Law GOP Propose elimination of income/payroll taxes and a national sales tax of 23%

[helltoupee]

https://www.yahoo.com/finance/news/...-idea-for-a-national-sales-tax-210400152.html

It’s a bill that is opposed by Speaker Kevin McCarthy (R-CA), unlikely to pass the GOP-controlled House of Representatives, and has approximately 0% chance of becoming law anytime soon.

"This so-called fair tax plan is the craziest yet. It's a real doozy," Chuck Schumer said on Wednesday as the Senate Majority Leader took time out of his schedule to appear alongside House Democratic Leader Hakeem Jeffries (D-NY) for a press conference devoted to the subject. "Just the biggest lollapalooza I have ever seen around here."

Yet even voices sympathetic to Republicans urge the party to back away.

Grover Norquist, a tax reduction advocate, told Semafor it was “a political gift to Biden and the Democrats;" the conservative Wall Street Journal editorial page called it “masochism;" and Steve Forbes of flat tax fame called it a "belated, but huge Christmas present" for Democrats.

To top it off, Larry Kudlow, the former Director of Donald Trump's National Economic Council, said it "really is a lousy idea" when he interviewed McCarthy on Tuesday.

What’s in the ‘Fair Tax Act’
The bill itself is called the Fair Tax Act and was formally introduced on Jan. 10 by Carter. As of Wednesday afternoon, the bill had amassed 23 co-sponsors.

The bill would eliminate all income taxes — from the payroll tax to corporate taxes to personal income taxes and more — and would also eliminate the Internal Revenue Service, just the latest salvo in the GOP’s feud with the tax-collection agency.

And while Americans may like the idea of no longer filling out tax forms each April, the bill would replace the trillions of dollars lost with a national sales tax.

The rate would begin at 23% in 2025 and could increase. An analysis of the plan from the Brookings Institution found that a rate around 30% — on top of existing state sales taxes — would be needed to cover the losses.

Economists have also criticized the plan for lowering the the tax burden from high-income earners and corporations and shifting the onus to middle- and lower-class Americans who spend a much higher percentage of their monthly income on goods and services.

The Tax Policy Center found the idea would be a hike for 80% of Americans and a tax cut for the richest Americans. The top 20% would go from paying 84.2% of all federal income taxes to 65.1% under a theoretical federal retail sales tax.

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Trickle down seems to be the ONLY thing that the GOP knows how to do, yet millions of hard working Americans are convinced that Republican politicians are looking out for their best interests.

And before any of you wise guys jump in and say "ya but the rich are paying the most in taxes!", ask yourself how much of the national wealth they command. If we sit down to have dinner and I eat most of the dinner, would you not expect me to pay most of the bill?

 

[jx820]

I guess calling it the "kill the middle class act" wasn't catchy?

To be completely fair to the GOP, this is going to go to committee and have a quiet funeral. It'll never see a floor vote and never become law.

It's a media trick that Desantis seems to have made big. Loudly and in front of the media you push policy that panders to the base, but will never pass or hold up in court. Get points for being couragous and decisive. Then quitely bury said policy in a shallow grave to little media coverage. It's like 90% upside.

 

[nostradumbass]

I guess calling it the "kill the middle class act" wasn't catchy?

I was told Sweden, Norway and Denmark are the perfect system for the middle class. They have a VAT tax higher than this, AND massive income taxes that kick in at middle class incomes, but a VAT tax alone that is still lower than those places is going to "kill the middle class"?

 

[Matsukaze]

Anything Shifty Schumer is pushing is a bad idea

 

[jx820]

I was told Sweden, Norway and Denmark are the perfect system for the middle class. They have a VAT tax higher than this, AND massive income taxes that kick in at middle class incomes, but a VAT tax alone that is still lower than those places is going to "kill the middle class"?

Oh, if you want to adopt the entire economic system with the full social safety net that's one thing. Unless I've misunderstood, this bill does not include the rest of those economic and social policies.

 

[gspieler]

So basically, a tax cut for the rich? Great idea. It’s always worked well in the past.

 

[Rational Poster]

I was told Sweden, Norway and Denmark are the perfect system for the middle class. They have a VAT tax higher than this, AND massive income taxes that kick in at middle class incomes, but a VAT tax alone that is still lower than those places is going to "kill the middle class"?

You know they use those taxes to pay for things like universal health care, higher education, paid maternal leave, etc which we don't have?

 

[M3t4tr0n]

I was told Sweden, Norway and Denmark are the perfect system for the middle class. They have a VAT tax higher than this, AND massive income taxes that kick in at middle class incomes, but a VAT tax alone that is still lower than those places is going to "kill the middle class"?

Why don't we just completely adopt the rest of their government along with it then?

 

[nostradumbass]

Oh, if you want to adopt the entire economic system with the full social safety net that's one thing. Unless I've misunderstood, this bill does not include the rest of those economic and social policies.

