[Video] Fox News: Should Income Tax Be Replaced With A Sales Tax? (Rand briefly mentioned)

[Confederate]

I think it's really great how in a Fox News segment out of nowhere Rand is mentioned. This would never happen with Ron. It shows that Rand is making great inroads with mainstream Republicans and with the 'right-wing' media.


http://www.youtube.com/watch?v=qtAnryZSMxM

With regards to the actual topic, I strongly favor a consumption tax (preferably sales tax instead of VAT) as opposed to a tax on income. All taxes are destructive, but in terms of morality and economics a sales tax is much less bad than income or property taxes.

What do you all think?

[AGRP]

But Fox News is pro-republican and they dont like taxes.

[TheTexan]

Talking about revenue-neutral tax changes is a waste of breath

[SpreadOfLiberty]

I agree. A consumption tax is quasi-voluntary and allows for more economic prosperity.

I am not for the rebate portion of the fair tax all things equal, however I think if he could argue as Friedman did for having a negative income tax replacing all other welfare, the rebate system guaranteeing income above the poverty line would be much more efficient and less destructive than our current system of thousands of different programs.

I used to (until recently) argue that in order to help a sales tax be created we could exempt things like food and medicine, but now I realize that we would get back to a complicated and corrupt tax system just as quickly as we ended it.

[TheTexan]

I agree. A consumption tax is quasi-voluntary and allows for more economic prosperity.

It's about as voluntary as the income tax.

If you want a quasi-voluntary tax, look to tariffs

[SpreadOfLiberty]

Talking about revenue-neutral tax changes is a waste of breath

No it isn't. It's a lot more complicated than that.

I would argue that with a consumption tax, American's would demand lower taxes.

[SpreadOfLiberty]

It's about as voluntary as the income tax.

If you want a quasi-voluntary tax, look to tariffs

Well, you do have some option of choice. And used goods are not charged.

All things being equal I would prefer tarriffs, however I think they would breed trade and physical wars that wouldn't be worth it, and also wouldn't provide enough revenue for what people want(not to mention our debt).

[TheTexan]

I would argue that with a consumption tax, American's would demand lower taxes.

Ha ha ha. You're a riot

[dinosaur]

I would argue that with a consumption tax, American's would demand lower taxes.

Yes, lets just make sure that the consumption tax is added on at the register, so that people can see how much they are paying every time. That would keep taxes lower.

And can we please abolish the 16th amendment and the IRS as a condition of allowing this tax replacement?

[Aeroneous]

The point that is made in the video about getting the worst of both worlds without a Constitutional amendment has got some validity. Not that anyone pays attention to the Constitution anyway.

[SpreadOfLiberty]

Ha ha ha. You're a riot

Everyone would feel the burden. Poor, rich, middle class.

Raise taxes, you make everyone angry. Hard times? Help us by lowering our taxes.

American's perception of reality is so distorted with regards to how our government is funded. Half don't pay taxes, most think we can just get the rich to pay their fair share. The politically connected rich get exempted.

Along with a prohibition on borrowing(with war exception), Americans won't want to pay for a government as big as it is today.

[SpreadOfLiberty]

Yes, lets just make sure that the consumption tax is added on at the register, so that people can see how much they are paying every time. That would keep taxes lower.

And can we please abolish the 16th amendment and the IRS as a condition of allowing this tax replacement?

Abolishing the 16th is a requirement for adding any additional taxes.

[Confederate]

Yes, lets just make sure that the consumption tax is added on at the register, so that people can see how much they are paying every time. That would keep taxes lower.

And can we please abolish the 16th amendment and the IRS as a condition of allowing this tax replacement?

That's a good point. In Europe the sales tax is always included in the price, you only see how much tax you paid if you look at your receipt.

[AGRP]

I agree. We should create a stamp act.

[TheTexan]

Everyone would feel the burden. Poor, rich, middle class.

