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

[misanthropist.livejournal.com]

Well, I think they would respond by saying that all of those federal taxes that come out of your paycheck wouldn't, and thus a "food tax" wouldn't be so bad.

I disagree, but that is what they would say.

And this would mean that we pay like 14-20% in sales tax (because the states need money too)?

[skellington.livejournal.com]

Actually, the number they've come up with is an "inclusive" tax of 23%, which is equal to a sales tax (add-on tax) of 30%.

Of course, Social Security and Medicare (FICA) taxes are already 15.3% ("inclusive")..

i.e. you get paid $100, the government taxes 15.3%, and you end up with $85 to spend. vs. you spend $85, with a 30% (plus state) sales tax, and end up paying about $110. Which is probably a wash since you were paying more than the 15.3%, and there's a rebate on all spending up to the poverty line.

And for what it's worth, Social Security is a regressive tax, although that's not too unreasonable given what it is for...

SKG

[polychromatic22.livejournal.com]

If you are under the age of 35, and not injured, it is unlikely that you will ever see any of your social security that you have paid in. Those wonderful statements that were made mandatory to send out are based on social security beneficiary numbers remaining precisely the same. They do not take into account the enormous amount of baby boomers coming into social security, nor the longevity now possible.
Expect to continue to see the start age of social security benefits continue to rise, as it already has. Then expect it to disappear.

Or hey, we could all be wrong. Who knows?

[skellington.livejournal.com]

Disclaimer: Social Security is one of my pet topics, so...

It's bad, but it's not quite as bad as you think.

The current estimate is that sometime in about 35 or 40 years, when I'll be 70-75, the so-called "trust fund" will run out of money. (And depending on how the budget is managed between now and then, we'll also be drowning in debt, Medicare will be broke, and we'll have huge obligations to Vets and retired government employees. But ignore that for the moment.)

However, even at that point, we'll still be getting in about 75% of what we need to pay the beneficiaries. And that number doesn't get much worse.

So, worst case, I expect some combination of benefit reductions, increase in the retirement age, means testing, and tax increases to keep the program solvent. And all they have to do is reduce expenditures by 25%, so these aren't REALLY radical changes. (And raising the retirement age has the benefit of keeping workers paying in longer, which increases the taxes as well.)

These changes all suck, but aren't THAT much worse than the current system (which totally blows chunks as any kind of "retirement insurance" or "investment). And, IIRC, 35-40 years ago they reduced the benefits pretty radically and a 35 year old of that day could have complained about how bad of a deal the new social security was going to be.

I'm a bit worried that Kerry has said that Social Security doesn't have a problem. It does, and the sooner we start making some of those changes I listed above, the less pain we'll have later. But Bush hasn't had the balls to do anything about it either.

It's a tremendous rip-off, no matter how you slice it, until and unless they fund individual accounts. With the funds I've already paid, I could probably buy an annuity that would pay my predicted social security benefits. And that's discounting my next 30+ years of payments. (You do have to factor in the price of the disability insurance, but that's only about 20-25% of the SSI budget.) But until we find the money to switch to some kind of individual accounts, I'm just considering it "elder-fare", and not worrying about it that much.

But I'm still confident we'll all see Social Security, possibly at age 70-75, that will pay out something near the poverty level. And we're likely to have to pay slightly higher taxes (1-2%) in the meantime.

However, if you don't want to live near the poverty level, time to make sure you're maxing out your 401k/IRA/etc. contributions.

mildly relevant

[not-hothead-yet.livejournal.com]

do not forget that social security also pays out to citizens (and their caregivers) who are MENTALLY disabled at any age. Those of us who have mentally disabled children get a small benefit from SSI right now including medicare - health insurance that ONE of my children has but my other two have nothing because they don't qualify!

Obviously, paying out non-retirees contributes to the non-solvency of SS funds because that is a wholly unpredictable and unstable outlay of money. So far as I have experienced, the restrictions for receiving help have gotten more stringent and the process for applying for help has become more Kafka-esque which I suppose cuts down a little bit the teeming masses of people who are "taking" everyone's money. The system itself is so incredibly flawed it has consistantly been pointed out as being the most inefficient and ineffective assistance program in the country.

The stories I could tell you...