25% national sales tax would pay for universal health care, balance the budget and exempt most Americans from the income tax

[milimelo 4,481]

Bosnian government introduced VAT in 2006 - big mistake. Food, that was taxed at 0% or 10% went to being taxed at 17% like everything else. Medications, previously not taxed, also got hit with VAT. Nobody gained anything from VAT but the corrupt politicians. Now there were even talks about raising VAT even higher than 17%.

Income taxes, taken out in monthly salaries take up over 60% - example - you get net $1000 salary. Gross that is $1900 as $900 goes to social security, health-care and all other taxes they imposed upon people. Health-care sucks as people wait for months to get an MRI or a simple stomach ultrasound.

Going to VAT will not be a smart idea.

[Texanadian 10]

Can someone explain to me US sales tax by the way, in what way is it different from VAT aside from the fact that you have to calculate it from the price on the shelves whereas in Europe it is integrated into the price?

VAT is a tax on the increased sale cost of a good throughout the beginning to end. Let's say you own a lemonade stand. You buy the lemons from a farm. The farm pays tax on the difference between what they paid for lemon seeds and what they sold you the lemons for. You sell the lemonade to a customer. You pay tax on the difference between what you sold your lemonade for and how much it cost you to buy the lemons.......So it's a tax on profit....then a tax on the next profit....then a tax on the next profit.

A US sales tax would except sales tax on the farmer (because they're not the consumer), would except tax on you (because you're not the consumer) and then finally tax the person buying the lemonade. Since they would be the end person. So sales taxes are simply a 1 time tax on the end purchaser.

North Americans don't like VAT because it taxes the same product over and over and over again.

I'm Canadian, so I know about the GST tax. Trouble with sales taxes is that they're not indexed to inflation like income taxes are. When GST came in in 1990, it was 7%. But something that cost $100 in 1990 might cost $175 in 2000. So you pay GST on $175. An excellent example would be gasoline prices. Gas was cheap in 1990. Expensive last year. Since you're charged a percentage rather than a set amount per gallon or litre, the percentage method gives the government waaaaay more money when the price of gas rises.

I always hated paying GST on stuff I bought in other countries. Same with provincial sales taxes. That's one thing that the US has right. Not taxing stuff bought in other states.

I have to say, paying sales tax on food does seem to be nonsensical. I guess I don't understand your tax system at all. It seems reasonable to me to zero rate food. I can understand taxing eating in a restaurant of course. In the UK children's clothing and shoes are also zero rated.

Actually taxing food would be one of the fairest ways to tax people. It's something that we all need and buy. We all have equal needs for food. Besides, more Americans are overweight than underweight. Diabetes is on the rise. Anorexia is rare in comparison.

Edited May 30, 2009 by Texanadian

[Kar98 0]

North Americans don't like VAT because it taxes the same product over and over and over again.

And you pay sales on the gasoline tax you pay when you're buying gas in Germany.

[rebeccajo 14]

Well, we Americans aren't paying any tax on gasoline!

:lol:

http://www.api.org/statistics/fueltaxes/up..._Map_4_2009.pdf

[Gary and Alla 3,694]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

This is the fair tax. I am all for it. But only if the 13th amendment allowing income tax is repealed first. Other wise it is just added on and would only make things worse.

[one...two...tree 2,762]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

This is the fair tax. I am all for it. But only if the 13th amendment allowing income tax is repealed first. Other wise it is just added on and would only make things worse.

That's a misnomer. Read Article I, Sec. 8 of the U.S. Constitution:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

http://www.constitution.org/constit_.htm

Edited May 31, 2009 by Col. 'Bat' Guano

[bhajishah 4]

25% sales tax??!! Im buying all my stuff @ garage sales then !!

[I AM NOT THAT GUY 5,715]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

This is the fair tax. I am all for it. But only if the 13th amendment allowing income tax is repealed first. Other wise it is just added on and would only make things worse.

That's a misnomer. Read Article I, Sec. 8 of the U.S. Constitution:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

http://www.constitution.org/constit_.htm

Wrong. Further, Section 9, of the same article prohibits an income tax.

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

[NickD 203]

I interpret this as instead of finding stuff at 50% off, will have to find stuff at 75% off, more of a challenge.

