Bush's Tax Plan

U

Unintentional

Active Member
Bush's Tax Plan

Okay, here it is:

Every household get a $200 a month check. There will be a 20% national sales tax, so the first $1000 stuff you buy will be tax free (20% of $1000 is $200). Stuff that you don't pay sale tax on now, you will not pay sale tax on in future (i.e. rent for example).

No income tax. No FICA tax. You get your check (minus state and local taxes), but there will be NO federal withholding. No IRS tax forms to fill out EVER!! No IRS!!!

Personally, if this goes through, I need to do some major renegotiating with my boss. My business expenses that I am partially reimbursed for have put me in the tax free category for the last two years due to deductions. Now I gotta pay %20 on all my expenses after $1000 of paying for expenses?
 
Bush's Tax Plan

Sounds great Uni, for campaign rhetoric, that is. Never gonna happen under the current system. Too much structurally in place that would have to be destroyed (bureaucracy, tax planning and return preparation industry, etc.) for this to see the light of day. The life insurance industry, tax industry (CPA's, tax attys. H&R Block, Jackson Hewitt, Turbo Tax, etc.), and God knows who else would lobby very strongly against this. It would cut them out of a paycheck.

We'd have to go through some total overhaul of the current govt. structure to be able to have a simple tax system as outlined. But the Republicans floated a trial balloon a couple of weeks ago, and it did well in the polls. So now they're "hooking" those who want to believe that Bush will revamp the tax system in his second term for votes. Even if he was able to get something before Congress, the Democrats would howl bloody murder. A national sales tax would shift a higher tax burden on lower incomes because they spend all of theirs. The higher incomes would pay less, proportionately, because they tend to save some of their income, and some of their income comes from investments.

Now, I'm all in favor of the proposal as outlined in your post. Hell, I'd actually kiss George Bush if he was able to get that through, and permanently eliminate the current tax structure all in one fell swoop. The other side of this proposal is that it would have to be "phased in" while the current tax structure would be "phased out" In the end we'd probably wind up with both an income tax and a national sales tax just like the UK. Politicians don't like to give up sources of tax revenue. Spending is what get's politicians re-elected. That would suck BIG time.

Nice to dream though.

Cary
 

Bush's Tax Plan

If that goes through, EXPECT state taxes to rise because if I am not mistaken, the govt. will no longer be able to send money to each state because the did not collect it on a grand scale. I have to agree with Cary, it's all smoke up the backside and lots of glad handing. Also EXPECT taxes on the Internet, for I have never seen the govt. drop something from one hand and NOT pick something up with the other hand while you were watching the empty hand wave.
 

Bush's Tax Plan

Also, Bush said he vowed to keep his tax cuts permanent. Now, if he was seriously considering that, it wouldn't fit in with tax reform.

I talked it over my wife and if they did do the plan like I outlined, it should be 200$ per person per houshold per month. That is the only way I would not be paying boo-coo more taxes.
 
Bush's Tax Plan

Hey Cary My Brother!! Doesn't this mean that : 1 social security goes broke much faster and :2 the fan gets hit faster than we thought bringing the collapse that much faster if this tax cut goes through?

Hell, isn't the only thing keeping the US affloat are our taxes the govt steals from us each month and once a year??
 
Bush's Tax Plan

Originally posted by CaryP@Sep 3 2004, 06:02 PM
Sounds great Uni, for campaign rhetoric, that is. Never gonna happen under the current system. Too much structurally in place that would have to be destroyed (bureaucracy, tax planning and return preparation industry, etc.) for this to see the light of day. The life insurance industry, tax industry (CPA's, tax attys. H&R Block, Jackson Hewitt, Turbo Tax, etc.), and God knows who else would lobby very strongly against this. It would cut them out of a paycheck.

We'd have to go through some total overhaul of the current govt. structure to be able to have a simple tax system as outlined. But the Republicans floated a trial balloon a couple of weeks ago, and it did well in the polls. So now they're \"hooking\" those who want to believe that Bush will revamp the tax system in his second term for votes. Even if he was able to get something before Congress, the Democrats would howl bloody murder. A national sales tax would shift a higher tax burden on lower incomes because they spend all of theirs. The higher incomes would pay less, proportionately, because they tend to save some of their income, and some of their income comes from investments.

