Originally Posted By WilliamK99 Why are most people in America against a Nationwide sales tax or VAT as they call it in Europe. It's probably the fairest tax system out there, as those who make more money will obviously spend more. So I am asking, why are people against this sort of tax when it's fairer than our current tax code with its millions of loopholes...
Originally Posted By ecdc I'm always willing to read up on stuff or listen, but my initial reaction is that this is just another version of a flat tax. A flat tax at first glance seems like the most fair, reasonable thing to do, but when looked at closer always ends up hurting the poor or even the middle class the most.
Originally Posted By skinnerbox Sales-based taxes disproportionately hit lower income citizens harder, taking away a greater percentage of their overall income which they need for mere survival. Higher income citizens can afford to pay sales-based taxes more easily, because they're not living hand to mouth each week. The working poor spend a greater percentage of their income purchasing goods they need for basic living, so the sales tax puts a greater burden on them. That's why people are against it. The economic engine of this nation is built on consumerism, which is mostly driven by the bottom 50%. Sales-based taxes, therefore, disproportionately hit them harder. And that's not fair.
Originally Posted By WilliamK99 Sales-based taxes, therefore, disproportionately hit them harder. And that's not fair.<< So we'll continue with the current tax code which those with money can find ways to circumvent the system? If a person buys a 500,000 car, he is payng tax on that car, more so than the guy who buys the 25,000 Honda Civic. It doesn't hit the poor and middle class more. Maybe Americans should stop buying frivolous crap all the time and save their money? What we consider poor is actually living comfortably in many parts of the world. How many poor people in China have cell phones, color TVs, cable Internet etc? How many poor people in America think those things I mentioned are a god given right. Quite a few...
Originally Posted By Dabob2 <It doesn't hit the poor and middle class more.> It does if the basic aren't exempted. Food, clothing, shelter (rent), etc. Yes, the wealthy may pay more for their food than the poor do, but they make 100 times more money and they sure don't pay 100 times more for their food. That's why the VAT is often considered not even flat, but regressive. Just the opposite of the progressive income tax (which isn't as progressive as it used to be, but still). Some countries make the VAT work by exempting the basics, and of course use it as one component of a very different tax system that taxes far more than ours but also provides more benefits - notably nationalized health care, of a degree far exceeding the relatively modest changes that "Obamacare" represents. The trouble here is that when conservatives propose a VAT, it normally is in a way that DOES hit the middle class and poor harder, and then liberals declare it a non-starter. If we were to have it, it would have to be a part of a complete overhaul to taxes in general, but I haven't seen ANY serious proposal out of Congress with details - just periodic vague detail-free trial balloons that don't stay aloft for long.
Originally Posted By ecdc >>It doesn't hit the poor and middle class more. Maybe Americans should stop buying frivolous crap all the time and save their money?<< Those are two separate issues though. We could have a whole big discussion about American consumer entitlement and materialism. And we could talk about advertising as a partial cause. But when it comes to a sales tax, yes, it hits the poor much harder. If I make $1,000,000, then buy a $100,000 car that had 10% sales tax (go with it, I'm lousy at the maths), I still have $890,000 left. If I make $20,000 a year, buy a $2,000 used cat with 10% tax, now I have $17,800 left. One feels the tax much harder than the other, despite the larger numbers.
Originally Posted By WilliamK99 I agree, basics should be exempt just likt it is in Europe. I lived in Germany 6 years, and all food from stores was exempt, food in restaurants had a lower rate of I believe 9% or so and all other items had 19% VAT.
Originally Posted By ecdc >>buy a $2,000 used cat<< Some people are apparently really bad with money.
Originally Posted By Terminus If I had $2,200 and bought a $2000 used cat, with a 10% tax, I'd have nothing left. If I had one billion dollars, and bought a $2000 used cat, with a 10% tax, I still would have $999,997,800. Yeah, having more money means you can buy stuff and have more money left. Makes sense. That's part of the advantage of having money.
Originally Posted By fkurucz New cat prices are outpacing inflation, hence the high resale prices for used cats ;-)
Originally Posted By fkurucz >>Yeah, having more money means you can buy stuff and have more money left. Makes sense. That's part of the advantage of having money.<< It's good to be the King!
Originally Posted By Kar2oonMan >>Maybe Americans should stop buying frivolous crap all the time and save their money?<< Buying that "frivolous crap" creates jobs. No question you're right that we don't save enough, but trips to Disneyland, going to a movie once in awhile, buying an iPad -- all that stuff is a huge part of what makes the economy run. That's why, after 9/11, one of the first things the Bush Admistration encouraged was people to keep shopping. He got blasted for it, but it does matter.
Originally Posted By TomSawyer Would the sales tax only be on the first sale of an item, or would we pay sales tax on the sale of used items as well? How do we report on the sale of used items? What do audits look like under a sales tax - do we keep track of our income, our account balances and our purchases for the year to prove that we paid all of the taxes that we owed? Is the tax only on the finished product, or is it paid every time the item changes hands? (Which would be more like a European-commie-socialist style VAT) If there is some form of a sales tax rebate to help the poor, do we then have to track all of our purchases and report them to the government? Or does the government just send a rebate check out periodically after we report on our income? How do we stop a black market from arising?
