Setanta wrote:OK, i was in the middle of something else, so here's why i consider this a stupid idea.
First of all, you are not going to be able to replace current revenues immediately with a sales tax--so even if you did get one passed, never mind an intelligent and sane bill to cover all the necessary contingencies so that it is not regressive, you would have to have it tandem with income tax, in the beginning, because otherwise, the revenue short-fall would shut down government. In practical terms, you can bet that any revenue which the government gets (and that includes the boys and girls in Congress), they are going to keep. The odds are very good that the income tax would never truly go away. It would have to be maintained at least until the death tax kicked in to make up the revenue short-fall, and i doubt that a death tax could do that, unless it were nearly 100% confiscatory.
I gather you are answering the Title of the thread, not my initial post. The proposal is actually VERY progressive, in that Tax on poor people is essentially negated, and the poorest of the poor in the progressive version actually receive enough for basic sustenance, even if they earn NO MONEY. The Lion's share of the revenue comes from the Sales Tax itself, not the Death Tax. Even a 100% Death Tax could only ever really provide about a quarter of what our government spends. At 50%, it is slightly less than what the wealthiest Americans are already paying (in theory), so there is no need for a massive grandfather term.
As for shortfalls; quite the contrary. The day the system is switched on; it actually puts the money in the government's hands faster than the Income Tax does today. Sales Tax is paid monthly, where Payroll and Income Taxes are only paid quarterly
and in some cases, annually. Savvy Tax payers short their contributions throughout the year and pay the balance after the end of the year (This is essentially free money, in exchange for a tiny bit of paperwork. Everyone should do this.). There should be no need to grandfather the Income Tax
but I agree safeguards should be taken to prevent both from being instituted. Perhaps a constitutional amendment could provide this protection?
Setanta wrote:One of the reasons the tax code is a byzantine nightmare is because of all the exceptions and deductions which are available. Even those with the most altruistic motives can be exploited. Members of Congress routinely add "invisible" riders to bills which exempt the pet projects of their constituents from taxation, and the necessary regulation to prevent the sales and the death taxes from being either regressive or confiscatory would be subject to the same Congressional chicanery.
Again, couldn't this be prevented with a well written, though simple, constitutional amendment
thereby putting any proposed changes through the rigmarole of constitutional changes?
Setanta wrote:For all the flaws of the income tax, i doubt that the government could ever do without it. Not the government we have today, which not only provides social welfare (a relative bargain, it costs less than operating the Federal prisons), it provides corporate welfare either with direct or indirect subsidies, or through tax code manipulation which favors certain industries. The income tax could not be dispensed with overnight, and the potential for abuse of a concurrent income and sales tax would be too great, and so would the temptation for Congress to take advantage.
I agree wholeheartedly that the potential of concurrence is great, but would like to believe it could be regulated away. Considering the Paris Hilton's and the beneficiaries of Tax loopholes are the only people who stand to lose anything by this proposal, the popular vote should be overwhelmingly in favor.
The progressive version, which I think is the one worth discussing, also brings some interesting side effects. Since it's vested heavily in kickbacks (or Refunds) to the Tune of almost 25% of the total colleted; it only benefits Citizens of the United States. Only holders of Valid Social Security Cards could receive their requisite kickbacks. Illegal aliens could not. Delinquent Child Support obligations could be garnished along with everything from court ordered obligations to delinquent student loans. Granted it's still a far cry from a comprehensive solution to these collections, but it is certainly more effective than withholding your average Income Tax Return. It provides an opportunity to withhold an average of about $160,000 (in today's money) throughout the average delinquent person's life. 20% of Americans have taken some college courses (about 60 million people) and 7% percent of them are in default on their loans
which equates to about 17 Billion in potential annual asset recovery in Student loans alone. That's not chickenfeed
and the recovery effort would cost the government nothing.
Damn it. I may be back with numbers that do. Sorry.
