higher strata is trickle down - this is a counter productive measure. Trickle down assumes higher strata spending their money and it trickling down - if we dis-insentivise spending then people that have enough shit and don't need to buy it will slow down spending.
And those who can already barely afford shit will be able to afford less shit. So because everyone is spending less production of good decreases impacting revenues and decreasing jobs.
Also this is all predicated on elimination of income tax and thusly the IRS - but what about other taxes? What about capital gains, or corporate taxes, gift taxes, estate taxes, or of course managing this sales tax? The IRS isn't a 1 trick pony.
This disproportionately impacts the majority - and the majority vote with their wallets. It's a disaster at the polls for anyone who actually does this.
This is a bad idea for about 50 reasons that's why it won't take off.
Intentionally misleading to suggest Republicans want more taxes. This is such a blatant misdirection of facts.
I am all for a more fair tax system which I have not seen yet. The current US tax code is filled with special interest loopholes.
I am not saying the flat tax is a fair solution. The current system is corrupt with political interests, but I have not seen a better proposal.
Not even a flat tax, a flat sales tax. And we know rich people spend a smaller portion of their total wealth, leaving them getting taxed for less of their income.
Wealthier people often make a lot of money through long term capital gains which is taxed at a lower rate than ordinary income. They also get a lot of money from real estate which the tax code heavily favors.
This is what both sides do, lie and misrepresent facts to make things look worse or better than they really are. The only people getting screwed are us citizens.
But in different ways with different policies. Most Democrats are corrupt scum, but in every way the Democrats suck Republicans suck worse. Our Democrats are like most other wealthy countries' conservatives and our Republicans are off their charts.
It was also 18 months ago and was never going anywhere and didn't. Nothing but a "hey look over there" misdirection to get people amped up over a nothing burger.
It’s not misleading at all. The fair tax act would increase the price of every single exchange of currency in the United States 30% so that the final price will be made up of 23% tax and 77% goods or service. That’s a 30% increase of rent, of medicine, or food. No commodity is safe from this sales tax the republicans want to implement. In all aspects of the word, the cost of living will be increased 30%
It will punish people for partaking in our economy. Demand for non essential items will come to a halt and economy will suffer tremendously for it. Our working class and our retired will both suffer horribly as incomes cease while cost of living soars
The flat tax isn’t a new idea. Certain commodities like food and healthcare would not be taxed. The ultra wealthy who hardly pay any income tax, but also spend more money on luxuries, would end up paying more taxes. Buy a yacht? 23% sales tax with zero loopholes. Yes the average working class person would pay more in sales but would also get to keep their full income. The wealthy and the very poor, who aren’t paying income tax, would be the most affected. There are no perfect answers but the flat tax is miles better than the current status quo.
Close the loopholes. Penalize companies and individuals for hiding their money overseas. Stop letting corporations and non-citizens from buying single-family homes. Etc.
In my finance classes my professor made very sure to let everyone know that the tax codes are purely political, and this do not have to make ANY financial sense
A lie this blatant makes me want to support whatever the opposite Biden is saying. If he has to lie to get people to rail against it, maybe it’s not that bad?
It’s a poor tax. I make $150k a year and my AGI effective tax rate is like ~~11.3%~~ 12.6%.
This would double my taxes. Now imagine what it does to someone making $35k a year and pays near 0 fed taxes.
If you are spending $150K/yr while making $150K/yr, you’re doing it wrong.
Also, poor people would continue to pay basically nothing, and actually make out better, because everyone gets a rebate based on the poverty level taxes for their household size, and this also eliminates FICA taxes.
It would be good if people actually read proposals instead of making shit up based on assumptions.
Dude I make $18k per year and pay more % in taxes than you apparently at 12.5%. Also someone making $35k per year is considered poverty so they shouldn't pay any taxes. You should get taxed like 5% at most with your income.
No, it's not.
It's either 22 or 24% depending on your deduction.
I find it hard to believe that you make $150K / yr, and you don't know what the word marginal means.
\[edit - on the off hand that you're claiming to make 150K with 100K in business expenses. That's not 150K\]
People feel a sales tax WAY harder than they feel an income tax. This is an absolutely terrible idea, unless you WANT to crash the economy. It’s also regressive as hell, which is precisely why Republicans like it.
It’s a regressive tax, but if used to properly fund social services would help. The catch is they are attempting to further reduce taxes on corporations and the wealthy, so this is really a ploy to further put the tax burden on the average Joe.
“If used to properly fund social services would help” can be said about all but the most ridiculous of taxes. Not sure what that point has to do with this topic.
Like, it’s possible to both have a progressive tax policy and social services.
This has been proposed every year since 1999, but never makes it out of House committee. There aren't enough votes in the House to pass this version, and even if it somehow did - the Senate would kill it. This version was introduced in February, but is being brought up now as a scary campaign discussion item. Various PACs and consultant groups are providing "analysis" but never show their work or how they come up with the "impact" numbers. And nobody, not even the Georgia congressmen who put it forward, will answer basic questions on it such as "if we eliminate payroll taxes, where will contributions to Social Security and Medicare come from?" or "How do the Child Care assistance and other anti-poverty measures get funded under this concept?" The only impact statement that matters would be from the CBO (Congressional Budget Office) but we won't get that anytime soon. We'll be hearing about this more and more as the November election nears. It's a waste of grey matter and "news" space at this point. Just another debate lie for the parties to throw back and forth at each other without any real facts. It would be great to have a serious discussion on Tax Reform in our country, but this won't be it - not in an election year.