You know they use those taxes to pay for things like universal health care, higher education, paid maternal leave, etc which we don't have?

Well then we aren't talking about taxing anymore, we're talking aabout the spending side.

If you'd like to discuss what can be cut to make room for spending you do want, then happy to have that discussion, and might even agree with you on some of it.

 

[Rational Poster]

Well then we aren't talking about taxing anymore, we're talking aabout the spending side.

Actually you did bring up the spending side of things when you pointed to the quality of life those places enjoy.

Those places are used as an example because they tax and spend on things that help the majority of people there live longer, healthier, and ultimately happier lives.

I mean only a completely disingenuous asshole would say the tax rate is the only thing that makes those places exemplary.

 

[jx820]

Well then we aren't talking about taxing anymore, we're talking aabout the spending side.

Agree. Different tax policies work in different social and economic structures.

In this social and economic system, taxing the money people need to survive and more importantly money they put back into the economy, and not taxing the money that people tuck away in non-fluid instruments, is a war on the middle class. It is the exact inverse of how we should be handling tax policy which is to say in inverse relationship between a dollars utility and it's tax rate.

 

[nostradumbass]

Agree. Different tax policies work in different social and economic structures.

In this social and economic system, taxing the money people need to survive and more importantly money they put back into the economy, and not taxing the money that people tuck away in non-fluid instruments, is a war on the middle class. It is the exact inverse of how we should be handling tax policy which is to say in inverse relationship between a dollars utility and it's tax rate.

Actually you did bring up the spending side of things when you pointed to the quality of life those places enjoy.

Those places are used as an example because they tax and spend on things that help the majority of people there live longer, healthier, and ultimately happier lives.

So again, it's not the 23% VAT tax that's the problem, it's how tax money is spent.

You're arguing that the government wastes the money they already get, so why would anybody of any income level want more of their money flushed down the drain?

The whole argument seems to be "waste their money, not mine".

 

[White Whale]

Getting rid of the IRS is a good thing. The fact both sides oppose this bill show it will likely help average Americans.

 

[Rational Poster]

So again, it's not the 23% VAT tax that's the problem, it's how tax money is spent.

You're arguing that the government wastes the money they already get, so why would anybody of any income level want more of their money flushed down the drain?

The whole argument seems to be "waste their money, not mine".

No the problem is you brought up these other countries for no practical purpose in the context of the actual discussion.

In context, this tax proposal will both gut revenue and shift even more of the tax burden on the middle class.

 

[Terry Noonan]

Pls do a flat tax on income (not unrealized). No sales tax.

 

[D3thr0n3d K1ng]

I was told Sweden, Norway and Denmark are the perfect system for the middle class. They have a VAT tax higher than this, AND massive income taxes that kick in at middle class incomes, but a VAT tax alone that is still lower than those places is going to "kill the middle class"?

Those countries dont have anyone making less than 20-25$/ hour. Are you prepared to raise the MW as well?

 

[Jack V Savage]

So again, it's not the 23% VAT tax that's the problem, it's how tax money is spent.

A VAT is actually a dumb tax, but the harm is offset by other good policy. I think that's kind of tough for some people to wrap their heads around.

The cost of a tax is the deadweight loss rather than the dollar amount (if the gov't spends the money taxed, it just goes back into the private sector, obviously). But something like a VAT reduces the value of transactions to buyers and sellers, which makes them less likely (and presumably every exchange is seen as mutually beneficial so fewer of them means the nation is relatively poorer). On top of that, the big objection to the move here is that Republicans want to raise taxes on 70-90% of the population in order to pay for another huge cut for rich people. Who is going to like that?

 

[nostradumbass]

No the problem is you brought up these other countries for no practical purpose in the context of the actual discussion.

In context, this tax proposal will both gut revenue and shift even more of the tax burden on the middle class.

I brought up those countries because they have even higher VAT taxes than what is proposed.

Where is the revenue going, and what is the "burden" for? I know you want to disagree with me, but you're placing no "burden" on spending, and just want the argument to be whose money you want to be wasted.

 

[Jack V Savage]

Getting rid of the IRS is a good thing. The fact both sides oppose this bill show it will likely help average Americans.

??? This is a Republican proposal--yet another tax cut for the rich along with a tax increase on almost everyone else. Also seems designed to slow economic growth.

 

[nostradumbass]

Those countries dont have anyone making less than 20-25$/ hour. Are you prepared to raise the MW as well?

Denmark minimum wage is $18, Sweden and Norway don't even have one.

I'm not "prepared" to do anything because I don't work for the government or make tax policy. I said the US should clean up their spending before demanding more money.

People would be more willing to pay more if they felt they got more for it. They don't, so now it's squabbling over whose money gets set on fire.