REPUBLICANS Plan Push For ELIMINATION OF IRS

[MKSheppard]

Now, imagine yourself as a business owner, trying to comply with that
52,000 page tax code. And the full knowledge that if you fuck up and
miscalculate somewhere, the IRS can come and fuck your life up.

[Ghost Rider]

See, see, that's why I'm going to be an auditor instead of a tax accountant.

Have fun...the last one I dealt with told me of the newest funnest rule.

For every year that the person is being auditted, you have to stay at the place of audit for one hour per year.

And seriously last time(which was two weeks ago) my boss handled this...poor girl they gave us stayed with us for 7 hours......chatting.

Though the things you learn about the IRS from an senior agent....hell in a handbasket would be puting it lightly.

[MKSheppard]

Here's how I'd do it:

Zero taxes AT ALL on basic foodstuff staples, such as Milk, Bread, etc,
no state or local or federal at all, so the poor don't get screwed. However
stuff that you don't need to survive gets taxed, like DVDs.

[Ghost Rider]

Now, imagine yourself as a business owner, trying to comply with that
52,000 page tax code. And the full knowledge that if you fuck up and
miscalculate somewhere, the IRS can come and fuck your life up.

That's why you hire someone or get an EA to defend you in court.

I may not like most of the clients I deal with, but I do acknowledge they came to me because they know how fast the IRS can rape them.

[Joe]

See, see, that's why I'm going to be an auditor instead of a tax accountant.

Have fun...the last one I dealt with told me of the newest funnest rule.

For every year that the person is being auditted, you have to stay at the place of audit for one hour per year.

And seriously last time(which was two weeks ago) my boss handled this...poor girl they gave us stayed with us for 7 hours......chatting.

Though the things you learn about the IRS from an senior agent....hell in a handbasket would be puting it lightly.

No, I'm talking about being a stuff auditor for an accounting firm, not for the IRS.

[MKSheppard]

That's why you hire someone or get an EA to defend you in court.

Why the fuck should I have to hire someone to do my taxes? The money
I save from that, could be put to better use. Imagine the cash that's burned
each year by having to keep auditors and CPAs on hand because of
the fucking IRS.

Now compare that against the jobs of those IRS agents....and the
huge tax consultant industry here.....

[Lonestar]

Fuck this shit, I'd rather pay a simple flat tax then fuck with the 1040s.

Me and Willie are a lot alike. He's a Texan, I'm a Texan. He's a Guitar Player, I'm a guitar player. He's had tax trouble, and I spent 7 hrs on the 1040 last year. E-Z my ass.

[Ghost Rider]

See, see, that's why I'm going to be an auditor instead of a tax accountant.

Have fun...the last one I dealt with told me of the newest funnest rule.

For every year that the person is being auditted, you have to stay at the place of audit for one hour per year.

And seriously last time(which was two weeks ago) my boss handled this...poor girl they gave us stayed with us for 7 hours......chatting.

Though the things you learn about the IRS from an senior agent....hell in a handbasket would be puting it lightly.

No, I'm talking about being a stuff auditor for an accounting firm, not for the IRS.

Then you'll have fun

...though in six months I have my brand spanking new EA liscene...which will mean I get to defend these people in court...and dealing with the IRS insane logic.

[Ghost Rider]

That's why you hire someone or get an EA to defend you in court.

Why the fuck should I have to hire someone to do my taxes? The money
I save from that, could be put to better use. Imagine the cash that's burned
each year by having to keep auditors and CPAs on hand because of
the fucking IRS.

Now compare that against the jobs of those IRS agents....and the
huge tax consultant industry here.....

Then in the end how will one deal with that that supporting an infrastructure as large as the US?

Seriously it's fucked up because the government plays the game of trying to balance itself on a ball that's always rolling without trying to tell everyone to pay 2/3 of their paycheck to them so that they can justify what they call government spending.

As cut and dry it looks it hardly is.

That and as I said the IRS affords them a power no other part of the government does.

[Uraniun235]

Income tax consulting is a rather large business. I'd have to imagine that streamlining the process of paying taxes would kill quite a few jobs.

