Should the federal income tax be abolished in exchange for a federal sales tax that does not apply to food or clothing?

[Sowanaski]

Yes abolish the federal income tax and replace it with a federal sales tax

No, the income tax is more efficent

Taxation is theft

Updates

+1 y

Thank you all for your opinions on this. It was an interesting poll. Unfortunatley I won't be responding to opinions posted to this question anymore going forward. It was a pleasure discussing this political topic with y'all.

[NaultD]

Let's look at history when we were damn near in the black.

Clinton signed the Omnibus Budget Reconciliation Act of 1993 into law on August 10, 1993. The law created a 36 percent to 39.6 percent income tax for high-income individuals in the top 1.2% of wage earners. Businesses were given an income tax rate of 35%. The cap was repealed on Medicare.

Bush jr pushed for a tax rebate and on average people got $600 to $800. That was before September 11th 2001. That war on iraq started our current deficit.

https://www.pgpf.org/national-debt-clock?gad_source=1&gclid=CjwKCAiA04arBhAkEiwAuNOsIs-aYWNTt2MoxQDflULheoXbIfcBVlaadlwlwouBw8Ddqh0PXCD4sBoCkqUQAvD_BwE

So who makes the deficit worse spending less and doing nothing is Republicans. Who makes the deficit better by spending more and doing more is democrats.

[Avicenna]

Lol, the budget surpluses in the late 90s weren’t due to tax increases. Funny how both houses of Confress were controlled by Republicans during that time.

Partisan nonsense isn’t a good basis for economic analysis

[strateguy632]

nothing? trump didn't build any wall? he built and battled congress for funding. he passed an abortion compromise law in the house and much more.

[Static_In_The_Attic]

I’m voting yes to the abolishment of federal income taxes & replacing it with federal sales taxes. There should be a tax on food & clothing as well unless you are a senior citizen of this country. In our country there are a lot of illegals that buy food & clothing so the sales tax would help as well. With the abolishment of income taxes I think more people would actually go to work.

[OlderAndWiser]

I would prefer a sales tax instead of an income tax. However, you must realize that this would place far more of a tax burden on the lower class and lower-middle class, who currently pay a disproportionately low share of the total individual income tax revenue collected every year.

[Sowanaski]

Can you explain? I don't see this affecting the poor negatively because food and clothing won't be taxed.

[OlderAndWiser]

Because they currently pay virtually NO income tax.

[Sowanaski]

I see this as an absolute win. I dont see the rich getting out of paying a sales tax either. Makes it more equal.

[OlderAndWiser]

It has been suggested several times previously and always rejected for the reason I provided.

www.taxpolicycenter.org/.../who-bears-burden-national-retail-sales-tax

[sage2021]

@OlderAndWiser
Some States like California have sales tax, state tax, federal tax. That's why we call it Taxafornia.

[Sowanaski]

@sage2021 I'm from Pennsylvania and its the same. I hate taxes. Only tax I am ok with is taxing other countries, foreign manufacturers for imports. I don't believe in a tax on American citizens living inside the country.

[OlderAndWiser]

@sage2021 I am not a fan of the Left Coast.

[sage2021]

@OlderAndWiser
Well, to be honest, when I was born on the left coast, I wasn't thinking about taxes and such as a newborn. As time went on, and I started and finished high school here on the left coast, I still didn't have taxes on my mind. Then I continued to live on the left coast because my family all lived here. I still wasn't thinking about taxes. It's just always been that way since I was born I guess.
Ah yes, you're going to ask why I didn't move where the taxes weren't so high. You see, I still am not thinking about taxes and especially won't move because of them. That's stupid. 🤷🏼‍♀️

[OlderAndWiser]

@sage2021 It's difficult to leave somewhere you have been your whole life. My family has been in northeast Florida since 1790, and I'm still here, along with about 500 other close and distant relatives. I understand.