Raise taxes, you make everyone angry. Hard times? Help us by lowering our taxes.

American's perception of reality is so distorted with regards to how our government is funded. Half don't pay taxes, most think we can just get the rich to pay their fair share. The politically connected rich get exempted.

Along with a prohibition on borrowing(with war exception), Americans won't want to pay for a government as big as it is today.

Texas has a state sales tax. It's never gone down. Only up.


SALES TAX. Texas has both a state and a municipal sales tax. The state sales tax, called the Limited Sales and Use Tax, was first enacted in 1961 by the Fifty*seventh Texas Legislature, to be effective September 1, 1961. Although it was not the first sales tax in Texas-before that time there had been a sales tax on certain items such as motor vehicles, gasoline, cigarettes, etc.-the Limited Sales and Use Tax in 1961 was the first broad*based tax in the state, although it was limited in the sense that it provided for some exemptions, such as groceries, medicines, agricultural implements, services (as such), and others. The rate of tax initially set in 1961 was 2 percent of the retail sales price of all tangible personal property not specifically exempted. The legislature changed the rate to 3 percent in 1968, 3¼ percent in 1969, and 4 percent in 1971. The rate was further increased to 4.125 percent in 1984, 5.25 percent in 1986, 6 percent in 1987, and 6.25 percent in 1990. As of 1995 no further increases had been made. The general sales tax had become the foundation of the Texas tax system, accounting for almost 60 percent of all state tax revenue by 1992. Revenue had increased from $149 million in 1961 to $7.59 billion in 1990. The retailer collecting the tax could deduct 1 percent of the quarterly tax due as reimbursement for collection. An additional 2 percent discount was allowed the retailer who made prepayment of the tax based upon a reasonable estimate of the liability for the quarter in which prepayment was made.

Incrementally up. That's how these things work. Americans won't even notice.


No it isn't. It's a lot more complicated than that.

I would argue that with a consumption tax, American's would demand lower taxes.

Americans wouldn't demand shit.

[Confederate]

Texas has a state sales tax. It's never gone down. Only up.

Incrementally up. That's how these things work. Americans won't even notice.

6.25% is incredibly low for a sales tax and considering that Texas has no income tax it's a good deal.

[TheTexan]

6.25% is incredibly low for a sales tax and considering that Texas has no income tax it's a good deal.

6.25% isn't "incredibly low." Maybe relative to other states and other taxes. But that's still a fairly large chunk.

Either way, the law of incrementalism still applies. 6%->6.25% or 17%->17.25%.... you won't see anybody getting all up in arms "demanding" anything

[Aeroneous]

Americans wouldn't demand shit.

And even if they did, the media would just start airing new "analysts" who would change the public's idea of what needs to be demanded.

[Confederate]

6.25% isn't "incredibly low." Maybe relative to other states and other taxes. But that's still a fairly large chunk.

Either way, the law of incrementalism still applies. 6%->6.25% or 17%->17.25%.... you won't see anybody getting all up in arms "demanding" anything

Texas has the 6th lowest tax per capita, and it's only $50 more than the lowest. (Georgia is the lowest at $1639, Texas is 6th at $1682, New York is 43rd at $3490 and Alaska is first at $7662, although the vast majority in Alaska is from oil revenues since they have no sales or income tax on individuals)

[Danke]

6.25% is incredibly low for a sales tax and considering that Texas has no income tax it's a good deal.

They aren't bad overall, but they do get you with property taxes and car registration.

[TheTexan]

Texas has the 6th lowest tax per capita, and it's only $50 more than the lowest. (Georgia is the lowest at $1639, Texas is 6th at $1682, New York is 43rd at $3490 and Alaska is first at $7662)

Yes, Texas is a good state. But you're still missing the point. Taxes only go up. Incrementally. Regardless of how that tax is implemented.

The only exception I know of are tarriffs. By their very nature, they can only tax so much before people begin to buy domestically.