Great. So we're beholden as a nation to propping up what could otherwise be an obsolete profession, costing us billions of dollars that could be more productively spent.

[Master of Ossus]

Income tax consulting is a rather large business. I'd have to imagine that streamlining the process of paying taxes would kill quite a few jobs.

That's really not a good argument. The government cannot and should not hand out welfare by forcing us to create jobs that contribute nothing to the net welfare of the public.

Every year, Americans spend millions of hours working on their tax returns. That is not acceptable, which is why I tend to favor simplifications of the tax code and even a flat tax rate, but I don't support an elimination of income tax.

[Durandal]

I was never arguing for or against it, merely pointing out what would happen. If you want to dissolve the IRS, you have to realize the impact of that decision.

In any case, it simply won't ever happen.

[LMSx]

Correct me if I'm wrong, but can't the states simply raise their income taxes to adjust? That could wipe out a lot of the gains for rich folk.

[Joe]

Correct me if I'm wrong, but can't the states simply raise their income taxes to adjust? That could wipe out a lot of the gains for rich folk.

What's the point? The revenue would go to the states, not to the federal government. Besides, the purpose of a good tax system is to raise money, not deliberately fuck over rich people.

[Darth Wong]

What's so unfair about a pure consumption tax? From a social standpoint, it would be the most perfectly fair system; you get taxed on your lifestyle, not your income. The Paris Hiltons of this world would actually have to pay tax under such a scheme.

Anyway, this is probably just posturing just so he can say that certain individuals voted against it. There are a lot of reasons why nobody would ever implement such a tax. For one thing, it would strongly encourage saving rather than spending, and the economy is currently structured in such a manner that people need to be constantly spending themselves deeply into debt or the whole thing will collapse.

[MKSheppard]

Anyway, this is probably just posturing just so he can say that certain individuals voted against it.

Well, considering that this man invaded Iraq, well, you never know

[Arthur_Tuxedo]

What's so unfair about a pure consumption tax? From a social standpoint, it would be the most perfectly fair system; you get taxed on your lifestyle, not your income. The Paris Hiltons of this world would actually have to pay tax under such a scheme.

Anyway, this is probably just posturing just so he can say that certain individuals voted against it. There are a lot of reasons why nobody would ever implement such a tax. For one thing, it would strongly encourage saving rather than spending, and the economy is currently structured in such a manner that people need to be constantly spending themselves deeply into debt or the whole thing will collapse.

Well, there are two main things going against a sales tax.

1. Poor people spend 100% (or more using credit) of their monthly income, so it hits them harder. Even if you exempt basic necessities, the poor simply don't save their extra money. You could argue (correctly) that they therefore deserve it if they spend what little extra they have on shit they don't need, but it doesn't serve the societal good for them to get poorer and poorer.

2. When the rich buy less yatchs and such things, it's the middle and lower class person that bears the burden of the tax, because they're the ones who own and work at the businesses who produce luxury goods.

I've said it before, but we're too focused on flows when we need to be looking at assets. Even the very rich have the vast majority of their wealth in their homes, cars, stocks, and other things that cannot be hidden away in Swiss bank accounts or dressed up as something else.

Last time I presented this argument someone (Howedar I believe) said that 1 to 2% of total assets per year wouldn't be enough, and I didn't have a good response, but consider this: What's the total value of all the privately owned real estate in the Bay Area? Or New York? It boggles the mind. Add up all those cities. Still think 1% tax per year of total assets wouldn't pull in enough revenue?

Why isn't anyone talking about this? One, mainstream economics doesn't deal with stocks very well, but two, it would make it a lot harder for the rich and the very rich to avoid paying their fair share.

[Mr Bean]

Oh, those poor, discriminated-against rich people. I feel so sorry for them. Maybe they should go home and cry in their swimming pools if they feel so oppressed.