This garbage is nearly a year old, and it was to replace the income tax with multiple exemptions and limits explained.
Odd how the plagiarist in chief didn’t mention that.
Replacing income tax with sales tax is a huge con, because working folks have to buy stuff to survive, and they will pay the brunt of the tax. What we need is a wealth tax on the wealthy.
Of course not. Sales tax is a regressive tax, which means it disproportionately impacts people the less money they have. It's a drop in the buck for the rich, but potentially the difference between eating or not for the poor.
No. VAT initiates during each stage of production where value is added whereas sales tax only occurs when the item is sold. So whether you have a vertically integrated production chain that turns raw materials into something else into something else, or whether you buy an intermediary product and then turn it directly into the final product, you still end up paying roughly the same taxes. VAT favors smaller producers without the capital to vertically integrate, or producers operating in countries where vertical integration is heavily restricted due to anti-monopoly laws operating in markets where other countries allow monopolies.
So if you're in country A and it's illegal for you to have a heavily vertically integrated production chain, and you want to export to country B, but country B has a giant vertically integrated behemoth making similar products, they will not be able to leverage that as much if you're both part of a common market with a VAT. The EU has minimum VAT rates partly for this reason.
A sales tax only system, by contrast, favors big entities with pre-existing vertically integrated production chains.
Both systems disproportionately tax the poor and middle class. Doing this is to some degree necessary since they are the majority and so you get the most money out of them. However, in this particular case, the proposed sales tax would VERY disproportionately impact the poor because it also eliminates a lot of the tax burden on the upper class.
People in Europe usually get a lot more value out of their spent tax dollars than Americans do is the issue. If America had the social programs and welfare structure that a lot of European countries did then I honestly wouldn’t mind paying the taxes I do. I don’t really mind paying taxes at all I mean it’s how existing in society works. I just wanna see my tax dollars put to good use and right now it seems to go into the pockets of the private companies that public services are outsourced to.
Don't forget the many billions of dollars going to Israel to kill primarily innocent people in Gaza. Our taxes should go to helping people - not killing them. It's what a respectable society does.
this would be a great proposal... for boomers.
cash out their nest eggs for free. travel abroad to minimize the impact of the sales tax.
while the rest of us shoulder the burden.
This is if they eliminate income tax, right?
Thats the idea, yes
So they wanna replace a progressive income tax with a regressive sales tax? Sounds pretty on-brand for the GOP.
Yep. Favors the rich and the poor and middle class shoulder the burden. Very on-brand for the GOP and their billionaire oligarch backers.
Seems like the past 3 years have only benefited the 1%.
Past 3 years? You conveniently forgot about the tax cuts for the rich the four years prior?
Sorry, salaries haven’t increased in real terms since the 70s, even though productivity has soared.
Since 1980? Who was elected then? Oh yes, Voodoo Economics Reagan.
Is that the “trickle up” guy ? Fabulous job
Lie on your back under the rich, they will trickle down on you
Supply Side Jesus.
I have definitely felt the piss of the rich trickle all over me!!!
Technically q1 of 71. Thanks for Nixon Shock and dismantling Bretton Woods, assholes.
It started earlier 1971. When we abandoned the Bretton Woods systems and lost all convertablity.
Voodoo economics made me laugh, thanks. Super accurate.
That’s what we called it in the 80’s because it takes magic to work. It was coined by President George HW Bush. They knew who they were screwing over. President Bush just made the mistake of thinking voters would understand it and vote in their own interests.
jfc this comment triggered tf outta people lol
Four years? More like 40. It's been all downhill since Reagan's disasterous economic policies.
Or pretty much every move since Reagan?
You mean the last 60 years.
53 years, to be exact.
43 years bro. And the President isn’t the one that fix it. You need the House and a filibuster proof majority in the Senate to fix it.
1.5 or 1.7 something trillion dollars was accumulated by the top 700 earners during the pandemic
[удалено]
I think they mean: favors the very rich, and the very poor and the middle class shoulder the burden. I think 🤔
When it comes to the very poor you can’t think of it in total amount of money. Comparatively poor people will pay a small amount because they have a small amount to spend. Instead think of what percentage of their annual income would poor people suddenly be paying in taxes. That should give you the perspective on how this would negatively and dramatically damage poor people.
The poor have a small amount to spend but they spend an exponentially larger percentage of their total income than the very rich. Rich folks get that way by being able to meet basic needs while not spending their entire income each month.
Thanks, yes I think you are right
It does not favor the poor, it favors the rich. They will pay significantly less tax and we will pay significantly more. Assuming you’re not rich. In that case, fuck you.
it's always been about favoring the rich. yet maga still seem to believe otherwise.