[RingOfFire]

Every kind of tax has its issues. What you are talking about is called a "consumption tax." Generally it is a more efficient way of raising taxes and in that sense it is good. But the downside is that it is too simple for politicians to increase the tax rates at the drop of a hat. So if this system was ever employed in America (and I think there is virtually no chance it ever will be because the current corrupt tax system gives corrupt politicians much more power over the people than a consumption tax would and if there is one thing that NEVER happens it is someone in Washington voluntarily giving up power)... But anyway, it they did do it they would start it off at some rate like 10 percent and by a decade later it would be over 20% like the VAT tax in Europe.

It's a good idea on paper, but not necessarily in practice. Although given a choice between to corrupt tax systems, the one we have now or that one, I'd take the consumption tax.

Democrats want both taxes. They want the income tax AND the sales tax. They are the party of big government. So if you are sick of the corrupt taxes, don't keep voting for Democrats.

The bigger the government, the smaller the citizen.

[libsaretards]

I have no problem with how the current income tax system is structured. However, I have a problem with how the funds are being spent. We should not be funding overseas wars or one party's pet projects.

Taxes should be used strictly to ensure the needs of Americans are met. Those needs are protection (military), healthcare, food, housing, roads, etc. You know, stuff that is needed to live.

There are probably other necessities I am probably forgetting to mention, but you get my point. MANY of the things we taxpayers are paying for do not directly benefit the average American. That is wasteful spending. Hold the government to the same credit standards us average Americans are at the mercy of.

[Soteris]

That sounds like a terrible idea and I can see this being a massive tax cut for the rich. The great part about taxing income is that it theoretically has no blindspots in it for people to hide and that it is easier to target people who are wealthier. This on the other hand is the exact opposite. Just because you are rich does not mean you have to pay more for goods and services and you also do not require more TV's or whatever strictly speaking.

In other words, under a tax code like this you would have the wealthiest people in USA pay about as much in sales tax as a middle income family which is not really sustainable on multiple fronts.

[BoopBoopBeep]

How do you figure @Soteris? This part:
"In other words, under a tax code like this you would have the wealthiest people in USA pay about as much in sales tax as a middle income family which is not really sustainable on multiple fronts."

Rich people buy more expensive stuff than poor people. 10% (or whatever) sales tax on someone spending $1000/month vs someone spending 6k/month is significantly more for the wealthier person to pay.

[Soteris]

@BoopBoopBeep First of all, there is no rule that they have to. Secondly, higher quality means that the things they buy at least has the potential to last much longer. My grandfather for example had the same pair of expensive leather shoes for 40 years with some maintenance. Lastly, the difference between a middle income family and a rich family sales tax is negligible compared to the difference between taxes in a normal tax code that is based on income.

At the end of the day, rich people spend a much smaller percent of their income on "stuff" than people who are poorer than them which means they will be taxed on a much smaller percent of their wealth compared to others which balances out their total contributions.

[BoopBoopBeep]

"As a percentage of their income" doesn't matter though, because we'd be taxing the real money that they spend. I spend 6-8k/month... doesn't matter what percentage of my income that is, that'd still be 600-800/month in taxes, which would be more than someone who only spends 1k.

[Soteris]

@BoopBoopBeep Yes it does matter and no you would not be taxing the money they spend. You would be taxing the money they spend on goods specifically which is not necessarily a big part of their expenditure and even worse, can easily be circumvented.

For example, if you buy a boat then you have to pay sales tax on it but if you RENT a boat then you do not because that is a service and not subject to sales tax. I predict it taking like 5 days for every rich person to figure out that they can evade all their federal taxes under this tax plan by simply transferring all their bought goods into services, but I digress.

The reason why sales tax does not scale well is because the consumption of goods does not scale well. For example, a common expenditure of a poor or middle class family is milk to drink. A rich person, even if they have 1000 times the wealth does not drink 1000 times the milk. Maybe they buy a more expensive milk but it is still not 1000 times more expensive, the difference between the cost of milk between the two is negligible compared to the difference in their personal wealth.

I could go on but quite frankly this tax plan is so bad that I dont feel it is worth even talking about.

