Does it make any sense at all to tax American workers for working, American investors for investing and not tax imports?
NAFTA is Not the Main Problem
Early in our nations history, states were not allowed to place tariffs on goods produced in another state. This was done because it was believed that free trade would benefit the entire country.
Most states then wisely instituted sales taxes and derived income from all things purchased in their state. This way the state gained income from all businesses selling things on their turf. It is somewhat like, if a neighbors cows are going to graze (sell things) on our farm, we should share in in the profits.
It is obvious that all of our income taxes and Social Security taxes paid by workers, investors and corporations have to be embedded in the prices charged for American goods and services making us less competitive. Prices of imported items and out-sourced jobs do not include these taxes. Foreign corporations are doing business and earning money in our country and are contributing little or nothing for the privilege. In a global economy, this is insanity!
Replacing our present national income tax and Social Security taxes with a progressive national sales tax would have many benefits. It would:
Only tax things over the poverty level
Tax imports too, instead of only American labor and investment
Also tax things made with outsourced labor
Lower the cost of hiring American workers
Improve our balance of payments
Get more income from industries that hire few workers
(i.e. Athletics, Rock Stars, Movies, CD’s. TV, drugs, etc.)
Ones that earn huge profits & Pay outlandish salaries
Save Social Security & Medicare
Maybe fund healthcare
Eliminate the IRS - audits, loopholes, forms, time & expenses
Make US a partner of every business selling things in the USA
Get taxes off of the top, not after questionable deductions.
All industries (foreign and domestic) would then start contributing their share of the costs of our infrastructure, from which they benefit when doing business here.
It is complicated. Supply and Demand determines the price of things.
The cost (price plus tax) of things would stay about the same. On our products the tax would be added at the end instead of being embedded in the price. Importers would have to adjust their prices because customers are apt to buy fewer items when the tax is added. Consumers will think of the total cost when deciding upon a purchase.
Ralph R. Layman Sr.
I'm sorry I don't think so and NAFTA Is the symbol for overall bad trade agreements, i.e. the China PNTR and the WTO.
So, ok, this is an open blog but I need you to prove your claim by the math. Let's see, trade deficit about ~6% of total GDP...wage ratios anywhere from 3:1 to 60:1 in labor cost savings by global labor arbitrage alone (moving to a foreign nation US industries). ok, so US corporations by keeping their profits offshore, pay no US tax now...but explain precisely how this not only brings in that capital back into the US and explain further how that encourages US multinationals to invest those profits back into the United States with this plan, esp. I'll assume this sales tax will affect their cash outlays on investment within the US itself since it is a tax on all goods within the US. Corporations are shoppers (consumers) too.
If you want to suggest a VAT I can live with that one but something as regressive sounding as a national sales tax, doing away with the IRS, i.e. Hucklebee's plan, you better crank some numbers over here to justify this blog.
i.e. explain how this is not regressive when right now private equity managers are making a killing with a 15% tax rate in effect and explain how the super rich pay more in taxes with this plan. Explain how wealth redistribution will occur under this plan and not enable the robber barons of the 21st century further.
Can't? Well, then how about looking at VAT for this will accomplish what you claim without the introduction of a massive regressive tax. I understand the desire to abolish the IRS and taxing that 1 trillion dollar underground economy. But here you penalize US production equally with foreign imports and that does not help at all in terms of boosting domestic production. This is in effect a hidden VAT but on US producers! So beyond capturing the 1 trillion underground economy, and doing away with the IRS which sounds good to us all, this is a very regressive tax and I'm not talking about the poor, I'm talking about the super rich versus the US middle class and that's where it is astoundingly regressive.
I don't like all the fine points of the FairTax, but it has something called a prebate. It sends everyone a check or bank transfer that is enough to pay all taxes up to the poverty level.
Our businesses would be in a better position globally if Social Security, Medicare, and health insurance were all financed by a tax on all goods and services purchased here including imports. Workers would keep more of their paychecks and even receive a monthly check from the government to cover all taxes up to the poverty level.
The huge disparity of income in our country is largely due to businesses that are not labor intensive like movies, sports, and software. Bill Gates for instance hires programmers in India and the creation and packaging of CD’s and DVD’s is largely automated. Consider the amount of money that would be raised by a 25% tax on movies, CD’s, sporting events and gadgets made elsewhere. Some of our super stars might have to settle for a couple million dollars less. The loopholes found by CPA’s and tax lawyers in our tens of thousands of pages of IRS regulations further exacerbates the situation.
It is very doubtful whether thieves, drug dealers, prostitutes and illegal aliens are now filing these earnings on an income tax.
Progressive National Sales Tax
So far as I know, the words "progressive" and "sales tax" are incompatible.
The "sales tax" is about as regressive as you can get.
Sales Tax is Regressive
Liberals seem to have closed minds on thie subject. What was a wonderful idea seventy of eighty years ago (the progressive income tax) is out of date in a global economy I don"t favor the FairTax for many reasons, but it would send a check or bank transfer to every person to pay all taxes up to the poverty level. So only non essentials are taxed.
Your employer really pays your income taxes and social security taxes. Usually you do not even see or feel the money. Your taxes are really just a part of what your employer charges for whatever he sells.
Buy American to support our government. Buy imports and we get nothing..
I would prefer just charging the retailer 20% of his gross sales. We could fund all kinds of social services
Imagine getting 20% o ever CD, Movie, Athletic Ticket
Unfortunately you are claiming this national sales tax is going to do what you claim and it will not. A VAT would. This is a value added tax.
I don't think Progressive taxes are "out of date" in fact the Progressive tax code is one of the reasons we built up a middle class in the 20th Century.