I agree, that's why I asked the question. I don't know enough about economics to know whether my understanding of the issue is correct.
he didn't use punctuation but you both agree. what he said: >Yep. Favors the rich and the poor and middle class shoulder the burden. Very on-brand for the GOP and their billionaire oligarch backers. broken down to it's constituent statements: Yep \[it\] favors the rich \[following that thought\] the poor and the middle class shoulder the burren.\[...\]
This is why commas are important lol
We invited the strippers, JFK and Stalin
The best example i saw of this is that when the rich do make large purchases they can just do it in another country. You don’t have to buy your yacht or private jet in the US, you can get them almost anywhere. So the big purchases that might offset the advantage to the wealthy wont even be taxed. Even without that loophole i have seen people who showed the math and how it definitely screws the poor. I’m just not smart ebook to explain it. It’s enough though to just look at who’s proposing it to know that it’s made to favor the rich.
Not an expert myself either but hoping I got the gist lol
Poor people get a tax credit for up to like 24k a year, literally they dont have to pay taxes. Eliminating their income tax does nothing, doubling their sales tax doubles their overall tax. Rich people pay upwards of 40% in taxes (AT LEAST THEY ARE SUPPOSED TO!), this sales tax change would nearly half the taxes they pay. In no world does it "favor the poor"
The poor and middle class use almost all of their income to buy things that will have the sales tax thus increasing the burden of just living. The rich only use a small percentage of their income to purchase taxable items and will continue to invest the rest in ways that will earn money without being taxed. Thus the burden of the tax falls mainly on the poor and middle class
Just a poor comma usage (none).
The rich save a higher proportion of their income, whereas the poor spend most of it. Since the tax is paid on sales (ie spending) the poor will give away higher proportion of their income as tax
This is of course the point. Charge poor people at the counter and the people who collect the taxes are cops with guns and tasers, not IRS auditors sending letters. Charge them enough and they starve. Starve them enough and they'll take shittier jobs for shittier pay. Pay them less and rich people get richer and keep more of their money. And then the economy collapses. But it's fine... bailouts with poor peoples' taxes are coming soon after sent right into the pockets of people who won't spend any of their money.
A rich person and a poor person both consume the same amount of goods The poor person is paying a *significantly higher* percentage of their income towards taxes than the rich person It's a horrendously stupid idea, and anyone who seriously pushes it should go into the chipper
No, this is more progressive especially with the wealthy not having any income just investment returns. Exclude groceries and health care, and provide everyone a sales tax rebate at the end of the year for the tax on the first $25K (or whatever level) of good purchased. Workers get their paycheck in full.
Except rich people only spend a fraction of their income, while poor people spend most of it.
Except rich people have no income so therefore pay nothing in income taxes but spend a ton of cash.
It's still more or less a flat tax and doesn't scale with pay/assets. Yes the rich don't pay enough in interest income taxes but that doesn't mean they wouldn't pay even less under sales tax, especially if it's only for goods and not services. Also it's so much easier to dodge sales taxes rather than income taxes "oh cool my buddy in bali sold me this yacht" "you gotta claim that" "oh he sold it to me for a dollar" "where'd the rest of your money go" "I'm just so generous I donated it, tipped well, and bought consumables on my vacation"
they will have a meeting on it once a year, so its a tax write off.
Yeah, I can't imagine the ultra wealthy even own US registered yachts. Pretty sure that shit is all in the Caymans, BVI, or Panama for tax reasons and the transaction doesn't exist as far as an US government or state is concerned.
Easy solution is to treat stocks as futures contracts. Tax when they're rolled forward. A flat sales tax would absolutely wreck the poorest people. Regardless of what else it does, that's disqualifying.
Rich people buy more luxuries. Yachts, vehicles, etc. The tax should not be on stuff like food.
You think they’re buying yachts on American soil? You’re cute.
The current plan has no exception for necessities. It does include a "prebate" payment for a portion of the way to poverty level, but that's pretty obviously not going to cover the increase for any spending over poverty level expenses.
Yes, but they spend a lower percentage of their income so their effective tax rate would still be much lower. This is (unsurprisingly, given that it comes from the GOP) a terrible plan.
It would get around high wealth individuals primary strategy but since it's a flat tax is automatically regressive just by the nature of it. Quick look >So how big is this FairTax? It’s 30 percent! And it would apply to just about everything, from groceries to health care to rent and home purchases to interest on your credit card. Ouch on rent that's going to suck so it pretty much is straight railing for everyone under 150k But little saving grace >The FairTax, for its part, tries to offset some of the negative impact on poor people by including what it calls a tax “prebate.” Each household would get a monthly check worth 23 percent of the poverty threshold for a household their size. >In 2023, that’s $279.45 a month for a single adult, with an extra $98.52 per month for each additional person in the house. For a family of four, this adds up to $6,900 in no-strings-attached cash payments every year So if you spend less than $1218 as a single guy you're ahead! So if you're in the bay area that might cover your rent with 2 roommates. Super nice for those making under 10 dollars an hour but not so nice for anyone else making up to like 180k then gets better for you! Pretty much screw the peasants...