[BoopBoopBeep]

Here's where your milk analogy falls apart. Your example family drinks a gallon of milk a week. You're saying I won't drink 100 gallons, and you're right, but my grocery bill is significantly higher, because I eat nicer shite and I don't buy $2 microwave garbage. My 800/wk in groceries doesn't matter if it's milk or caviar it's still coming from the same store.

I've been poor before. Really poor. I've been really, really NOT poor before, and now I'm somewhere in the middle. I promise you I spent far less when I was poor than when I wasn't.

[BoopBoopBeep]

Crap that was @Soteris

I hate that there's no edit button

[BoopBoopBeep]

Oh and services still get taxed. When I go to the lake it doesn't matter if I'm paying for a good or service, state sales tax applies equally to both.

[Sowanaski]

@BoopBoopBeep now if they could also eliminate state sales tax and leave that for just the feds. That would be great.

[rigmarole]

Nope. The federal government should get all their money from foreign trade tariffs. American citizens should not be taxed directly at all by the federal government. If Americans choose to purchase foreign goods then taxes can be collected via tariff. This would impact large corporations first and foremost which would be passed along to consumers via price hikes in foreign goods. Locally produced good would be more competitively priced as a result which would lead to more jobs and a more robust growth in the local economy. We import $3.5 trillion in goods yearly at the moment. At times tariffs had been as high as 95% int he USA. I don't think they need to be that high, but the Federal government needs a major hair cut. Much of what they do is unconstitutional and needs to be abolished.

[RingOfFire]

I'm all for "made in America." But the problem is that by imposing tariffs, what you are doing is raising the cost of living for Americans versus the rest of the world. That doesn't benefit America.

What America needs to do instead is INNOVATE AND COMPETE. THAT is what raises our standard of living. If they can produce something for $10 a piece in India, we have to find a way to produce it for $9.99. Whether it is technology improvements, more efficient processes, mining new materials that do the job better, taking advantage of our enormous advantage over any other country in cheap fossil fuel energy, whatever. Innovation and being a better competitor is what improves the lives of people, not preventing people from buying things for less money produced by a competitor who is doing he job more efficiently than we are.

An exception to this is the way President Trump used tariffs. He used them as a weapon of persuasion... and he was enormously successful at that. He used the power of America to force those countries that were benefiting from trade with America but at the same time working against our interests to force them to change their positions and go along with what was good for Americans. He was BRILLIANT at that.

But in general tariffs are bad for Americans not good. All they do is force Americans to have to pay more for everything they buy. The answer is to become more competitive and efficient not to deprive Americans of the best deals.

[rigmarole]

In theory free trade is ideal. In practice, you have competing nations manipulating currencies and subsidizing state run companies to monopolize industries and displace American workers. When people cheat free trade doesn’t work as it should... Every nation state has their own form of government and I’m not in favor of becoming a communist nation that subsidizes every industry in order to out compete other nations who are running centrally planned economies. I don’t want to play their game, because that would lead to the destruction of my way of life. You don't beat them by becoming them. The world isn’t all under the same political and economic framework. Some countries game the system.

That said, you act like federal income tax doesn’t increase the cost of living for every day Americans… I’m suggesting we abolish federal income tax completely. That said the federal government does have an obligation to carry certain responsibilities like national defense and diplomacy. Thus if we are going to send money/resource to other countries in exchange for goods which can potentially fund their military which could be used against us, I’m not against placing a tariff on their goods that in turn funds our military to counter them and maintain a diplomatic core to maintain relations. That’s were I’m coming from. The money has to come from somewhere. Nothing is free. Why not collect what is needed from foreign trade, If what we need to fund is the protection of our nation from foreign powers?

[rigmarole]

A free trade policy doesn't mean that a country abandons all control and taxation of imports and exports. You still have to assure fair competition within the market. Countries like China are going to do what they are going to do... I'm not saying you ban their products from market or put quotas on how much they can import to protect specific American industries. I'm just saying put a tariff on their goods and collect the juice... If their products aren't competitive with the tariff tact on then a domestic company will likely fill the demand at a competitive price mark.

