[Tyler_JC]

The average person would pay a lot less under a consumption tax than under an income tax. The sales tax would only need to be around 20%. Almost all people who pay taxes, end up paying more than 20% of their income to the government. This would lower the tax burden on the average person. Some people pay very little income tax, they earn very little money, and would pay very little into the sales tax as well. Another group of people pay very little income tax. They are the super rich. They put their money in tax defered accounts and live on the dividends. These people spend lots of money and would suddenly be subjected to paying taxes. This would raise revenue and balance out the elimination of the income tax.

If you want to get rid of the IRS, I'm all for it.

[Such]

how much money would we save by eliminating the IRS in favor of a universal consumption tax?

[Tyler_JC]

~$150,000,000,000.

That's the amount of money spent to prepare America's taxes. This number includes the budget of the IRS ($10 billion) and the amount of money spent by the SEC. It also includes the tens of billions spent by individuals for tax preperation.

[maverickdoc]

$this->bbcode_second_pass_quote('Tyler_JC', '~')$150,000,000,000.

That's the amount of money spent to prepare America's taxes. This number includes the budget of the IRS ($10 billion) and the amount of money spent by the SEC. It also includes the tens of billions spent by individuals for tax preperation.

[Tyler_JC]

It keeps my mother (and her workers) employed.

But you're right, it is a waste.

[pip]

A consumption tax would be a tax break for the wealthy only. The top 1% pay 22.7% of the taxes. The top 10% pay 50% of the taxes. There is no way the top 10% consume 50% of anything. The top 20% pay 65% of the taxes. Same thing.

However, the bottom 20% only pay 5.4% of the tax burden. They would have to see an increase with a consumption tax.

And these percentages have trended in favor of the poor over the last 20 years. I don't understand the liberal arguement that the rich don't pay their share.

http://www.ncpa.org/edo/bb/2004/20040407bb.htm

[TrueKaiser]

$this->bbcode_second_pass_quote('', 'A')nd these percentages have trended in favor of the poor over the last 20 years. I don't understand the liberal arguement that the rich don't pay their share.

[JoeW]

$this->bbcode_second_pass_quote('Tyler_JC', 'T')he average person would pay a lot less under a consumption tax than under an income tax. The sales tax would only need to be around 20%.

[Yossarian]

What about the existing state sales tax. Do you think that will just disappear?

[Yavicleus]

I would far preffer a consumption tax, and I am an American.


This would just mean I could buy stuff on the black market, and pay zero taxes.

[pea-jay]

A consumption tax would be means to take from the poor and give to the rich. I pay no income taxes now. I don't make enough to reach the point where I must start paying. Therefore I have a zero tax liability (FICA excluding). Now tell me again how instituting a consumption tax would LOWER my tax burden. Alan Greenspan must be senile by this point.

Even if exemptions were made for food and clothing, the poor still buy other items. Those with small children need diapers, baby seats etc. Other items like furniture, toys, school supplies, fuel are purchased on a regular basis. Again, tell me how these folks will pay less.

The national retailers are against this, and you can be assured so will Walmart. A 10 or 20% increase in prices is going to cut into their bottom line.

Perhaps some bastardized arrangement may be developed where all of those under a certain income level are kicked back all of their consumption taxes. But now you are making it complex again, which goes against the original arguement for tax simplicity.

Our tax code is complex for a reason--its a means for implementing social policy. We use it to redistribute income, promote certain activities (tax credits for mortgage interest) and discourage others (sin taxes). As long as politicians, lobby groups, businesses and individuals have an interest in maintaining their policy goals, dont expect change.

Expect the polling numbers to fall once people learn more about this. Especially if you add that it will make their gas 10 or 20% more expensive.

[DomusAlbion]

There is quite a movement going on in the US for a consumption tax.

http://www.fairtax.org/
http://www.salestax.org/

To me one of the main benefits is that this simplifies the tax process and consequently makes it easier and cheaper to administer. Also it taxes everyone including tourists and the criminal class. To me there is no reason that a government agency should have the right to intrude into my life and that includes reporting on my income.

Death to the IRS.

[DomusAlbion]

$this->bbcode_second_pass_quote('pea-jay', 'E')xpect the polling numbers to fall once people learn more about this. Especially if you add that it will make their gas 10 or 20% more expensive.

[Kingcoal]

I think you guys are missing the point. While the 16th amendment says that Congress can tax income "regardless of source," the amendment says nothing about previous statutes in the constitution. A year after it's passing, the Supreme Court said that because of that reason, the 16th amendment had to be dragged through the filter of previous statutes on taxation. Those statutes are very clear - no direct taxes of USA citizens by the Federal government. It's the reason why you have to sign your rights away when you pay "your" taxes. Think about it, do you have to sign anything when you pay sales tax, property tax or just about any other kind of tax? You don't have to sign anything because you have no choice in the matter.

Because of the "self incriminating" method of income taxes, it is easy to evade especially by rich people. The IRS finds itself facing more and more sophisticated taxpayers. Because of inflation, people are paying very high rates and are spending much more time than previous generations learning how to reduce their liability.

