re: #527 Buck

I have some experience with a national sales tax. All of your sources leave out parts. It is not completely their fault as they don’t really have all the details. It is a bit like being against Obama’s health care plan before the election. People didn’t have the details, it was just a concept.

The main objection to a national sale tax is that it would tax poor people who currently pay no tax at all. This issue can be overcome very easily, and is here in Canada. Basically anyone who files an income tax return with income below a certain amount will get a tax refund for the sales tax they paid in the previous year. The people you link to like to assume the worse.

Where would new money come from if not from the poor?

The national sales tax has some advantages. An example is that people who are in the underground economy (and there are a lot of people who simply never even file a tax form) still pay tax on everything they consume. Billions of dollars in tax income is lost every year when people pay for things with cash… under the table, through criminal transactions etc.

These tax avoiders still buy stuff, they just pay cash. However they can’t get everything “under the table”. When they buy or rent a house, they would pay the sales tax. When they buy a car… when they stay in a hotel for vacation… more sales tax collected.

A business that is hiding income from the IRS? Well, everything they buy, all the money they spend is taxed. Any company that wants to recover that new cost? Well they have to also collect it on sales. They are allowed to subtract what they paid from what they collect. I don’t want to go into too much detail here but if they are just in business to lose money, meaning they always show a shortfall, they are no longer allowed to collect.

Another advantage is that is taxes already taxed money. The wealthy buy stuff. They buy lots of stuff. You want an example? Look at all the stuff Bernie Madoff had accumulated. All those “Bankers” the OWS thinks should pay more tax? We know they spend small fortunes every day. Well a national sales tax would collect a huge amount of money from all that consumption.

Your sources underestimate that tax base. I understand why. The Canadian government did the same thing. They started the National sales tax at 7%. It brought in too much money. it has since been reduced to 5%.

Should I continue?

When Herman Cain says that he plans to give the poor a tax break in regards to the sales tax, I’ll start taking his plan seriously (I don’t say I’ll support it just take it as a serious plan that is deserving of hearing the pros and cons of) do you have any proof that Herman Cain plans to do what you suggest he should do? Because the closest I’ve come is hearing him say that he’d nullify the income tax portion of it for poor people (9-0-9) have you heard him anywhere suggest he plans to make it (0-0-9)? for poor people?