[RingOfFire]

Government subsidies of production in order to undercut the pricing of your competitors is a losing strategy in the long run because the subsidies have to come from somewhere. That's socialism and communism. Let them "cheat." Take advantage of their giving away their resources and in the meantime use those resources to make your own economy stronger and more resilient. That is what made the American economy the strongest in the world.

[rigmarole]

@RingOfFire They send cheap products in shipping containers on one hand, but they take with the other listing Chinese companies on the NYSE, NASDAQ, and Over-The-Counter Bulletin Board via shell corporations to defraud American investors of billions of dollars. China robs Grandma’s mutual fund in order to fund sending you cheap products that drive companies in your community out of business. It’s not a giveaway on their part. Americans finance the cheap products under the assumption they are investing in the American economy. China is also key to the black market fentanyl drug trade across the southern border that kills hundreds of Americans every day and drains vast wealth from our country. They receive foreign aid from us as well… China’s economic miracle as it’s labeled was directly financed by America.

[RingOfFire]

Why do you assume that I favor China's policies. I don't. I despise them. But that's a different topic. Do I think we need to confront them about those things. Yes, very much so. That's one of the reasons I support Trump. He is the only president that stood up to them in a century. And that's why they worked so hard to stop him from getting a second term. And tariffs, as I alluded to earlier were his weapon of choice. He had China in check. I don't support tariffs as a sound general economic policy, but I have no objection to the use of tariffs as a deterrent.

China has outwitted America for decades. They are thinking the long game and strategically. We need to do the same thing.

[rigmarole]

@RingOfFire China hasn't outwitted America, they have infiltrated our institutions and bought leadership through bribery. People know what they are doing... The problem is that those whom are responsible for defending America are part of the fraud and in China's pocket, weather it be Obama, Biden, General Wesley Clark, etc. It's destruction from within. You don't get cheaper resources and products, you just pay for them in a round about way. All companies in China regardless of if they are legitimate or fraudulent are state owned. I'm not saying you can't buy those products from China if you desire them, I'm just saying if you want them, pay a tariff on them that can then go to funding border security to reduce illegal smuggling of fentanyl that originates in China across our southern border into our cities to kill our youth. If you want to make China strong, then make America strong enough to defend against China. You can have a relationship, you just need to pay to maintain that relationship and insure it is fair trade and that hostilities are contained.

[rigmarole]

Go watch The China Hustle... It's a short introduction to some of the financial crime China conducts against the American public with the assistance of American sellouts...

https://vimeo.com/744272549

[rigmarole]

As to while I bring up China specifically with you vs other markets... Well that's a no brainier...

[rigmarole]

*why

[WindAtMyBack]

I like the idea, and in the early days that's similar to how the US was set up. But in practice in the modern world it could cause a lot of problems. Not only would it drastically shift who pays the taxes, it would actually increase the budget to get the same level of service. That's because without tax deductions they can't control other peoples' money.

On the bottom line, lack of income is the same as spending the money. Tax deductions are government programs that are a hidden part of the budget. It's also a very efficient way to "spend" money. If they can't control other people's money, they either have to drop the program, or pay for it themselves at a MUCH higher cost.

[strateguy632]

if not from salary, and not 5% food then would need HUGE from electric bill etc. for national budget, hitting the low earners very hard. better a small percentage from trump salary 3% 1 million is 30 thousand, so the majority minimum wage earned give only 10%.

[BCA6010]

Kind of irrelevant when the government doesn't care about balancing the budget anyway. The goal now is to screw things up so badly that a reset via CBDC is the only way out, and then everything will be taxed or manipulated one way or another.

[strateguy632]

i am scared of digital, too much risk.

[Anonymous]

If your not going to play your equal share of taxes your not entitled to an equal share of services or representation. A State that exist to enable one group of people to exploit and force anther group to serve them is a slave state. Such a state is abusive and ultimately not litigate. Its also not sustainable.

