3rdnlng Posted January 22, 2016 Share Posted January 22, 2016 Any consumption tax would have to be progressive. Expensive items would have to have higher tax rates to preserve the concept of the rich paying more and even more than more. While sarcasm is always welcome here, I was hoping to have a serious discussion re income tax vs. consumption tax. Link to comment Share on other sites More sharing options...
Chef Jim Posted January 22, 2016 Share Posted January 22, 2016 A national sales tax? Sounds like a business killer On top of income taxes? Yes. Instead of I doubt it. It would likely do just the opposite. Link to comment Share on other sites More sharing options...
Azalin Posted January 22, 2016 Share Posted January 22, 2016 While sarcasm is always welcome here, I was hoping to have a serious discussion re income tax vs. consumption tax. I'm all for a consumption tax. I like the idea of taxation being based on behavior, and not just because you earn money. I have no credentials in economics so I will defer to others, but I would assume that the increase in take-home wages for so many people would spur spending across the board and bolster the economy. I also like the added benefit of turning pimps, thieves, dealers, etc into taxpayers. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted January 22, 2016 Share Posted January 22, 2016 I'm all for a consumption tax. I like the idea of taxation being based on behavior, and not just because you earn money. I have no credentials in economics so I will defer to others, but I would assume that the increase in take-home wages for so many people would spur spending across the board and bolster the economy. I also like the added benefit of turning pimps, thieves, dealers, etc into taxpayers. Initially it would likely dampen business outlooks: It would likely begin with a reduction in personal debt as individuals first began to pay down. Next you'd likely see an increase in personal savings and retirement investing. Finally, you'd begin to see an increase in spending. All those things lead to a much healthier and sustainable long term economic outlook. Link to comment Share on other sites More sharing options...
3rdnlng Posted January 22, 2016 Share Posted January 22, 2016 On top of income taxes? Yes. Instead of I doubt it. It would likely do just the opposite. Let there be no doubt, I'm only advocating a consumption tax as a complete replacement of any income tax. Link to comment Share on other sites More sharing options...
Azalin Posted January 22, 2016 Share Posted January 22, 2016 Initially it would likely dampen business outlooks: It would likely begin with a reduction in personal debt as individuals first began to pay down. Next you'd likely see an increase in personal savings and retirement investing. Finally, you'd begin to see an increase in spending. All those things lead to a much healthier and sustainable long term economic outlook. It's interesting that you say that. I don't have much personal debt at all, and am hoping to retire in 9 or 10 years, and was just thinking that I would take the increase in take-home pay and throw it all into my retirement. That would make such a huge difference in my own situation, I can't begin to say how much I would support it. Even with the increase in cost on the consumption side, if I could retain 90% of the income gained through a bigger paycheck, I would have a lot less to worry about. Link to comment Share on other sites More sharing options...
Chef Jim Posted January 22, 2016 Share Posted January 22, 2016 Let there be no doubt, I'm only advocating a consumption tax as a complete replacement of any income tax. We all are for the most part. With exception of gator who my response was to. Who the hell knows what he's thinking. Link to comment Share on other sites More sharing options...
3rdnlng Posted January 22, 2016 Share Posted January 22, 2016 Initially it would likely dampen business outlooks: It would likely begin with a reduction in personal debt as individuals first began to pay down. Next you'd likely see an increase in personal savings and retirement investing. Finally, you'd begin to see an increase in spending. All those things lead to a much healthier and sustainable long term economic outlook. I've argued here before in support of "The Fair Tax". Not only is it moral but it eliminates (mostly) the IRS and brings the people that are flying under the radar into tax paying citizens. It's very straightforward and with each purchase consumers will be reminded how they are funding the government. It would eliminate much of the special interests in our present tax code. Link to comment Share on other sites More sharing options...
Chef Jim Posted January 22, 2016 Share Posted January 22, 2016 It's interesting that you say that. I don't have much personal debt at all, and am hoping to retire in 9 or 10 years, and was just thinking that I would take the increase in take-home pay and throw it all into my retirement. That would make such a huge difference in my own situation, I can't begin to say how much I would support it. Even with the increase in cost on the consumption side, if I could retain 90% of the income gained through a bigger paycheck, I would have a lot less to worry about. The only issue is the future income the government is planning on when Americans begin to withdraw their tax deducted and deferred retirement accounts. That is a huge amount of money. Maybe they phase that out I don't know. But if they went to a 100% consumption tax how would they handle all that qualified retirement money? Link to comment Share on other sites More sharing options...