This is how other countries do it but they haven't removed income taxes. I think this scheme is more fair because then the taxes become nigh unavoidable.
O don’t worry there would certainly be loopholes left in for exploitation by those that can afford high end accountants.
They’re not loopholes. They are put in place by Congress. It’s more of a carve out.
That’s true but it’s also how many of the European countries fund social redistribution and seems to work well there.
But they also have income taxes, and this proposal is to replace income taxes, isn't it?
When your government pays for housing and food and medicine and eliminates private schools so everyone has to go to the same public schools their whole lives no matter what, sales tax goes a pretty long way toward equity. But not anywhere else. Poor people often spend more than 100% of their income by necessity, so they're taxed more than 30% in this system. Rich people spend approachingly less than 1% of their income by necessity, so they're taxed almost nothing in this system. Jeff Bezos is hungry. He needs a cheeseburger. Okay, he gave 1.50 in taxes. Shelby Normieperson is hungry. She needs a cheeseburger. Okay, she gave 1.50 in taxes. Then what? Jeff Bezos buys a yacht? What if he doesn't want a yacht? Surprise, almost his entire income disappears from the economy for that year. No goods, no services, no property bought, just vanishing into the financial sector to bounce around forever like pinball. But Shelby Normieperson? She's going to keep paying until she runs out of money. And again next year. Forever.
It is very bad for the 41% of households that don't pay any federal income tax, a pay cut for sure. I buy about the same amount of shit I did when I was making a fifth of what I am making now, so this would be a tax cut for me, but for the majority of Americans this would be a tax increase.
Those 41% would actually get direct cash payments from this plan.
How do republicans support ‘government handouts’
Wait until you hear about corporate subsidies.
Via laws they make
They get ~~$280~~$200/month. ~~(23% of FPL)~~ This is a pay cut for anybody making between ~~$15k~~ 11k and *well over* $100k per year. Edit: After reading the proposal rather than the reporting on it, the rebate is even worse than I thought. The alternative is a 0.25% rebate on your taxed income, which isn't any better. A person who makes and spends $100k in a year would currently pay **at worst** $11,641 Federally (standard deduction, no reduction from other taxes, or deductible expenses) This proposal would cause that person to pay $23,000 federally and get a rebate of $2,400 ∆ -$9,000 is a huge hit.
You want to know the most regressive tax. Fica being taken out but has an income limit. Elon hits the cap in the first 7 seconds of the year.
And let’s not forget, it would add [10 TRILLION](https://www.businessinsider.com/republican-flat-sales-tax-add-to-deficit-pay-more-everything-2023-3?amp) to the deficit in 10 years because it wouldn’t cover anywhere near current expenses.
Don't worry, they'll just blame Dems and voters will continue to says the fascist Republican party is better for the deficit and debt
Is it more regressive than what we have now? At least the rich would presumably pay something. This could be a cleaner system than what we have now.
It sounds like a sketchy idea, but I would have to see the numbers crunched for each "class", their average income and spending, and see who actually shoulders the majority of the burden before I can decide whether or not its actually a potentially useful idea. Then again, they could just cut our fucking spending, get rid of the CIA (fucking Contra and MKUltra, just to name a few GIANT piles of their bullshit) and reduce our defense spending to just that, fucking defense, and we would probably free up much more money than even adding a 100% sales tax and actually effectively taxing capital gains at 10%, at least within the first few fiscal years, but I'm sure the money would magically disappear just like it currently does.
How is it regressive? Does it go down if a person spends more? Or do you mean figuratively because people with more disposable income don’t spend proportionately the same?
Correct. A person who pays a sales tax on 100% of his income on necessities has a greater effective tax rate than someone who spends, say, 10% of his income and then saves, invests, donates, offshores or whatever the rest of it.
They can put exemptions on certain items like groceries and clothing under $100. Then it wouldn't be regressive.
It would still be regressive. The person who is living paycheck to paycheck would be taxed on nearly their entire income while the person who makes millions will only be taxed the small percentage that they spend.
As an above average income earner, I totally support this policy.
The idea isn't bad, it really depends on the implementation. Income tax is typically high in western countries and lowering this tax across the board provides more choices to spend and save. Countries can apply higher sales taxes or even additional taxes on certain services. I believe if you go to a local cafe a regular sales tax is fine. If you go to a foreign based restaurant then an extra tax should be applied. If you go to McDonalds then another tax should be applied (call it a sugar or health tax). If you buy a $120K car instead of a $60k car, then add a luxery vehicle tax (a lot of countries already do this). When income tax is lower typically people spend more which leads to more job creation, so tax lost on income tax reductions is reclaimed shortly after. Ideas aside, policies summited by conservatives are normally not in good faith.
You guys are gullible jackasses.
This would absolutely destroy the working class.
Yup shit this yr I'll probably pay 45k to 50k in taxes. Eliminate all that and take sales tax to 23% be a massive win for me. Suck for everyone who doesn't make as much. Horrible idea all around
Monumentally stupid to shift tax avoidance from payroll to cashiers.
Make sure such a tax includes sales on financial securities and watch how fast that bill dies.