[Sofargone93]

When the government accepts Fiat currency. It doesn't matter. They are not going to change anything for the state or government. We as a nation are on too much debt because of the government. The federal reserve is the problem.

[dreamstar72]

Do you realize the tax would be over 30 percent plus 8 percent sales tax so about 38+ percent tax on everything you buy. So the low income people would suffer the worst by paying more and the rich would make out quite well by paying less in taxes.

[Avicenna]

No, that will be way too narrow of a tax base and will betoo easy to avoid as well as encouraging black market activity

[Avicenna]

Plus they‘d be very regressive

[Sowanaski]

Can avoid the regressive aspect by making all daily living neccesities untaxed. Ie food clothing, hygiene supplies, cleaning supplies. The rich are more likly to pay for luxary items, which in this case would be taxed making the wealthy pay their fair share and not be able to use the currently loopholes. Making a national sales tax progressive rather than regressive

[Avicenna]

Then the tax base is even more narrow. And the rich are known to engage in tax avoidance.
A wife tax base with low rates makes more sense , with strongly progressive income tax rates.

[Sowanaski]

Well the rich avoid it already using investing as a means. They can't do that with this. They buy shoes, they buy tv, they buy furniture, they buy plenty of other things. You keep saying its too narrow of a tax base and the government wouldn't bring in enough revenue. We spend way to much money anyway and need to cut some programs. Put less money into the military and foreign aid and more into infrastructure. Fixing Flint Michigan and Pittsburgh Pennsylvania's pipes as well as our bridges. Their jail could use some assistance as well improving conditions for the prisoners by fixing the building. All of this is infitely less expensive than war. We need to cut back, not spend more.

[Avicenna]

How much tax revenue do you think your very narrow tax will raise?

[Avicenna]

Investing after-tax income definitely isn’t“tax-avoidance“, especially when you factor in that it’s marginal income and that capital gains are not indexed for Inflation.

[Sowanaski]

Investments made after taxed income could in time, increase in value. That added value, called unrealized capital gains, are not taxed unless the person who owns the investment sells/withdraws. Nor should it be taxed until you sell/withdraw. Some are proponents of taxing you every time your investments increase in value. There was brief conversation about this after Biden entered the white house.

As far as how much I think it'l bring in? I don't know I think Americans buy a lot of stuff: Video games, movies, books, furniture, home decor (my wife spends a fortune on this), appliances, lawn equipment, tools, housekeeping services, food services, online streaming etc. The list goes on.

[Avicenna]

If You’re advocating for that narrow of a tax base, you need to have drone idea how much people are spending already before you try to figure out what tax rate you’ll charge on those purchases and what effect the imposition of that rate have on consumer spending.

Now will this sales tax fund federal, state, and local government spending?

[Sowanaski]

That would be ideal, unfortunately I don't think thats possible because we live in a country where we have multiple governments ruling over us at a single time, but I also think the states need to abolish income tax themselves as well and try to find some other alternative if they must.

This revnue can be used to go towards federal costs

[Avicenna]

OK, what do you think a reasonable federal budget would be (annual)?

[Sowanaski]

I can't give you an exact number because I am not working for the government or see their budgets. I just know there is an insane amount of money I saw that they spent a few times. Lots of tiny specific examples that I do not keep written down for reference.

I would cut many programs and reduce spending, as well as abolish the ATF, Federal Reserve, CIA, etc. They are too currupt and need rebuilt from the ground up. Cutting these programs and firing a lot of staff that do nothing would save so much money. Then I'd reevaluate and see how much I had and what was neccesary to keep funded.

[Avicenna]

There is plenty of waste that can be cut, but the purpose of taxes is to find government‘s necessary functions. You need to know how much revenue you’ll need before you start talking about what you’ll tax and at what rates.

Info on government spending is publicly available, especially the federal spending.