Tax guys are constantly beating their brains to find new taxes constantly, were really hitting farmers for growing some of their own foods like a steer, a chicken, a pig, or a stringbean, and county that as their gross income, but so far haven't hit us with a single tomato plant that we are lucky to get one tomato from, but maybe we should claim that as well.

Keep on talking about services we need, like moving all the snow from the road and dumping that in my driveway, would be a lot easier for me to clear the roads as well. Some of my friends feel their services are filling their own pockets or the pockets of their friends. Can't help but feel this is what is going on today.

[Texanadian 10]

Actually the Fairtax proposal is a 30% sales tax.

[one...two...tree 2,762]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

This is the fair tax. I am all for it. But only if the 13th amendment allowing income tax is repealed first. Other wise it is just added on and would only make things worse.

That's a misnomer. Read Article I, Sec. 8 of the U.S. Constitution:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

http://www.constitution.org/constit_.htm

Wrong. Further, Section 9, of the same article prohibits an income tax.

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

LOLZ...what??? Bill, please tell us your interpretation of that part.

[Ban Hammer 13,346]

25% sales tax??!! Im buying all my stuff @ garage sales then !!

good point.

[lostinblue 1,989]

I have to say, paying sales tax on food does seem to be nonsensical. I guess I don't understand your tax system at all. It seems reasonable to me to zero rate food. I can understand taxing eating in a restaurant of course. In the UK children's clothing and shoes are also zero rated.

Why? What's so special about food?

It depends how one views things, of course. Personally, I do think that taxes should have at least some proportionality to one's income. Food is an essential item, one can't live without it. Taxing food therefore means that those on a lower income are necessarily paying a greater % of their income out again in taxes. That does not seem reasonable to me.

Maybe the poor people could plant a garden and can or freeze some of their home grown food to save money. This tax would force people to live a little different. What is wrong with a 12 year old weeding a garden or a welfare mom hoeing the corn. I grew up poor according to my mother. I was picking strawberrys when I was 10 years old for 10cents a quart. Give people something to do instead of pumping out more babies. Want to save money on the food budget raise it yourself.

[I AM NOT THAT GUY 5,715]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

This is the fair tax. I am all for it. But only if the 13th amendment allowing income tax is repealed first. Other wise it is just added on and would only make things worse.

That's a misnomer. Read Article I, Sec. 8 of the U.S. Constitution:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

http://www.constitution.org/constit_.htm

Wrong. Further, Section 9, of the same article prohibits an income tax.

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

LOLZ...what??? Bill, please tell us your interpretation of that part.

The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows the Congress to levy an income tax without apportioning it among the states or basing it on Census results. This amendment overruled Pollock v. Farmers' Loan & Trust Co. (1895), which greatly limited the Congress' authority to levy an income tax.

http://en.wikipedia.org/wiki/Sixteenth_Ame...es_Constitution

The only controversy about the issue is in your mind. Without the Sixteenth Amendment, an Income tax, (a kind of Excise tax) would be limited to wages from labor only. You won't be able to tax them rich folks and big corporations on profits, rents, dividends, and such.

[one...two...tree 2,762]

Wrong. Further, Section 9, of the same article prohibits an income tax.

...

The only controversy about the issue is in your mind. Without the Sixteenth Amendment, an Income tax, (a kind of Excise tax) would be limited to wages from labor only. You won't be able to tax them rich folks and big corporations on profits, rents, dividends, and such.

Bill, go back and read your statement I highlighted in red. You made the claim that Section 9, which you pasted in reply makes it clear that income tax is prohibited, which is not true.

see below...

In 1895 the United States Supreme Court, in its ruling in Pollock v. Farmers' Loan & Trust Co., held a tax based on receipts from the use of property to be unconstitutional. The Court held that taxes on rents from real estate, on interest income from personal property and other income from personal property (which includes dividend income) were treated as direct taxes on property, and therefore had to be apportioned. Since apportionment of income taxes is impractical, this had the effect of prohibiting a federal tax on income from property. The power to tax real and personal property, or that such was a direct tax, was not denied by the Constitution.^[10]Due to the political difficulties of taxing individual wages without taxing income from property, a federal income tax was impractical from the time of the Pollock decision until the time of ratification of the Sixteenth Amendment...

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

....

There's a world of difference between impractical and unconstitutional. What had been unconstitutional was the taxation but how it the tax was applied. A huge difference.

Edited May 31, 2009 by Col. 'Bat' Guano