Oh good heavens help us...

[kellinator]

The latest idea from Herr Shrub: Let's get rid of the income tax and replace it with a national sales tax.

This is the worst idea I've heard from the Idiot-in-Chief since... oh, who's counting?

I don't know a lot about economics, but I come from Tennessee, home of one of the highest sales taxes in the nation (including on food, and yes I do mean groceries). And sales taxes are definitely regressive.

Do the math. Say a person needs x amount of food to survive, taxed at 8%. For Bill Gates that tax is nothing; for the average middle-class American it's an 8% jump in the food bill. Talk about your cost of living increase...

I guess this is his way of saying he doesn't think he's put enough of the tax burden on the middle and lower class.

And if this post pisses you off, I don't give a fuck.

EDIT: Excellent article from resipsaloquitor:
http://money.cnn.com/2004/08/11/news/economy/election_tax/index.htm?cnn=yes

Comments

[gmslegion.livejournal.com]

You're assuming that the pre-tax cost of the food will remain the same. Since the fairtax (cited by others above) assumes that the income tax will be removed entirely, not just from your takehome pay, the costs of production and distribution will drop. Ideally, and this assumes your grocer is willing to lower the cost of the food since it now costs less for him to purchase, you're adding the 8% you cite to a smaller base cost.

I don't blame you for being skeptical. I was, and I continue to be. Nevertheless, I've been completely sold by Congressman Linder on the fairtax, and I'm stunned and amazed that now, after all this time, our idiot president has finally done something with which I agree. I might have to knock him back from #2 to #3 on the "worst presidents ever" list.

Seriously, have a look at the fairtax.org website and read over the FAQs. They do a very decent job explaining it.

[not-hothead-yet.livejournal.com]

why do you assume expenditures would drop? Because they are smaller than current taxation of corporate income? A business can spend billions of dollars on materials and still only net one million - that's a multiplicative difference by one thousand! 30% on that one billion dollars is a LOT of money. 30% on the netted one million is paltry in comparison. I see no savings for large non-service-industry businesses here.

[gmslegion.livejournal.com]

I was only speaking in terms of retailers - grocers, specifically, since that was what was originally mentioned. Goods on retail shelves have their prices inflated because the manufacturer, the supplier, the distributor and the retailer are all paying payroll and assorted business taxes which the fairtax would abolish. Thus, the cost of the good decreases.

There's much more to consider in the field of corporate investments which you may find interesting. You can see some supplemental research here: http://fairtax.org/pdfs/manufacturing.pdf