Emancipating America from the Income Tax: How a National Sales Tax Would Work
by David R. Burton and Dan R. Mastromarco
David R. Burton (J.D. University of Maryland) is a partner in the Argus Group, a Washington-based law and public policy firm. Dan R. Mastromarco (LL.M. Taxation, Georgetown) is a partner in the Argus Group and an adjunct professor at the University of Maryland, International Management Program.
Executive Summary
This study demonstrates how the individual and corporate income tax, the capital gains tax, the estate and gift taxes, and non-trust-fund excise taxes all could be replaced with a national sales tax (NST). The NST would exempt low-income Americans from tax and raise the same amount of revenue currently collected. The ideal NST plan would include the following features:
* A 15 percent sales tax on the final purchase of goods and services at the retail level. The NST would be similar to state sales taxes. The rate should decline in future years to 10 to 12 percent as economic growth allows more revenue to be raised at a lower rate and government downsizing continues. * A universal rebate for every household, exempting all consumption up to the poverty level. That would mean that the first $18,588 of consumption each year for a family of four would be tax-free. The rebate could be provided as a refundable credit against the payroll tax. * Reimbursement to states and retailers of the cost of collecting the national sales tax. * Abolition of the Internal Revenue Service. The states should bear the primary responsibility for administering the national sales tax. The IRS would be abolished, and a much smaller, less intrusive federal excise tax bureau would collect trust fund excise taxes such as the gasoline tax. The Social Security Administration would enforce and collect payroll taxes.
quote:Originally posted by HILANDER: HMMM, I like it too Art, holy chit we agree. Now I gotta go sit in the hot tub. 5 miles gets farther the older you get and the more you smoke.
does this plan allow for fitness-challenged bureaucrats to do physical labor?
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I like it in theory. Always have. To be honest fifteen percent is a tad high simply because of the increased revenue generated from tourists who buy goods and services and would have never been subjected to an income tax. The lower the better in my book. I just don't like giving government money... They never spend it wisely.
-------------------- Spend Word For Word With Me And I Shall Make Your Wit Bankrupt. Posts: 1326 | From: Here | Registered: Oct 2005
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See if we had begun talking tax theory there would have never been all the commie talk... I mean you are even beginning to come around when it comes to QBID I really am proud
-------------------- Spend Word For Word With Me And I Shall Make Your Wit Bankrupt. Posts: 1326 | From: Here | Registered: Oct 2005
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The tourist income may not amount to much. They typically can apply for a refund of any VAT they pay. Not all do and there are limits and you have to jump through all sorts of hoops to get them.
I am in favor of a VAT as well.
Posts: 559 | Registered: Oct 2005
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I like it...not sure how the rebate would work...how would "consumption" be tracked. Sounds like in interesting idea though.
Posts: 722 | From: Richmond, Va , USA | Registered: Mar 2004
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As far as a consumption tax what I've read and heard is you basically have your openeing back account balance, and then an ending bank account balance. There would still be home mortgage and health insurance write offs.
You write those off and then the difference is what you pay tax on. Consumption tax isn't the same things as a national sales tax I don't believe because you would still file a 1040 at the end of the year with the above mentioned.
We really need to change the income tax laws, income tax is a huge expense.
Posts: 562 | From: NY | Registered: Jul 2005
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