Suspend the income tax for 3-4 years (Ron Paul)

#2
#2
It's more direct than any other stimulus program but still nutty if you give a rat's rear about deficits
 
#3
#3
Those 3-4 years would give us plenty of time to scrap the current income tax in favor of a proportional sales tax or a value added tax. :D
 
#5
#5
Bam, tell me how that fits with your Keynesian drivel? Krugman should be pumped. G stays high with borrowed cash and demand up to boot. Talk about inflation. We'd have a bumper crop of it.

Bam's in.
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#6
#6
BigPapaVol said:
Bam, tell me how that fits with your Keynesian drivel? Krugman should be pumped. G stays hig. With borrowed cash and demand up to boot. Talk about inflation. We'd have a bumper crop of it.

Bam's in.
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Doesn't count if it's not gubment spending - that is what fiscal stimulus is all about.
 
#9
#9
I like the idea in theory. But VBH is right, the balance sheet would be horrendous.
 
#10
#10
lumberjack4 said:
A VAT tax would be the worst idea ever.
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It is no different than a sales tax. It is just collected incrementally at each sale, rather than the typical sales tax that is collected only at the retail level.
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#12
#12
paul1454 said:
It is no different than a sales tax. It is just collected incrementally at each sale, rather than the typical sales tax that is collected only at the retail level.
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I'm all in favor of replacing the income tax with a national sales tax, to me it makes much more sense. I don't like a VAT because it seems easier to exploit since you don't actually see the tax rate you are ultimately paying. In a sense the taxes become hidden because you don't see what's paid at every step of production, whereas with a sales tax you clearly see the tax rate that you are paying.
 
#13
#13
lumberjack4 said:
I'm all in favor of replacing the income tax with a national sales tax, to me it makes much more sense. I don't like a VAT because it seems easier to exploit since you don't actually see the tax rate you are ultimately paying. In a sense the taxes become hidden because you don't see what's paid at every step of production, whereas with a sales tax you clearly see the tax rate that you are paying.
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That is the big hit on value added taxes. However, with the structure I of the Internal Revenue Code, how many people can say what their marginal rate of tax is? Hardly anyone. The difference between the VAT being hidden is that (1) everyone will know the rate; and (2) your purchases would be the exact same as they are now - i.e., if the costs outweigh your expected
benefit you don't make the purchase. Eliminating the income tax would
do wonders toward reducing the trade deficit because corporate taxes raise prices of goods and make domestic companies uncompetitive overseas. A VAT does not raise prices on exports.

I tend to believe the anti-VAT sentiment rests in the fact that (1) Pelosi recently recommended it; and (2) that many European countries known for having huge goverment entitlement progams have adopted VATs. To the first, let me say I hate Pelosi more than any poliyltician. Just because she suggested this recently doesn't make it a liberal idea. In fact, it is just the opposite. The VAT is supported by nearly every conservative US economist over the income tax. It also does what most conservatives desire - gets rid of progressive taxation and taxes everyone at a flat rate. Finally, it encourages saving because unlike the income tax, returns on investment won't be subject to a consumption tax. As to the second point of contention, these countries had huge goverments before the VAT. Moreover, an income tax hasn't
prevented the US from turning into a welfare state either.
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#15
#15
droski said:
the problem with the VAT is that the black market would go nuts.
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I wonder if it really would be that bad. At one of the highest state sales taxes in America, I haven't really seen evidence that Tennessee has a greater problem with people avoiding a consumption tax by resorting to black market sales than any other state. In fact, the problem would be diminished in a VAT compared to a sales tax. Avoiding a value added tax requires collusion across the entire line of the supply chain. If the grocery store owner pays the tax at the point of sale on a gallon of milk, then he will want the invoice from the diary plant that sold him the milk so he only pays his share (say the tax is 10%, on a $2.00 gallon of milk he would owe $.20 but would get a credit for any amount of taxes paid through the supply chain, so he would desire the dairy plant to pay its tax so he gets his credit).
 
#16
#16
the rise in internet sales sure has a lot to do with the sales tax issue. i think it would be huge if the tax was triple what it is currently.
 
#17
#17
I agree that the current tax structure makes it hard for people to realize the rate that they are paying. When people never see 25%-35% of their paycheck they don't really grasp what they are actually paying. This isn't good, in my opinion. The VAT essentially does the same thing. Yeah you know the tax rate is 10% or whatever, but the fact that you don't overtly pay that 10% brings us back to the same problem our income tax rates have. With a sales tax, you clearly see the tax rate you are paying, which in turn makes people more cognizant of the taxes they are paying, which in turn makes it more difficult for politicians to get away with tax increases.
 
#18
#18
lumberjack4 said:
I agree that the current tax structure makes it hard for people to realize the rate that they are paying. When people never see 25%-35% of their paycheck they don't really grasp what they are actually paying. This isn't good, in my opinion. The VAT essentially does the same thing. Yeah you know the tax rate is 10% or whatever, but the fact that you don't overtly pay that 10% brings us back to the same problem our income tax rates have. With a sales tax, you clearly see the tax rate you are paying, which in turn makes people more cognizant of the taxes they are paying, which in turn makes it more difficult for politicians to get away with tax increases.
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I agree. I want to make clear, I'm for both - a sales tax or a VAT.
 
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