Consumer tax plan
It would make more sense to replace the federal income tax with a state consumer tax that would allow each state to collect taxes on all purchases and remit a fixed percentage to the federal government with no exceptions.
This would require no personal tax returns and each taxpayer would pay his fair share of what he consumed. Each state would receive a fair share of taxes collected based on the consumption of its population.
Jack C. Tanner, Broomfield
Actually, the poor and middle class would be completely shafted by this idea, Jack. As the poor and middle class use a much higher percentage of their income to pay for necessities, such as food, clothing, gas, etc., their percentage tax would be far, far higher than the upper class and wealthy, who have far more income that goes directly into investments. You'd end up with a regressive, rather than a progressive, tax system.
Posted by Aaron on May 8, 2007 04:32 AMSo housing, which is currently in the dumps despite heavy tax subsidies, will have its subsidy replaced by a sales tax?? That would make every $300,000 house a $200,000 (or less) house overnight, and drive millions into bankruptcy. Who besides bin Laden and other America haters would ever support such nonsense??
Posted by Liam on May 8, 2007 07:31 AMActually there is a plan whereby the government will send a monthly check to lower income citizens to assist them with their share of the tax burden.
In the meantime ALL would pay a fair share including illegals who now declare half a dozen dependents and dodge the taxes. Drug dealers and others who don't presently pay taxes would end up paying as they spend money. Higher income individuals would pay a great deal more than poorer people because they spend more and hiding or defraying income would not save them anything as money is of no use until you spend it anyway!
A calculator is available to determine if the plan would give more or less to individuals who would lose the mortgage interest tax deduction. Of course most governmental types don't like this plan. It is too fair and doesn't spare the poor who make money under the table and then put out a hand for aid.
What about the underground economy where billions of dollars in goods and services are off the books.?
The wealthy will by foreign goods if we do this.
Taxes on goods cannot be suspended so everything will go up, maybe sky high up. More cheap goods from China will flood the market into any niche where American goods cost more money.
If I was A chinese investor I would love to see America have a flat tax.
Posted by Sharon B. on May 8, 2007 01:23 PM