Oh I am so sad, I am a poor rich person with all my money and the mean old goverment is opressing me on my taxes

But wait if I move my plant to Mexico or Asia I won't have to pay ANY taxies and I get to put out of work all those AMERICAN workers with their minium wage salries and their benfits plans

Or because of the Mean old US I'll pay ten cents and hour and can excute the empolyees I don't like

Iceberg, don't piss of or pick on the Rich, not everyone is a fucking moron with a rich daddy

[Hamel]

Oh, those poor, discriminated-against rich people. I feel so sorry for them. Maybe they should go home and cry in their swimming pools if they feel so oppressed.

Oh I am so sad, I am a poor rich person with all my money and the mean old goverment is opressing me on my taxes

But wait if I move my plant to Mexico or Asia I won't have to pay ANY taxies and I get to put out of work all those AMERICAN workers with their minium wage salries and their benfits plans

Or because of the Mean old US I'll pay ten cents and hour and can excute the empolyees I don't like

Iceberg, don't piss of or pick on the Rich, not everyone is a fucking moron with a rich daddy

OH PLEASE

Indians have been complaining about losing their jobs to even lower priced areas. Same shit happened to Mexico, and look at what a hellhole it is.

[LMSx]

Correct me if I'm wrong, but can't the states simply raise their income taxes to adjust? That could wipe out a lot of the gains for rich folk.

What's the point? The revenue would go to the states, not to the federal government. Besides, the purpose of a good tax system is to raise money, not deliberately fuck over rich people.

That's not the issue at all. I bring this up not because of states fucking rich people, but because in 2001 after Bush passed the tax cuts through Congress, several states almost cancelled it out by slightly nudging up the tax rates, under the theory that people won't notice a net change of 0. (Or will be happy with a $300 rebate if no one mentions they could have had a $500 rebate)

That's what I would foresee happening if the federal income tax suddenly disappeared. States, instead of choosing between cutting after-school programs and elderly nursing, would instead simply raise their share a bit to take advantage of their citizen's sudden wealth.

Of course this "wealth" would all be on paper, and would in large part be negated by the extra cost of a sales tax, but its still something I think the states will jump at the chance to do since the whole reason most states are in a budget crisis in the first place is because none of them think ahead to the future at all. (For example, Washington state cashing in its tobacco settlement money for a one year lump sum to balance the budget that year)

[Master of Ossus]

What's so unfair about a pure consumption tax?

It's a massively regressive tax system.

From a social standpoint, it would be the most perfectly fair system; you get taxed on your lifestyle, not your income. The Paris Hiltons of this world would actually have to pay tax under such a scheme.

True, but as you pointed out it risks economic damage by discouraging spending. That can have potentially disastrous effects on the economy, despite the potential "fairness" of it. Additionally, it would harm people who do things like take out loans to buy houses and cars, by changing the time-scale over which they would pay off their taxes.

[Darth Wong]

What's so unfair about a pure consumption tax?

It's a massively regressive tax system.

How is it more "regressive" than any other tax system?

From a social standpoint, it would be the most perfectly fair system; you get taxed on your lifestyle, not your income. The Paris Hiltons of this world would actually have to pay tax under such a scheme.

True, but as you pointed out it risks economic damage by discouraging spending. That can have potentially disastrous effects on the economy, despite the potential "fairness" of it.

Of course. That to me is the biggest hurdle: the fact that the economy is basically predicated upon individual deficit-spending.

Additionally, it would harm people who do things like take out loans to buy houses and cars, by changing the time-scale over which they would pay off their taxes.

I don't see why. Consumption taxes can always have exemptions, and a primary dwelling would no doubt fall into that category since it is currently a huge tax exemption already (the mortgage interest tax deduction). As for cars, you have to take out a loan to pay it off, and the taxes would be included in that loan, so they would be paid down over a long period of time.

[Master of Ossus]

What's so unfair about a pure consumption tax?

It's a massively regressive tax system.

How is it more "regressive" than any other tax system?

There are fixed costs associated with living, and the poor spend a significantly greater proportion of their total income than the wealthy. I remind you that only a few percent of Americans control more than 50% of the liquid capital because they are saving money. Meanwhile, the impoverished have to pay out virtually their entire earnings, if not all of it. Someone living "pay-check to pay-check" would be taxed on one hundred percent of their earnings. Even if someone making millions annually lived a ridiculously posh lifestyle and spent maybe half of their earnings, they're still only being taxed on 50% of what they make, which sends them further ahead since they can then invest that and make more money in the future. Even if they're charged taxes when they eventually spend their money, they still have a tremendous advantage from being able to make interst on the funds they manage to save.