Excise taxes don't require self-incrimination. You simply pay them when you buy beer, cigs, etc. A national sales tax might be able to be classified as an excise tax. This removes billions of dollars worth of record keeping. The IRS can be eliminated and perhaps most importantly, because evasion is much much more difficult, a lot more revenue is brought in.

The other benefit of a consumption tax is a necessary reigning in of the American consumer. Income taxes encourage borrowing and discourage savings. A consumption tax does the opposite. That's why the rest of the world uses them.

[pea-jay]

$this->bbcode_second_pass_quote('', 'T')hat's why the rest of the world uses them.

[I_Like_Plants]

I read somewhere that people who come from a background of privation to the US tend to jump onto the consumer treadmill most enthusiastically. Observations bear this out, from the Russian refugees and Cuban refugees who are most adamant about "The American Way Of Life" (tm) to people I see around here from India and China, who drive new cars, buy their kids every concievable toy and game and gadget.

I came from a background of scrimping and saving and all that, and as soon as I was able to I got as nice a car as I could, etc. I'll admit I have, in the past, done things like buy a "BMW" sweater at the BMW dealership and wear it in public, spend $3000-odd on furniture that I ended up literally giving away when I moved, and most recently, bought a new SUV that I ended up hating, hating the loan, the thing's impact on the environment, my not getting exercise, how it was big and bulky and not fun to drive, etc. I got rid of it recently. I honestly think the underlying reason I got the thing was to prove I could get it.

I have lived on $500 a month, and even less, and looking back I had little worries. My job sucked but at that rate of pay I could have gotten anything else if I wanted. I saved up money, lived within my means, and didn't realize that in strange, anti-american places and cultures this is a good thing. Most importantly, in the culture we're going to all be living in soon.

Right now we have a whole 3rd world, and 2nd world that I lived in (part of which are in the US just not talked about) who feel that a big house, big car, and consuming as much as possible are Heaven. The brainwashing is VERY strong.

There are people who believe in consuming less. Some Americans, very very few, vanishingly so, I think I've met one, maybe two, who believe this. Europeans much more so, because they tend to have a different belief system. I've met far more Europeans than fellow Americans who believe that consuming less is vistuous. Japanese who believe in the traditional values, First Nations people in the US and Canada, other odd groups who have managed to either avoid, not be noticed by, or through extreme strength of resolve, resist the consumerism behemoth.

Here's the problem. As long as Americans are consuming like crazy, people all over the world, and even the poor within America, are going to feel like they're failures if they're not doing the same. And the result is pure worst-case scenario. Ecocide.

We in the "First World" need to lead by example. 1% of us, doing it and doing it successfully and publicizing it well, with blogs, web pages, books, etc., are enough to do it. There are people in the US doing it already, living at least fairly sustainably, but it's something like .01%.

I had no idea that when I was living on $500 or $600 a month take home pay, and saving 10%-15% of it each month, that I was more of a success than if I'd accomplished my dream at the time, working for one of the big corporations and living in the "right" suburb. If I'd known, I'd have stayed right where I was, and worked toward being even less of a "consumer". I just had no idea. The .01% doing it were not enough of a "critical mass" of people living that lifestyle for it to get through to me and, as far as I could tell, the other working poor around me, who all had as their ultimate dream working for a big corp. and living in the suburbs too. But 1% might have done it. 10% will really do it. And Mother Nature's going to make sure 100% of us are doing it pretty soon.

[basketballjones]

People by and large are short term thinkers that's for sure. It's a strange conundrum that the things which are irreplaceable such as water, land and other various natural resources are dirt cheap (get it), but the things that we hoard but can do without (say diamonds) are priced so dearly.

I think it comes down to greed and vanity. Anyone can buy land, but if you can wantonly buy diamonds and jewels then your social status reflects this. Consuming or more appropriately buying cheap trinkets at walmart is the lower class version of buying diamonds. To have more stuff equates to social status. But to quote (i think it was) Pat Buchanon "No nation ever consumed their way to prosperity".

I think europeans will fare some what better in the future, since they have "quality over quantity" type values.

[CrudeAwakening]

I think the urge to acquire status is a pretty primeval instinct that is driving us into this consumerist mess.

Status in modern society is largely about displays of wealth (as it has been for some time). The house you own, the car you drive, etc. Nowadays people are led to believe, through the availability of easy credit, that they can acquire status via consumption. Never mind the debt they get into in the process. The marketers cry out "You want it? Get it now! You deserve it!"

Think of how backward some people think you are if you don't own a cellphone. When someone shows you their new gadget with features x, y, and z, they're really just sending out status signals, and people naturally go "now i need one of those".

It'll take resource constraints of significant proportions to change peoples mindsets, I think.

[CrudeAwakening]

Sorry bballjones, I posted before I noticed your reply!

[Tapas]

$this->bbcode_second_pass_quote('I_Like_Plants', 'W')e in the "First World" need to lead by example. 1% of us, doing it and doing it successfully and publicizing it well, with blogs, web pages, books, etc., are enough to do it. There are people in the US doing it already, living at least fairly sustainably, but it's something like .01%.