Now, I'm all in favor of the proposal as outlined in your post. Hell, I'd actually kiss George Bush if he was able to get that through, and permanently eliminate the current tax structure all in one fell swoop. The other side of this proposal is that it would have to be \"phased in\" while the current tax structure would be \"phased out\" In the end we'd probably wind up with both an income tax and a national sales tax just like the UK. Politicians don't like to give up sources of tax revenue. Spending is what get's politicians re-elected. That would suck BIG time.

Nice to dream though.

Cary
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Also, if you do a little of the math, you can't find out where the 200 a month times 75 million is going to come from.
 
Bush's Tax Plan

Actually that is only 15 billion a month. A mere drop in the bucket. Even if they did it for each non-incarcerated adult, it would only be 45 billion a month tops. Since they usually collect 2 trillion a year, they would need to have the national sales tax bring in 2.5 trillion, so they can give back at a rate of 45 billion a month. It is kind of a neat idea, because this way the poor would still their earned income, and if they spent less than $1000 a month they would actually get more from the government than they pay in taxes.
 
Bush's Tax Plan

"Also, if you do a little of the math, you can't find out where the 200 a month times 75 million is going to come from."

Well considering there are about 260,000,000 people in the US times $200
per month in a check, we're talking $52 billion per month in tax credit checks, or $624 billion per year. If you tax the GDP of the US economy, currently $11 trillion at 20% the govt. would generate $2.2 trillion in revenues, close to current tax revenue levels. Backing out the $200 per month, the govt. would net $1.56 trillion in net taxes collected. Govt. spending is currently pushing $3 Trillion per year, with about 68% in required spending (entitlement programs, interest and debt payments, etc.) and only 32% in discretionary spending (military and defense, homeland security, infrastructure, govt. bureaucracy, etc.). Under this scenario the govt. budget deficit would balloon to over $1 Trillion per year. As the baby boomers retire the deficit would spiral out of control with Social Security and Medicare payments, not to mention increasing interest and debt payments. The only alternative would be to monetize the debt - print new currency out of thin air used to retire govt. debt. The dollar and govt. debt would crash and burn bringing about a cataclysmic financial and economic collapse.

"Hey Cary My Brother!! Doesn't this mean that : 1 social security goes broke much faster and :2 the fan gets hit faster than we thought bringing the collapse that much faster if this tax cut goes through?

Hell, isn't the only thing keeping the US affloat are our taxes the govt steals from us each month and once a year??"

The only thing keeping the govt. going is the expansion of debt/credit and newly printed up currency (our "real money" was transferred to the Fed back in the 30's). Yes, tax revenues help, but without expanding debt and money supply, the jig would have been up decades ago. Social security will go broke sooner than most expect, regardless of the tax system. It is structurally impossible to maintain current benefit levels with the demographic tidal wave of the retiring baby boom generation.

"For the first two years it will be from our social security account I suspect."

All of the SS "surplus" has already been spent. All that SS holds is a bunch of "IOU's" in the form of Treasury bills. The surplus from SS now is used to understate the budget deficit. All surplus from SS is used to finance current govt. spending. Most of the surpluses from govt. pension plans and other trust funds have been robbed to pay for current govt. spending and compound the understatement of the budget deficit.

"Also, Bush said he vowed to keep his tax cuts permanent. Now, if he was seriously considering that, it wouldn't fit in with tax reform."

More campaign promises for now. Making the tax cuts permanent now or next year will only be reversed later as the budget deficit spirals out of control.

Just my two cents.

Cary
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Bush's Tax Plan

I think they are going to do a massive overhaul so they can disguise taxes going up on everyone. If it is very hard to compare what you were paying to what you are paying, a major tax hike will be less noticable.

There was a similar idea when the first gas crunch occurred in the 70/80s. That would have been perfect time to switch to the metric system. The same people who were angry at $1 a gallon would think, "Wow, gas is only 60 cents a litre! What a bargain!"

But then again, since taxes are currently taken directly out of our paychecks very few people would notice a massive tax increase there anyways. There was a readers digest poll a few years ago where they asked people how much taxes they thought they paid. The vast vast vast majority had no idea.



"Be grateful you don't get as much government as you pay for." - Will Rodgers
 

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