danw@oliven.UUCP (danw) (03/09/85)
[] >Let's put the question another way: > >Why should two people living together without the >formality of marriage pay less taxes than a formally >married couple? > >Whether the question is put this way, or the way it >was phrased in previous questions, it is not always true. >If two people are living together, not married, >but one earns all the income, then they would pay >more taxes than if they were married! > >Can anyone suggest a solution which would not have any >inequities. > >Herman Silbiger Yes, i think i can. danw ------------------------------------------------------------------- GIVEN: 1 Our income tax system stinks. (other than CPA' & IRS agents NO one has a good word to say about it ) GIVEN: 2 The shoe store sells shoes GIVEN: 3 Congress sells loopholes (the current tax mess IS the aggregate of all the past loop-holes congress has sold) GIVEN: 4 No social institution, least of all the US congress ever voluntarily gives up political power. GIVEN: 5 People who babble on about congress passing a 'flat rate income tax' are hoplessly naive. ------------------------------------------------------------------- Anyone can point out the obvious, what is the answer? ------------------------------------------------------------------- A grass-roots movement to pass a constitutional amendment that will make all forms of income tax illegal - and replace it dollar for dollar with a Value Added Tax (VAT). PROVISIONS: 1 It is illegal for any state, federal or local government in the US to tax corporate or individual income in any way. 2 The VAT maximum total percentage tax is set by a referendum constitutional amendment and can ONLY be changed by the same process. This total percentage is the total of all state , federal & local VAT's . This will have the effect of a NATIONAL prop. 13 3 Loophole no.1 staple food items are exempt. (It is legally impossible to 'add value to' food. 4 Loophole no.2 items for export are exempt. US VAT is only applied to items sold in the US. 5 THERE ARE NO OTHER LOOPHOLES. ------------------------------------------------------------------------------ It is essential that this be done as a constitutional amendment, effectively bypassing the congress. Otherwise the entire exercise will become counter productive. They will KEEP income tax AND add the VAT ! ------------------------------------------------------------------------------ ->QUESTION: Isn't VAT just a sales tax? ANSWER: NO. With a 10% sales tax $2.00 pair of socks cost $2.20 With VAT a $2.00 pair of socks costs $2.00 ADVANTAGES TO: Left of center stateists. VAT retains the one redeeming feature of personal income tax withholding , it is invisible to the user. (people are much more enthusiasm about redistribution of wealth if they don't realize it is THEIR wealth that is being reassigned.) Libertarians Anything is better than the current system. Right of center stateists. A taxpayers revolt is brewing , there is the ever present danger that the peasants will turn to the easy answers of socialism if given a chance. Lock in the status quo with a VAT. ->QUESTION: So who pays the tax? ANSWER: Business (non export or non food) If VAT is 10% and a business increases the value of its product by $2.00 then it must send the government 20 cents. ADVANTAGES TO: Left of center stateists. It will appear to the people that they pay nothing, and the greedy capitalists get stuck. Libertarians Those of you who own businesses know that you send checks to the government all of the time. Nothing changes. Right of center stateists. Businessmen will love it. They get to pass the cost of the VAT directly on to the consumer. Exports are indirectly subsidized, allowing them to compete unfairly in the export markets. ->QUESTION: Who decides that a business has added value and how much? ANSWER: The same people you are now dealing with at the IRS . We just change the name of IRS to something else. VAS?? ADVANTAGES TO: Left of center stateists. Democrats have been changing the names of bankrupt social programs for years. Make it appear that IRS is being abolished. Reassure IRS agents , CPA's etc. that they have job security with the new VAT bureau. (accept lots of money from their PACs) Libertarians Gradualism is the buzz word , our time will come later. see below for advantages. Right of center stateists. This is business as usual. ->QUESTION: Who decides what the maximum amount VAT will be? ANSWER: The people do , with a constitutional amendment. If it is decided that a fair flat rate tax rate is 18% then the MAX VAT total tax rate will be 18% (for example a 100% total VAT would double the cost of items as seen by the consumer) ADVANTAGES TO: Left of center stateists. Fairness, hit 'm with fairness , ALL business appear to pay the same VAT. Libertarians The government is a gigantic rabid dog that is running loose and growing in size and ferocity. A maximum tax rate cast in granite,(by a constitutional amendment) will fix for all time, the length of the leash that this dog will be shackled to. Right of center stateists. Actually they don't , the TOTAL is fixed by law , what share of the total any given business will pay is subject to negotiation.