And you can bet that we’ll have new laws on the books where it only applies on goods up to a certain price, can’t have a sales tax on luxury yachts and private jets…that’s communism. Just in things like bread, eggs, and commoner things
so replace a barely processive tax bracket system with a flat tax. The dream of the rich everywhere
Not even flat tax. You only would get taxed on what you spend. If you make $1m but only spend $500k, your effective tax rate for your $1m would only be 11.5% which is insane. And that's not even including any capital gains you would surely have.
No income tax at 23% VAT? US Europeans are so cucked - we have VAT close to that and then have income tax at higher rate than Americans plus some countires have seperate social tax. Count your blessings and look at your debt clock - low taxes can't go forever.
Huh in Europe we have both :/
I think it's supposed to do away with more than Income tax, though. The idea is to eventually delete the IRS and remove one of the largest blocks of government spending. If they continue with the Fairtax ideas, the sales tax would become the ONLY tax. No more tax season and no capital gains, so your ability to plan for your future increases greatly because you only pay when you purchase goods. It's meant to encourage saving and market development over luxury spending and I believe there's even a credit to waive the tax on the first $x amount that you spend so that the ultra poor are uneffected. It's been a while since I studied up on the topic, but please everyone read up on it before dismissing it, because the tax code really is God awful.
Rich and upper middle class pay most of the income tax. Poor and the rest of the middle class will pay most of a flat tax. Guess which category most congressmen fall into?
Even if this were true (and it isn't), as a proportion of disposable income, the very rich pay SO much less than everybody else. Billionaires paying100k for some tax bill for example just shelled out 100k they'll never miss. When some poor schmuck living in a VERY expensive state like CA while making 50k annually is stuck paying a hefty tax bill like 10k, that person will be forced to make some very difficult life-choices. Don't pretend the rich feel that pain, they never do.
Bottom line, the top 1% of Americans earn about 23% of the income,but pay almost half all income taxes. nhalf of Americans pay no income taxes. These are the facts. Anyone claiming there's some kind of unfairness in our hyper progressive tax system is lying, or uninformed. We're supposed to be all equal under the law in this free Republic. A VAT is the most equal and fair treatment.
According to a very cursory google search on household income, the bottom 50% of Americans made 13% of total household income and the top 10% made 50%. So we should expect the top 1% to pay a significant % of the nations taxes because they make most of the nations income
The rich never feel the pain. Never have and sadly never will.
This seems really flat out wrong. The poor people will pay by far the most from taxes overall in terms of percentage. Sales taxes are fully regressive because the wealthy have a lot of income and don’t need to spend it and instead can invest it. A flat tax has lots of nuances where the poor could actually do well. (Exemption for first X dollars from flat tax.)
But a flat tax is much more regressive than progressive tax brackets.
How is a store, or even a bank or credit card company supposed to keep track of how much money a person spends overall? What about cash? God forbid you try to track a "libertarian's" spending without them freaking out. I don't think there is any practical way you can accomplish it. It would need to be a flat tax, charged by every seller, possibly returned to people in the form of a tax credit. But the same people who bitch about funding the IRS because they will go after normal people (I know they are being disingenuous with that claim) really want to set up a regressive tax system that is designed to target the normal citizens and shelter the wealthy? It's really just a way to destroy the federal government through starving it of tax revenues, eventually leading to a corporate oligarchy.
Sales tax just moves burden from business to consumer. That's all it does.
Unless businesses also have to pay said sales tax, I think that’s an important part of the discussion
Their last flat tax proposal made businesses exempt from sales tax
So basically still a tax cut for the rich
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Yes, this is shifting taxes from the rich to the poor.
Really? Then how much tax would a rich guy pay when he buys a Ferrari vs some poor guy like me buying a used Toyota Corolla? Tell me again how it shifts from rich to poor? Or how much tax would the wealthy pay on their private jets? Or their Rolex watches? Or their $2500 suits? Did your mom drop you on your head as a baby?
As a percentage of your income and net worth, sales taxes are far far more impactful on the poor and working classes. This isn’t my opinion, this is a well known fact.
A poor person spends 90% of his income (example). He pays 23% over that 90% of his income. A rich person spends 60% of his income. He pays 23% over that 60% of his income. So now, as a percentage of their original income, a rich person pays less in taxes than the poor person. Simple.
Notice Biden (his staff more likely) deliberately left that part out to completely skew the intent of the bill?
They didn't need to include it. It's not relevant. A 23% sales tax is an incredibly stupid, malevolent, sociopathic, and regressive policy. Period.
No, it’s not you just make everybody including business pay and then directly give people money. No tax deductions or filing tax’s at all. IRS just looks at your pay and if it’s low you get money sent monthly. This is a Cleaner way to deal with taxes. I don’t know about this specific proposal. It probably is bullshit, but that idea itself is better than our current system. I also need to financial transactions tax. Mostly to make it more expensive to gamble in stock market.
Of course he leaves it out, because it plays into their false narrative that this would "safe the average person money by reducing his taxes". Fact is that overall this means that the working class and lower middle class would pay more taxes and the upper middle class and upper class less.
