John Snow pimps National Sales Tax Proposal on "Ask The White House"

[Bush_Eats_Beef]

"Greg from Wisconsin" smells like a Gannon / Guckert plant to me...and he can't even spell the word "tax"...

:scared:



http://www.whitehouse.gov/ask/20050415.html

Greg, from Wisconsin writes:

Filing taxes is still very complacated and time consuming. And I don't know how much money is spent running the IRS.Why prevents us from having a national sales taz? It would be nice to take home the money I earn, so I can decide how to spend it.

John Snow:

Greg, these are great questions and some of the many issues that are being examined right now by the President’s Advisory Panel on Tax Reform. While America remains known for its economic flexibility and dynamism, our tax code has grown larger, bulkier, more burdensome and lethargic with every passing year. The Internal Revenue Code and regulations are terribly complex, and overwhelmingly long at more than a million words. The code is so filled with loopholes, exceptions and lengthy explanations that individuals and businesses spend more than six billion hours every year on paperwork and other tax headaches. Some research places the total compliance costs of the income tax at roughly $130 billion annually – about 13 cents for every dollar in income tax revenues collected. Of this $130billion, individuals have born the brunt, spending about $85 billion trying to comply with our maze of a tax code. In fact, the average American spends around 25 hours preparing their tax return. Imagine what this great country could do if we could get a few billion hours back… and a few billion dollars in lower compliance costs as well. And that’s why the President has asked that a bipartisan panel work together to come up with some options for tax reform. He has asked that the fine people on that panel be guided by the goals of increased fairness, simplicity and ease of understanding, and economic growth and job creation. The President has also asserted that any reform proposal should carry on the good traditions of recognizing the importance of homeownership and charity in our society. The panel has held six meetings so far… two here in Washington and one apiece in Tampa, Chicago, New Orleans and San Francisco. They are hearing expert testimony at each meeting, and receiving a wide range of critiques and ideas from all over the country. They’re doing great work, and I am looking forward to receiving their recommendations by the end of July. You can find out more about their work – and what they’re hearing about your idea of a national sales tax – at www.taxreformpanel.gov.

[BlueJazz]

1. The only way I would even consider a National sales Tax...

...is if food, clothing (under $100), Rent and any other bare necessities are off the table..Also...expensive jewelry, very expensive automobiles and the like are hit with a fairly stiff tax or if bought overseas are taxed very heavily.

[Bush_Eats_Beef]

3. Well, rent is on the table...definitely.

Also, we need to remember that the "30 percent" number is a lie, too.

Economists who have looked at Linder's proposal say that if the primary goal is to abolish the IRS, you need a number closer to 40 or 50 percent. That's ADDED to your existing state tax.

So let's say you live in Silicon Valley, CA...where housing prices are still obscene and completely out of step with the economy and what people are actually earning.

Say you live in an apartment and pay $1200 per month rent.

Add 45% to that for a National Sales Tax, and your existing 8.25%, or 53.25%...

Your NEW rent is $1842 per month. Time to start advertising for a roommate.

I don't understand why people are silent on this. I post updates on DU and I can hear the crickets chirping and the tumbleweeds roll on by. Either people think it will never happen (which is a foolish assumption) or they don't understand how they will be slammed.

Either way, it's time to get vocal about THIS One.

[femme.democratique]

4. Because people, even on DU, are myopic...this is yet another of those

"watch what they're doing while they're distracting you with meaningless BS"

This bill is akin to Taxation without Representation, the closest modern-day equivalent to the events that started the Boston Tea Party. Whoever said everyone on DU is brilliant...well, they're sorely mis-guided. They'll try to slip this in as we're focused on Social Security and Presidential Nominations. Some on DU are too naive, they think this wouldn't pass? Come on, look at the bills you never thought would pass - they passed because of the idiot criminals that are running the congress.. Look at history, you will learn what the future holds...

[Dave Sund]

8. They won't...

They'll publicize it a lot. It's common sense, and politics. In order to pass a sweeping proposal that would abolish the entire tax system as we know it and replace it with an incredibly regressive tax, they would have to publicize it.

We've seen a few test balloons, yes. I'm concerned, but Social Security isn't a misdirection, and neither is anything else they're trying. They want every proposal they're pushing forward, and we want none of them.

Believe me, I'll be up for a fight the minute they start the real push for this.

[Bush_Eats_Beef]

10. THANK YOU. THAT'S what I want to hear.

Seriously.

I agree, "the real push" hasn't started. But the coy references have. The biggest thing that steams me over this is Bush's comment that we ought to "take a serious look at" the proposal, THEN his denial during the election when Kerry called him out on it.