keepthefaith Posted January 22, 2016 Share Posted January 22, 2016 We would still have tax cheats. People might offer cash for larger ticket items. I'll pay you $10K for that diamond necklace for my wife but ring it up for $8K, charge me tax for $8K and you can book a sale for $8K. Yeah I know some of that goes on now to cheat sales tax but the consumption tax might cause a lot more of that to happen. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted January 22, 2016 Share Posted January 22, 2016 The only issue is the future income the government is planning on when Americans begin to withdraw their tax deducted and deferred retirement accounts. That is a huge amount of money. Maybe they phase that out I don't know. But if they went to a 100% consumption tax how would they handle all that qualified retirement money? Tax it when they spend it. Current saving largely represents future spending. The only real losers would be those with Roth holdings. Link to comment Share on other sites More sharing options...
Azalin Posted January 22, 2016 Share Posted January 22, 2016 The only issue is the future income the government is planning on when Americans begin to withdraw their tax deducted and deferred retirement accounts. That is a huge amount of money. Maybe they phase that out I don't know. But if they went to a 100% consumption tax how would they handle all that qualified retirement money? I have no idea about that, other than to allow for new types of retirement accounts where people trying to retire won't get reamed upon withdrawing their savings. I understand that any kind of major change in taxation will open up at least a few cans of worms, but I'm also confident that any such issues can be addressed. Link to comment Share on other sites More sharing options...
Tiberius Posted January 22, 2016 Author Share Posted January 22, 2016 Let there be no doubt, I'm only advocating a consumption tax as a complete replacement of any income tax. Nice in on paper but would be a disaster in practice. I'm assuming you would also hope a lot less taxes would be collected overall? We would still have tax cheats. People might offer cash for larger ticket items. I'll pay you $10K for that diamond necklace for my wife but ring it up for $8K, charge me tax for $8K and you can book a sale for $8K. Yeah I know some of that goes on now to cheat sales tax but the consumption tax might cause a lot more of that to happen. Not sneakers, sweaters and appliances? We live so close to the boarder that if you jack up prices on consumer goods enough Canadian goods would be such a discount smuggling would be routine Link to comment Share on other sites More sharing options...
3rdnlng Posted January 22, 2016 Share Posted January 22, 2016 Nice in on paper but would be a disaster in practice. I'm assuming you would also hope a lot less taxes would be collected overall? I specifically stated that I didn't want the level of taxation to be part of this discussion. I can morally justify a "Fair Tax" and want its merits to be discussed here. Any objections based on levels of taxation are just an attempt on your part to obfuscate. C'mon gator, enter the debate with an open mind and don't try to muddy the waters. Link to comment Share on other sites More sharing options...
Deranged Rhino Posted January 22, 2016 Share Posted January 22, 2016 I specifically stated that I didn't want the level of taxation to be part of this discussion. I can morally justify a "Fair Tax" and want its merits to be discussed here. Any objections based on levels of taxation are just an attempt on your part to obfuscate. C'mon gator, enter the debate with an open mind and don't try to muddy the waters. His head is empty enough to begin with, don't tell him to open it up even more. Link to comment Share on other sites More sharing options...
Chef Jim Posted January 22, 2016 Share Posted January 22, 2016 Tax it when they spend it. Current saving largely represents future spending. The only real losers would be those with Roth holdings. That makes sense. You'd also hurt the cash value life insurance play. It's a great way to currently get tax free income at retirement. Link to comment Share on other sites More sharing options...
3rdnlng Posted January 22, 2016 Share Posted January 22, 2016 His head is empty enough to begin with, don't tell him to open it up even more. I want to hear from him why a "Fair Tax" won't work. Link to comment Share on other sites More sharing options...
Chef Jim Posted January 22, 2016 Share Posted January 22, 2016 Nice in on paper but would be a disaster in practice. I'm assuming you would also hope a lot less taxes would be collected overall? How? And the tax system we have is a disaster wouldn't you agree? Link to comment Share on other sites More sharing options...
DC Tom Posted January 22, 2016 Share Posted January 22, 2016 How? And the tax system we have is a disaster wouldn't you agree? Of course he won't agree. But he won't explain why, either. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted January 22, 2016 Share Posted January 22, 2016 That makes sense. You'd also hurt the cash value life insurance play. It's a great way to currently get tax free income at retirement. True, I hadn't really thought about CVLI, which would likely go the way of the dodo. However it would also likely increase sales of term. Link to comment Share on other sites More sharing options...
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