Of course. That to me is the biggest hurdle: the fact that the economy is basically predicated upon individual deficit-spending.

The economy doesn't really care whether someone's spending in a deficit or not, it just requires that someone somewhere be willing to spend money that other people have saved.

I don't see why. Consumption taxes can always have exemptions, and a primary dwelling would no doubt fall into that category since it is currently a huge tax exemption already (the mortgage interest tax deduction).

You would need to set it up in such a way that there are tremendous exemptions for "necessities," but defining them would become problematic. In addition, it would encourage people to invest in different kinds of capital and would be prone to loopholes allowing the wealthy to dodge taxes while living good lifestyles.

As for cars, you have to take out a loan to pay it off, and the taxes would be included in that loan, so they would be paid down over a long period of time.

Let's say I take out a loan for $100 today, and spend all of it on a car. If I were taxed $10 for spending on the car, I would now have to pay off $110 and would have to begin earning that money back in order to pay it off. However, if I were instead taxed when I EARNED the money, I would need to pay less money due to inflation naturally driving the value of money against goods and services down. The spending tax plan forces people buying cars and houses to pay money NOW instead of LATER when they actually earn the income to pay off their debts, which DOES make a difference in terms of the actual value of the goods they will receive.

[MKSheppard]

There are fixed costs associated with living, and the poor spend a significantly greater proportion of their total income than the wealthy.

Then simply just don't fucking tax the basic staples needed to live.

However, DO tax DVDs.

[Darth Wong]

It's a massively regressive tax system.

How is it more "regressive" than any other tax system?

There are fixed costs associated with living, and the poor spend a significantly greater proportion of their total income than the wealthy.

Once you remove food and rent, I'd imagine that the tax burden of the poor becomes much more manageable. And you could have a surtax on obscenely ostentatious luxury items such as Ferraris. This is hardly any more regressive than a murderously complex loophole-filled income tax system where rich people routinely find a way to live lifestyles of obscene luxury while declaring little or no income on paper.

Of course. That to me is the biggest hurdle: the fact that the economy is basically predicated upon individual deficit-spending.

The economy doesn't really care whether someone's spending in a deficit or not, it just requires that someone somewhere be willing to spend money that other people have saved.

The economy is immensely dependent upon individual spending, which is why the consumer confidence index is so closely watched. This is, as I've said before, the biggest problem.

You would need to set it up in such a way that there are tremendous exemptions for "necessities," but defining them would become problematic.

I don't see why. Groceries would be considered a necessity, as would rent . You could also have taxes on things like clothing that only kick in for items costing over $100, for example.

In addition, it would encourage people to invest in different kinds of capital and would be prone to loopholes allowing the wealthy to dodge taxes while living good lifestyles.

WTF? How would such a system make it easier for the wealthy to find loopholes than the current system and its tens of thousands of pages of regulations?

As for cars, you have to take out a loan to pay it off, and the taxes would be included in that loan, so they would be paid down over a long period of time.

Let's say I take out a loan for $100 today, and spend all of it on a car. If I were taxed $10 for spending on the car, I would now have to pay off $110 and would have to begin earning that money back in order to pay it off. However, if I were instead taxed when I EARNED the money, I would need to pay less money due to inflation naturally driving the value of money against goods and services down. The spending tax plan forces people buying cars and houses to pay money NOW instead of LATER when they actually earn the income to pay off their debts, which DOES make a difference in terms of the actual value of the goods they will receive.

Don't be silly; unless the VAT tax rate is actually equal to the income tax rate, this is nothing but a large assumption. And since the government would be getting the money up-front, it would effectively get more money (the value being the so-called "present value" rather than the annuitized amount), so it could afford to levy a lower tax rate on big-ticket items such as automobiles while still getting just as much tax revenue once you perform the proper calculations to account for PV vs annuitization.