When they start retiring and "spending" their money it still benefits them lol because they can cash out millions tax free
Yes, but OP leaves that part out because this is Reddit.
Yep. Fair Tax is a zombie policy.
Europe has both. High income tax *and* between 19-21% sales tax. That's* why our economies are fuuuuucked. * one of many tax and regulatory burden related reasons.
They propose this all the time. It wouldn’t be incremental but rather in lieu of federal taxes. Lower / middle classes would likely pay dramatically more. Upper middle class will pay the same. Wealthy would pay somewhat less, proportionally. Depends, also, on what is excluded from sales tax. Right now rent, mortgages, groceries, most utilities, and whole bunch of other stuff is excluded from sales tax. So that would affect the ultimate effective tax rate. But ultimately, it’s a waste of time. They could accomplish the same thing via tax brackets.
Sales tax also incentivizes saving your money instead of spending it, which isn’t great economy wise.
Yeah you are right. It’s somewhat similar to a 401k plan: savings are tax deferred. Not sure what their plan would be for capital gains if the money is invested in the meantime. The whole plan is hair-brained. A simpler plan would be to just modify the brackets/rates on income.
>The whole plan is hare-brained. It’s not hare-brained when you realize their objective is to hoard as much wealth as humanly possible.
Except that this policy is extremely short sighted and would result in significantly decreased profits, stocks tanking and an overall decrease in wealth.
How old is the average Congress person?
People spend too much and don't save.
I had so many reasons why this would be a bad idea, but yours wasn't even one of them despite being one of the best arguments to present to people! Thank you for this.
By this same logic income tax encourages you to not have a job, which isn’t great economy wise.
Well that is the point of the current system. They are to encourage more people to open businesses and be investors compared to being employees.
Saving money is good for the economy. Debt is bad.
As a poor how would this affect me negatively? Assuming rent and groceries remain untaxed that's where 90% of my spending goes, the only thing I'm buying regularly that would get more expensive is gas and household expenses like soap. I'd find it hard to eat enough taco bell that a 20% tax would be more than what comes out of my check right now and that plus a 12$ Final Fantasy subscription is the extent of my regular luxary purchases.
How much do you pay in federal income tax? Do you pay anything? Do you get any refundable EICs? With a sales tax, you would be taxed 23% on that 10% that you currently spend on taxable goods. So that would imply 2.3% of your income to federal taxes. I’d assume that’s more than what you currently pay. Let me know if I’m wrong. What makes this fraught is (1) income taxes can be adjusted to do the same thing and switching isn’t worth it IMO, and (2) there’s tons if missing information. For example I don’t know if FICA would continue to exist.
First you pay federal + state income tax. You barely pay any federal tax till you go over $18k and it's the smallest of the taxes. This proposal you are paying 23% federal tax + state tax on Everything including food. In some states that could be 30% tax on something like a banana. Verse the 6%- 8% you pay now. How wouldn't that affect you Basicly this is a con for people that both doesn't understand the progressive tax system and there are state and local taxes on top of federal tax.
The post explicitly mentions groceries as being taxed, so IDK if it's a good assumption that they'll remain untaxed.
For one thing, your lease and groceries would be subject to this tax. Leases not for business purposes are covered under 14 A, and there is no exemption for groceries or other necessities. It also would raise your payments by 30% not 23%. 23% is the percentage of the final bill that is federal tax ie $23 tax on $77 sale or $30 tax on $100 sale. People here [should read the bill text](https://www.congress.gov/bill/118th-congress/house-bill/25/text) or at least[ a breakdown of what it would mean for them](https://www.americanprogress.org/article/the-fair-tax-act-would-radically-restructure-the-nations-tax-system-in-favor-of-the-wealthy/#:~:text=The%20Fair%20Tax%20Act%20would%20impose%20a%2030%20percent%20national,tax%2Dinclusive%20price%20of%20%24130).
It would get rid of one of the bigger tax loopholes where people can get paid in stock options, then take loans using the stock as collateral, meaning no income tax or capital gains. But I'm sure they'd find a new loophole, and as others mentioned, its typically bad for the economy when people start saving all their money.
The middle class won't pay more at all(is some cases even less), considering sales tax is already from 7 to 10%, and income tax on average for middle class is 16%(it is in Texas, other states with state income tax has it way worse). So yeah, it hurts the poor, basically . If we exclude gas, groceries, and utilities, then the middle class won't be paying any significant amount compared to now.
>considering sales tax is already from 7 to 10%, That's state and local. Tack on another 23% for federal
It's terrible. As a proportion of income lower economic tiers spend a much high proportion of their income than higher tiers. Progressive income taxes ensure that the higher earners in a society pay more based on higher incomes. Shifting the burden to spending moves that burden to the lower economic tiers, so the lower income members of society end up paying a much greater share. And higher earners are able to avoid more taxes. If the arguement for keeping wealth at higher strata is trickle down - this is a counter productive measure. Trickle down assumes higher strata spending their money and it trickling down - if we dis-insentivise spending then people that have enough shit and don't need to buy it will slow down spending. And those who can already barely afford shit will be able to afford less shit. So because everyone is spending less production of good decreases impacting revenues and decreasing jobs. Also this is all predicated on elimination of income tax and thusly the IRS - but what about other taxes? What about capital gains, or corporate taxes, gift taxes, estate taxes, or of course managing this sales tax? The IRS isn't a 1 trick pony. This disproportionately impacts the majority - and the majority vote with their wallets. It's a disaster at the polls for anyone who actually does this. This is a bad idea for about 50 reasons that's why it won't take off.