[itshappening]

Forbes makes a good point, unless the constitution is amended then you end up with both and that aint going to happen.

The only best interim solution is to have a Flat tax of say 20% and a one page tax form so a child can fill it out. At a stroke you eliminate the need for accountants and have a very simple tax code. I would also end all the corporate tax breaks for this interim period and probably apply the same rate as the corporation tax.

I think this would raise significant enough revenue and also provide a balance to spur economic growth in the private sector, then i'd look at reducing the size of spending and of the taxes themselves.

[TheTexan]

The only best interim solution is to have a Flat tax of say 20% and a one page tax form so a child can fill it out. At a stroke you eliminate the need for accountants and have a very simple tax code. I would also end all the corporate tax breaks for this interim period and probably apply the same rate as the corporation tax.

Yes, I will say it would be a more efficient means of theft.

[Aeroneous]

At a stroke you eliminate the need for accountants and have a very simple tax code.

Then you're going to get some idiot in Congress that uses the same argument they used for not cutting the contract for the thousands of tanks the Army didn't want. "Well we can't pass this common sense, very desirable law because it would put some people out of work."

[itshappening]

Yes, I will say it would be a more efficient means of theft.

Outright abolishment is not going to happen unless the constitution is amended and that is not going to get through congress so the only way if you're president to change the system is to make it a flat tax and then institute spending cuts and then start bringing the rate down over time to an optimal level.

[TheTexan]

Outright abolishment is not going to happen unless the constitution is amended and that is not going to get through congress so the only way if you're president to change the system is to make it a flat tax

This is rearranging deck chairs. Does nothing. May have short-term economic effects as people and businesses adjust, but once it balances any revenue neutral tax change has zero net long term effect.


and then institute spending cuts and then start bringing the rate down over time to an optimal level.

I don't see how changing the tax code would make it any easier to pass spending cuts.

[itshappening]

you raise a good point, a libertarian president would face an obstinate congress who would stifle any reforms.

But the president can rule by decree to some level and demand his budget be passed. Otherwise, he could maybe get away with executive orders to shut down agencies but the IRS couldn't be shut down because the constitution specifically authorizes an income tax.

Didn't they want to impeach Nixon because he didnt spend all the money the congress appropriated ?

[Occam's Banana]

With regards to the actual topic, I strongly favor a consumption tax (preferably sales tax instead of VAT) as opposed to a tax on income. All taxes are destructive, but in terms of morality and economics a sales tax is much less bad than income or property taxes.

What do you all think?

You'll just end up with BOTH a federal consumption tax AND a federal income tax. Anyone who thinks otherwise is deluded.

Opening up new venues for taxation (such as a federal consumption tax) is absolutely nuts. Anyone who thinks it will work out for the better is crazy.

American farmers learned this lesson the hard way. They made a deal with the Devil in the early 1900s: in exchange for their support for a federal income tax, tariffs on manufactured goods would be significantly reduced.

Care to guess how that worked out for them? Or for the rest of us?

FROM: http://www.lewrockwell.com/orig3/leef11.1.html

In that terrible year, 1913, a deal was struck in Congress, whereby representatives from the farm states would support the income-tax amendment in exchange for a reduction in tariff rates. DiLorenzo comments on this Faustian bargain:


American farmers would soon regret their support for the government’s income tax; by 1930, tariff rates had risen to their highest rates ever – an average of 59.1 percent. Federal politicians realized that with all that tax revenue coming in, they could afford to enact prohibitive tariffs as a way to buy political support from various manufacturing industries.
The income tax gave the federal politicians a new stream of revenues that they could easily increase to meet the “needs” of the government. At first the rates were low and applied only to a few Americans. Opponents contended that the tax was dangerous – what would prevent politicians from increasing the rates to frightfully high levels, say 10 percent? Tax advocates scoffed and said those concerns were just scare tactics. And within 30 years, the highest income-tax rate reached 90 percent.