(Endless opportunity for campaign contributions.) ->QUESTION: You mean I get to keep 100% of my income? ANSWER: YES. ADVANTAGES TO: Left of center stateists. You can't win them all. But cheer up, people will sooner or later get tired of hiding their money in banks and buy something with it. At that point we can redistribute their wealth. Libertarians With big brother out of the income business ,we can achieve a great measure of personal and financial privacy. There would be no barriers to passing Swiss style Banking security laws. Right of center stateists. Is there an individual or a business man that won't jump for joy when you tell them that you have IRS off their back once and for all. Bankers will give massive campaign contributions for Banking security laws. (and a chance to compete for the billions the Swiss have hidden away) ->QUESTION: Is VAT fair? ANSWER: Yes. ADVANTAGES TO: Left of center stateists. Everyone pays the same VAT by purchasing goods in the USA. Everyone pays the same rate NO exceptions. It is the ultimate flat rate tax. It is inherently fair. Libertarians This is better than dealing with the IRS. Lets not oppose it. With time people will see the advantage of having the dangerous dog of government on a leash. Then we can begin pointing out that an even shorter leash will be even better. Right of center stateists. The VAT cost is hidden in the price of each item, the effect is the same as inflation. If the average take home pay is increased by the same amount as the cost of living increase, no change in average standard of living will result. No public outcry. ->QUESTION: Can the VAT be evaded? ANSWER: By individuals, No. (it would be necessary to smuggle foreign goods to avoid paying the hidden VAT included in the cost of all goods for sale in the US) ADVANTAGES TO: Left of center stateists. This is all pervasive big brotherism it will make socialists everywhere feel good to have thought of a tax that can't be evaded. Libertarians Give what is Ceasar's unto Caesar. Right of center stateists. Conservatives are going nuts trying to stop the drug industry. There are coke dealers driving around in Mercedes 450's who don't pay a dime of tax. It will make the conservatives feel good to realize they have thought of a way to tax the multi billion dollar drug industry. ->QUESTION: Will anyone pay VAT who does not now pay tax? ANSWER: Yes. The entire underground economy will be taxed at the same rate as everyone else. ADVANTAGES TO: Left of center stateists. Think of all that money just waiting to be redistributed. Libertarians The government will soon be unable to get along without this 'new' money. Legalization is only possible after a wide spread social acceptance of the 'necessity' of this kind of business. Right of center stateists. Think of all that money just waiting to be taxed. ->QUESTION: But will VAT feed the poor? ANSWER: Yes. ADVANTAGES TO: Left of center stateists. Liberals will claim they were for it all along. By exempting staple foods from VAT , food will be held at an artificially low price. The poor will be able to feed themselves with much less difficulty. Libertarians As Libertarians we can argue: Look at what a good deal food is. If we have our way (eliminate government) all goods will then become as cheap as food is now. Right of center stateists. A good cheap way to feed the poor is good politics.(they remain docile and apolitical) ->QUESTION: Will VAT increase exports (help deal with the massive trade imbalance)? ANSWER: Yes. ADVANTAGES TO: Left of center stateists. Liberals have long been crying about foreign 'dumping' and crying for protectionist measures. The 'dumping' is not the result of foreign philanthropy , but rather the result of foreign VAT's that exempt exported goods. (a fact that has been kept from most americans). Liberals will label the VAT a protectionist measure that gives 'those foreign capitalists' a dose of their own medicine. Libertarians Increased exports are a good thing. Right of center stateists. American export business is hard hit by the overvalued dollar. Republicans will claim they support the VAT because it is not protectionism but rather an economic 'incentive' to export. ->QUESTION: Will VAT encourage savings and investments and entrepreneurism? ANSWER: Yes. ADVANTAGES TO: Left of center stateists. None. All of the above mentioned activities are terrible and must be discouraged. We will however support the measure because of its other excellent socialist features. Libertarians 100% of your income is yours reguardless of its source. Very libertarian. Interest, dividends ,capital gains ... all yours, keep it all. Reinvest to your hearts content this is capitalism for everyone. Right of center stateists. People will quit chasing bizarre 'tax free' investments and tax shelters and simply put the money where it earns the best return Reinvesting to earn more 'income' won't be penalized. Large pools of investment money will build up and drive interest rates down. (conservatives claim to believe in suply and demand). Lower interest rates are good for General Motors and the Republican party. ->QUESTION: Will the rich pay their fair share? ANSWER: Yes. ADVANTAGES TO: Left of center stateists. The question was really 'how can we make the rich pay more than I do'? By having a rich life style (conspicuous consumption) the wealthy will pay much more in VAT as the result of having bought more. Libertarians This is a good start , in time we can work for making all tax voluntary. Right of center stateists. The wealthy enjoy being able to display their ability to afford conspicuous consumption. Nothing really changes. Besides capital gains on investments are now FREE of tax. ------------------------------------------------------------------------- danw
plh@ukma.UUCP (Paul L. Hightower) (03/14/85)
(The original posting suggested replacing our income tax with a value added tax, known as VAT.) While you are passing constitutional ammendments, why not a constitutional flat tax (which solves the marriage tax problem) ? A VAT sounds like an accountant's dream, and a businessman's nightmare. Personally, I'd rather KNOW just how much I'm paying in taxes. Under VAT, your $2.00 shoe would simply cost more.