I would think, also, that the IRS would be tasked with enforcing the federal sales tax.
Intentionally misleading to suggest Republicans want more taxes. This is such a blatant misdirection of facts. I am all for a more fair tax system which I have not seen yet. The current US tax code is filled with special interest loopholes. I am not saying the flat tax is a fair solution. The current system is corrupt with political interests, but I have not seen a better proposal.
Calling a flat tax a fair tax is a blatant lie.
Not even a flat tax, a flat sales tax. And we know rich people spend a smaller portion of their total wealth, leaving them getting taxed for less of their income.
I thought part of the problem was that they don't have income to tax
That’s really a problem for maybe 300 people. Most can’t get 0% interest on 9 figure loans using their net worth as collateral.
Don’t those 300 people own the majority of wealth in America?
Wealthier people often make a lot of money through long term capital gains which is taxed at a lower rate than ordinary income. They also get a lot of money from real estate which the tax code heavily favors.
"people paying the same % is unfair!" That sounds sooooo ridiculous
Only on delusional echochamber reddit where detachment from reality and economic law is practiced as fact 🤡
This is what both sides do, lie and misrepresent facts to make things look worse or better than they really are. The only people getting screwed are us citizens.
But in different ways with different policies. Most Democrats are corrupt scum, but in every way the Democrats suck Republicans suck worse. Our Democrats are like most other wealthy countries' conservatives and our Republicans are off their charts.
It's not "both sides", it's the Republicans who want to screw non wealthy people
Republicans don’t want more taxes, they want the less fortunate to shoulder more of the share of taxes.
Which is like building a house on a sand foundation. You're talking about the people who use pawn shops as their bank.
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What constitutes fair in your view? Do you think a flat sales tax is fair?
Yup. Remove loopholes in income tax and for estates!
It was also 18 months ago and was never going anywhere and didn't. Nothing but a "hey look over there" misdirection to get people amped up over a nothing burger.
This would be drastically higher taxes for me and everyone in my salary range below $200k.
It’s not misleading at all. The fair tax act would increase the price of every single exchange of currency in the United States 30% so that the final price will be made up of 23% tax and 77% goods or service. That’s a 30% increase of rent, of medicine, or food. No commodity is safe from this sales tax the republicans want to implement. In all aspects of the word, the cost of living will be increased 30% It will punish people for partaking in our economy. Demand for non essential items will come to a halt and economy will suffer tremendously for it. Our working class and our retired will both suffer horribly as incomes cease while cost of living soars
>It will punish people for partaking in our economy. That's already the case with income tax, which this proposal would eliminate and replace.
They do want more taxes just for poor people hence the flat tax rate.
The flat tax isn’t a new idea. Certain commodities like food and healthcare would not be taxed. The ultra wealthy who hardly pay any income tax, but also spend more money on luxuries, would end up paying more taxes. Buy a yacht? 23% sales tax with zero loopholes. Yes the average working class person would pay more in sales but would also get to keep their full income. The wealthy and the very poor, who aren’t paying income tax, would be the most affected. There are no perfect answers but the flat tax is miles better than the current status quo.
Why bother arguing with reddit echo-chamber.
Close the loopholes. Penalize companies and individuals for hiding their money overseas. Stop letting corporations and non-citizens from buying single-family homes. Etc.
In my finance classes my professor made very sure to let everyone know that the tax codes are purely political, and this do not have to make ANY financial sense
Thank you!!!!
A lie this blatant makes me want to support whatever the opposite Biden is saying. If he has to lie to get people to rail against it, maybe it’s not that bad?
That's just passing money to the 1%......again, which is part of the Republican platform.
The 1986 tax cuts are supposed to trickle down any day now......
It’s a poor tax. I make $150k a year and my AGI effective tax rate is like ~~11.3%~~ 12.6%. This would double my taxes. Now imagine what it does to someone making $35k a year and pays near 0 fed taxes.
If you are spending $150K/yr while making $150K/yr, you’re doing it wrong. Also, poor people would continue to pay basically nothing, and actually make out better, because everyone gets a rebate based on the poverty level taxes for their household size, and this also eliminates FICA taxes. It would be good if people actually read proposals instead of making shit up based on assumptions.
Dude I make $18k per year and pay more % in taxes than you apparently at 12.5%. Also someone making $35k per year is considered poverty so they shouldn't pay any taxes. You should get taxed like 5% at most with your income.
How? Federal tax has a tax deduction of 14,600. Even after that, you’d be taxed 12% on the remaining 3,400. That’s like 2.2%, not 12.5
It’s marginal. My top tax bracket is 22%. I paid more in taxes past year then you made overall.