I hope this never gets to the "real push" phase.

:toast:

[BlueJazz]

6. Oh..I agree fully..That's why if I hear somebody...

...talking about a National sales tax and they start in with taxing bare necessities, I "Tune out" immediately.

The bottom line, in how I feel is, the tax HAS to help people making under 40 grand (or whatever)...about the same for the 40 to 150 grand folks and a larger share for the rest.
Otherwise it's "No Way, Pal".

[Bush_Eats_Beef]

11. I was thrilled that the National Retail Federation said on April 14th...

..."The NRST is a horribly regressive tax that would hit the poor the hardest and would double tax senior citizens as they spend savings that were already taxed. We think one tax day a year is bad enough. Supporters try to call this the 'Fair Tax' but it's really the 'Unfair Tax.'"

http://www.nrf.com/content/default.asp?folder=press/release2005&file=NRST-taxday.htm&bhfv=2&bhqs=1

Because the ONE thing that John Snow and John Linder and the rest DO NOT MENTION is that this tax would "double dip"...for seniors, for unemployed people living on their "nest egg" until they can find work...this tax would take a SECOND CHUNK out of the money you've already paid tax on...probably an additional 40-50% in addition to your local state tax.

[nickgutierrez]

2. I've got some questions I'd like to "Ask the White House"...

But I don't think they would answer.

[nickshepDEM]

5. Exempt food, rent, clothing, medicine, etc...

And then maybe, just maybe, Ill take a look.

[Telly Savalas]

9. It'd still be a stupid fucking idea.

By the time exemptions are made for all of these things, the list of taxable goods and services would be so small that they'd have to be taxed at a really high rate in order to generate an appropriate level of revenue. This would lead to a vicious cycle, because the high tax rate would adversely impact spending on luxury items which would then necessitate even higher tax rates.

Furthermore anybody who thinks replacing the income tax with a national sales tax will eliminate the IRS bureaucracy needs to put down the bong for a while. Are they proposing that businesses pay this sales tax on the honor system? If not, it's still going to take a huge bureaucracy to collect and process the revenue, and to audit businesses to make sure they're being honest.

The basic tenets of tax reform are simple: implement a progressive income tax structure; keep the code simple by closing the many loopholes which only benefit the wealthy; income earned via ownership of property should be taxed at the same rate as income earned via labor. There is nothing inherently more "simple" about a national sales tax or a flat tax than a well constructed progressive income tax, and the radical right is lying out their ass when they claim otherwise. I find it appalling when Democrats take such proposals seriously.

[PaDem]

7. Am I wrong to assume that this would hurt the economy?

People holding back on spending would slow down the economy, wouldn't it?

[Bush_Eats_Beef]

12. Wouldn't hurt it. It would kill it.

The economy cannot stay afloat exclusively through the "purchasing power" of Bush's "base."

People will buy "survival items." No more Blockbuster rentals. No more trips to Tower Records. Stock up on toilet paper and toothpaste.

The economy would crash and burn.

[dcfirefighter]

13. Knee Jerk Reactions

If you think that a 30% tax on commerce will kill commerce, what do you think a 30% tax on jobs is doing now?

For the record, I don't think that the NRST is ideal, but I do think it's better for poor, middle class, and wealthy americans than the current income tax.

Face it. We arent' going to get anyone to switch to a 35% tax on all income above $100,000, or any other radically progressive income tax that would otherwise exempt the first $50-$100,000 from taxation.

The NRST 'FairTax' is actually progressive. Whether or not the actual amount you'd spend on taxes under or not depends a lot on the deductions you take, and the purchases you'd make.

What makes it progressive, is that they take the poverty level income, that is how much it costs for housing, transportation, education, entertainment, food, clothing, etc., and calculate the tax on that level of spending. They calculate that and send it to every American, every month, just like a tax return. Spend less than poverty level spending, and you get more back than you spent on taxes. The wealthy spend more on food and clothing than the poor do, this evens it out without choosing what items are luxury items, shutting the door on special loopholes.

What you are failing to account for is that the FairTax untaxes jobs. That's right, it untaxes them. What happens when we take a 20-30% tax off of employment...bang! We get more employment. What happens when we start running out of unemployed people to hire? Bang!...we get better wages.

As far as rent, much of your rent is determined by what the market will bear, so rent won't go up 30%. Either will most after-tax prices. Most after-tax prices will only increase by about 10% or less, due to pre-tax prices dropping due to competition from untaxed producers. Also, nothing comes out of your paycheck - not even payroll taxes, which are 15% on EVERYONEs incomes.

I suppose I'll be flamed for supporting this, but it does have it's merits.