What America needs is 30% Federal sales tax

Since the primary article for this news story appeared on the Bezos Post, you get to read it through an ABC affiliate:

Yes, House Republicans introduced a bill to create national sales tax, eliminate the need for the IRS

Snopes fact-checks the news releases of this proposal and discovers them to be TRUE. I suppose we are not to worry, since it stands no chance of passing at this time -- but give it time.

At any rate, the New Republic has noticed:

Under the Fair Tax bill sponsored by Representative Buddy Carter, a Georgia Republican, all income, capital gains, estate, gift, corporate, and payroll taxes would be eliminated. They would be replaced by a flat 30 percent national sales tax on everything you buy.

So how would this national sales tax be enforced?

Actually, it eliminates the IRS entirely, leaving administration of his “fair tax” to magic elves at the Treasury Department who work for free (just as they do for Santa Claus).

Maybe it wouldn't, then. Or maybe they'll just use the military to administer it. They're Republicans, right? Strong defense y'know. I'm trying to imagine the police state that would be necessary to enforce a nationwide 30% sales tax (which might be especially interesting in those states where the sales tax is edging up to 10% already). I'm imagining clandestine networks in which everything is shared so as to avoid paying Federal sales tax.

At any rate, I would expect nothing less than a 30% sales tax from a Congress which awarded committee assignments to "George Santos" (or whatever his real name is).

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1, reporting n the payroll tax is already on "the honor System" - and witholding, thus the popularity of gig work.
2, It would do wonders to stop impulse buying. - that's the real reason why it will never happen.

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On to Biden since 1973

Cassiodorus's picture

@doh1304

(The comedic routine for this, btw, is called "Life is Worth Losing" -- it's worth looking up on YouTube as it really does flesh out the older George Carlin's philosophy)

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"But in America particularly, a deep worry is now consciously gnawing the ruling class—they can see it, feel it: that the American Empire is on its last legs, close to collapse."-- Simplicius

countries. It is not just sales, it is goods, services, almost any type of money
transfer that gets a hitch, usually about 10%. That is the cost of doing business.
The cost is transferred to the payees via the retailers, or what not. If I make
Singapore noodles and sell them at the market, the cost of said noodles
includes the VAT which I will have should pay as a retailer.

It is not like here, where the wholesalers pay taxes, then the retailers pay taxes,
then the consumer pays taxes as well. Plus income tax in the mix. The 30%
flat rate probably avoids that reality, so it is just another additional source of
income for the government.

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dystopian's picture

@QMS QMS wrote

It is not like here, where the wholesalers pay taxes, then the
retailers pay taxes, then the consumer pays taxes as well.

How about a car being sold used 10 times and tax being collected each time? Which is how that works now. So, a car that cost 10K over its life if sold a lot may generate an equal amount in tax!?!?!?

IN general though... as one that sells wholesale to resellers that retail the product, and to retail consumers that were final users... here is how it works...

We do not charge or collect taxes on a wholesale sale to a reseller. The reseller will be doing that when it is sold to the final user. The end consumer. Taxes are not charged on wholesale sales to resellers.

We pay income tax, state tax, etc. on the income, if any, but nothing is done with the sale itself.

At my suppliers wholesale places you can't walk in the door without a resale license. Which can be a dba, fns, etc., a legal doc showing you are in the appropriate business. Your auto repair or restaurant dba or fns, does not get you in the lumber or fish wholesalers.

For instance on my sales in Texas to final user retail customers I have to collect the proper tax for their tax district collections and give to the state every January. I actually do not sell as much as competitors do in Texas, because I have to collect tax here and the 8-9% is a big bump. For every reseller I sell in Texas I have to have a resale certificate, or fns, or dba, on file. Something that shows the intent is resale to final user. When the sales tax is actually collected.

Same in the cabinet business. When I was involved in one, we did not pay tax on the wood at the supermega wood wholesalers that we were going to build a house of cabinets, or a cabinet, with. Again, you generally can't get in a wholesalers door without a resale certificate of some sort. If after we built the product the sale was to a final user, we had to collect tax. If it was to a reseller (like the last big spec house we did) then we do not collect tax.

I did not want to know this much about it either. Wink

peace bro

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We cannot solve our problems with the same thinking we used when we created them.
Look deep into nature, and then you will understand everything better.
both - Albert Einstein

@dystopian

with sales tax each time is a better way of making the point.
I am required by the state to charge tax on service, which I
refuse to do. I could use my dba to avoid tax at retail, but I
don't bother - too much paperwork, holding inventories, etc.
So that gets passed on to the customer. My volume is too
small make much of a difference. That doesn't mean the IRS
would ignore the few chips lost to the state/fed. I just don't care.

Making a living without screwing people is my business. I sell a
car, it doesn't show on the books (on my end). Sell at a loss - why
screw with the complicated tax codes? Not my thing. Again, I am
small change. I pay enough taxes at the fed/state/local levels already.

Know a few souls that tried to make it independent by the book and
eventually failed. The system is rigged against honesty. If one is a big
enough swindler to hire the accountants and lawyers to 'steal' from the
government, there are plenty of loopholes in the tax codes to allow it.

Use it to ones advantage is my thinking. Write everything off and show
minimal income at the end of the year. Otherwise, I would be even more
perpetually broke than I am.

Thanks for clarifying my cascading tax statement.

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Lily O Lady's picture

And I imagine some sort of tax rebate for yachts, corporate jets, etc. would soon follow.

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"The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

@Lily O Lady will lease their jets and limos. Corporations and trusts will make purchases, beneficiaries will receive lots of gifts.
Imagine your prescription medicines going up 30%.

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"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

usefewersyllables's picture

what you ask for. If they ever do this, it’ll probably be “in addition to” instead of “instead of”…

If our lawmakers can screw it up, they *will*.

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Twice bitten, permanently shy.

An added 30% on my electric bill, sewer bill, water bill.
Sounds great. Ok. Add 30% to solar panels. And water wells. And compost sewage systems.
Sound great for somebody.

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"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

Payroll taxes are a flat tax that only apply to the first (roughly) $130K in income. This tax literally never gets mentioned when the financial media talks about taxes.
A sales tax would be even more regressive because the working class spends more on taxable goods than the rich do.

What is needed is a) lift the payroll tax, so all income is taxed. It would still be somewhat regressive, but not nearly as regressive. b) raise the capital gains tax rate so that it higher than income taxes (not below income tax rates like it is today).

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Cassiodorus's picture

@gjohnsit -- is that the ruling elites have found themselves obliged to resort to ever-increasingly-nutty ideas because they cannot imagine an alternative to the existing social order.

Republicans have railed against the IRS and income taxes for decades now, and the resultant social order is one in which billionaires pay very little in taxes. But, ultimately having achieved their proclaimed goals, the Republicans have to keep promising more, otherwise they start to look like Democrats, whose promises shrivel to some very low number once they attain office. So now we have this.

The point of the rest of my diary is that the public is going to try to avoid paying a 30% sales tax, using means that are far more visible than what you see with income taxes, and that the means of repressing the public so that it pays that tax are going to be far more visible as well.

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"But in America particularly, a deep worry is now consciously gnawing the ruling class—they can see it, feel it: that the American Empire is on its last legs, close to collapse."-- Simplicius