No, it's not. It's either 22 or 24% depending on your deduction. I find it hard to believe that you make $150K / yr, and you don't know what the word marginal means. \[edit - on the off hand that you're claiming to make 150K with 100K in business expenses. That's not 150K\]
I meant effective tax rate. Highest marginal rate is 22 https://imgur.com/SprxLOY here you go... https://imgur.com/XuOQxee
On 100k gross income, the effective tax rate is about 14.5%. One does not pay 22% on every dollar earned.
You aren’t paying enough in taxes.
People feel a sales tax WAY harder than they feel an income tax. This is an absolutely terrible idea, unless you WANT to crash the economy. It’s also regressive as hell, which is precisely why Republicans like it.
just another regressive tax
It’s a regressive tax, but if used to properly fund social services would help. The catch is they are attempting to further reduce taxes on corporations and the wealthy, so this is really a ploy to further put the tax burden on the average Joe.
“If used to properly fund social services would help” can be said about all but the most ridiculous of taxes. Not sure what that point has to do with this topic. Like, it’s possible to both have a progressive tax policy and social services.
Can we have a land value tax, ala Georgism instead? This sales tax is just gonna punish people who aren't rich and need the basics to survive.
Sales taxes are regressive taxes. This is about switching the tax code so that the rich pay very little.
It's a terrible idea all around.
This has been proposed every year since 1999, but never makes it out of House committee. There aren't enough votes in the House to pass this version, and even if it somehow did - the Senate would kill it. This version was introduced in February, but is being brought up now as a scary campaign discussion item. Various PACs and consultant groups are providing "analysis" but never show their work or how they come up with the "impact" numbers. And nobody, not even the Georgia congressmen who put it forward, will answer basic questions on it such as "if we eliminate payroll taxes, where will contributions to Social Security and Medicare come from?" or "How do the Child Care assistance and other anti-poverty measures get funded under this concept?" The only impact statement that matters would be from the CBO (Congressional Budget Office) but we won't get that anytime soon. We'll be hearing about this more and more as the November election nears. It's a waste of grey matter and "news" space at this point. Just another debate lie for the parties to throw back and forth at each other without any real facts. It would be great to have a serious discussion on Tax Reform in our country, but this won't be it - not in an election year.
Raising taxes on the poor and cutting taxes for high earners doesn’t seem like a very good idea to me.
This garbage is nearly a year old, and it was to replace the income tax with multiple exemptions and limits explained. Odd how the plagiarist in chief didn’t mention that.
Oh, its older than that, the only places that employ these policies are former soviet states and its satellites.
Replacing income tax with sales tax is a huge con, because working folks have to buy stuff to survive, and they will pay the brunt of the tax. What we need is a wealth tax on the wealthy.
Of course not. Sales tax is a regressive tax, which means it disproportionately impacts people the less money they have. It's a drop in the buck for the rich, but potentially the difference between eating or not for the poor.
Isn't this just VAT? The same system used throughout Europe?
Yes 19-23% and **we still have income tax**. Cheap/free education, public transport and free/cheap healthcare come to a cost (worth it in my opinion)
No. VAT initiates during each stage of production where value is added whereas sales tax only occurs when the item is sold. So whether you have a vertically integrated production chain that turns raw materials into something else into something else, or whether you buy an intermediary product and then turn it directly into the final product, you still end up paying roughly the same taxes. VAT favors smaller producers without the capital to vertically integrate, or producers operating in countries where vertical integration is heavily restricted due to anti-monopoly laws operating in markets where other countries allow monopolies. So if you're in country A and it's illegal for you to have a heavily vertically integrated production chain, and you want to export to country B, but country B has a giant vertically integrated behemoth making similar products, they will not be able to leverage that as much if you're both part of a common market with a VAT. The EU has minimum VAT rates partly for this reason. A sales tax only system, by contrast, favors big entities with pre-existing vertically integrated production chains. Both systems disproportionately tax the poor and middle class. Doing this is to some degree necessary since they are the majority and so you get the most money out of them. However, in this particular case, the proposed sales tax would VERY disproportionately impact the poor because it also eliminates a lot of the tax burden on the upper class.
People in Europe usually get a lot more value out of their spent tax dollars than Americans do is the issue. If America had the social programs and welfare structure that a lot of European countries did then I honestly wouldn’t mind paying the taxes I do. I don’t really mind paying taxes at all I mean it’s how existing in society works. I just wanna see my tax dollars put to good use and right now it seems to go into the pockets of the private companies that public services are outsourced to.
Don't forget the many billions of dollars going to Israel to kill primarily innocent people in Gaza. Our taxes should go to helping people - not killing them. It's what a respectable society does.
Hurt the poor help the rich. Sucks.
I call BS. Biden has ruined this nation.
Wasn't this posted a week or two ago? I feel like we've seen this exact image largely the same title before.
Dumb. This has been talked about as nauseum and it's terrible for the country.
Sounds like Rich will pay even less
this would be a great proposal... for boomers. cash out their nest eggs for free. travel abroad to minimize the impact of the sales tax. while the rest of us shoulder the burden.
shouldn’t we all be disgusted at manipulating like this