[RedInnocent68]

Interesting, but then you’d have to tariff all imports as well. Not sure it would work that well all only really helps the investor class that lives off rents. That’s a no from me, dawg.

[Sowanaski]

A tariff on all benefits could be beneficial to us in that it would force manufacfuring back and bring jobs with it.

[RedInnocent68]

Nothing will bring manufacturing back. The wage gap is too high. You want free-market capitalism, those are the breaks. We need to double down on intellectual capital not romanticize nostalgia by selling lost dreams. Blockbuster’s not coming back either.

[Sowanaski]

Not sure what you are referring to by wage gap.

If you are claiming women make less then men, thats false. The equal pay act of 1963 signed into law by president Kennedy prevents that. If a woman feels she isn't getting equal pay all she must do is bring a lawsuit.

If you mean how inflation just keeps going up and wages are stagnant. Then yes thats a problem and it won't go away unless we elect someone who will take decisive action against the interests of the rest of the US government (because government is owned by corporations) in favor of lowering prices and raising wages for its people.

[RedInnocent68]

Neither. Minimum wage in Nepal versus the US.

[Sowanaski]

Well, ya see, we can take other actions to deflate our currency and increase its value. Going back to the gold standard and getting rid of the federal reserve. This would increase American's buying power by bringing the dollars value up and the current minimum more valuable to the average worker.

[exitseven]

Income tax but it needs to be reformed. A flat tax would be more fair.

[strateguy632]

both possibilities seem bad. if flat means everone 1000$ but rich can give more. if same percent, then 10% of 5000% is 500 but 10% of c. e. o. 500 thousands is 50,000 is too far.

[exitseven]

@strateguy632 The more you make the more you pay. What's more fair than that?

[Sowanaski]

@exitseven It may be fair in your eyes, but it disincentives people to strive for more at best and incentivies them to use loopholes to avoid paying at worst

[exitseven]

If it is a flat tax there are no loopholes. You pay tax on whatever shows up on your W2.

[Sowanaski]

The more you make the more you pay is a progressive tax system and when most people mention tax loopholes that are of the left persuasion, they mean things like: 401k (s), investment gains, deductions through donations and bussiness expenses, etc. None of which are loopholes those who are mad about that have just bought into the proaganda and their anger and their envy. In reality, the rich steal from the poor in other ways through government omnibus spending, lobbying, and doing things like making the price of gas as expensive as possible to drive up prices of everything else. The less valuable the dollar, the more they stand to gain.

[exitseven]

A flat tax does away with all deductions. Without the loopholes some will pay more but most will pay less.

[AngryCarl2]

UK here. You don't have sales tax? We have both. The government are greedy for our money. It wouldn't bother me so much if we got more back in terms of public services. The problem with a sales tax is that it discourages consumer spending.

[Avicenna]

We do have Sales taxes in almost every state

[AngryCarl2]

@Avicenna That figures.

[NamerOfStars]

Not in least. Taxation's based on production, not consumption. As it should be.

[strateguy632]

superb opinion, i say so.

[RoronoaZoro8]

I don't think there should be any tax. Instead the government should have ownership of key industries like housing and oil and make their money from those profits.

[jahaims]

If we actually got the full benefits of paying taxes more people would be okay with what we currently pay. Too much money is stolen from tax payers instead of going to infrastructure, schools, etc.

[slatyb]

The income tax is more progressive. We should replace some of it with a carbon tax.

[Jackblue]

Yes, though it is fine with some food or clothing, we should tax organic food, and silk garments.

[Hispanic-Cool-Guy]

No. We need to pay our taxes. The federal government just needs to seriously stop giving our tax dollars to foreign countries because that's theft of the American people and the U. S.

[Anonymous]

Politicians embezzling funds should be stopped before thinking about taxes on the people. They are 1% of the population but hold 99% of the world’s wealth.

[Snakeyes7]

That makes the most sense. If the government wants money, it is an incentive to not fuck over the economy.

[Anonymous]

Sure but at what percent? It would have to be reasonable still

[KrakenAttackin]

How about a flat tax...