I have some ideas for politics

The progressive income tax works in theory, but in practice, the tax burden in this country falls mostly on the middle class. The poor pay little to nothing in taxes (as it should be) and the rich hire tax lawyers to exploit loopholes in the system and avoid paying taxes.

While a national sales tax is regressive, there are ways around the regression if you use a value-added tax. You can make several goods and services exempt from taxation, such as necessity of life items that the poor and middle class purchase. You could have refundable credits against any remaining federal or state income tax for consumption taxes paid, or you could allocate VAT money specifically for social services and welfare (which some EUropean countries do with success).

I am in favor of doing away with the income tax below a much higher bracket, I.e. only the wealthiest Americans pay income tax. The VAT would be for the middle class. I think the consumption tax is much less crushing on middle class Americans than an income tax.

While I don’t agree with allowing people to go through a checklist and decide what they want their money to go for, I do agree that certain items should be put to a referendum when it comes to spending our tax money.

good point jimahl. I guess that I am the steve forbes of funadvice. I don’t believe that food (except in restaurants) should be taxed. graduated sounds better. thanks.

There’s a thousand reasons why this wouldnt work, not in the least because there’s about a couple of million places that money goes to, and the ordinary person has no idea what those are… Which is why you vote a person in who is going to spend your money the way you want it to be spent…

“I also believe that a straight 8% sales tax on everything, instead of paying income tax, would ‘help’ the wealthy to pay their fair share of taxes. no loopholes there.”

Amoeba, this is not really true. A family living in poverty spends almost 100% of their income on taxable goods and services, while the average middle class family spends something like 75% of there income on goods and services. The very whealthy spend only like 10% of there income on goods and services. The rest goes to savings and investments. So they would be paying much much less taxes relative to income. The tax burden would remain mostly on the backs of the middle class, and those in poverty who pay almost nothing now, would have to pay even more.

A graduated income tax is the only way to be fair.

I see your point, but the problem with the federal income tax is that it’s gotten incredibly complicated to the point where it’s not really progressive anymore. The tax avoidance business is booming, and the only ones that can afford it are the rich. Collecting taxes from the rich is less efficient than collecting from the middle class, so a lot of potential revenue goes uncollected.

“Those who argue against the ‘injustice’ of progressive income tax really want regressive taxation (because surprise! most of the people who argue for ‘flat’ tax are wealthy themselves and would save $millions this way).”

My arguement is just the opposite, I don’t like the progressive income tax because it already saves the wealthy millions more than it should. While a VAT can easily be made to be progressive through several mechanisms that we’ve both already brought up.

Living in Europe, I’ve seen how the VAT works and it just depends on how you implement it. Denmark and the Scandinavians have the highest VAT in the EU, and yet they have a number of exemptions, including public transportation, health care services, publishing newspapers, and rent, to name a few. A few of them also have “split VAT” where they tax certain goods and services (like necessities) at a much, much lower rate. This makes the system very progressive. Also, many EU countries like Germany impose VAT on imported goods, which I could see the US doing.

And yes, although the poor are not disadvantaged by the income tax, they are definately disadvantaged by other taxes and fees we have. I agree 100% with that.

I wish that were possible but I don’t believe it would work. I believe the best we can do is try to elect individuals who will represent us fairly. I also believe that a straight 8% sales tax on everything, instead of paying income tax, would “help” the wealthy to pay their fair share of taxes. no loopholes there.lol

hmmm…very true lol