GOP propose 30% national sales tax

[Portre]

As part of his deal to become House speaker, Kevin McCarthy reportedly promised his party’s conservative hardliners a vote on legislation that would scrap the entire American tax code and replace it with a jumbo-sized national sales tax.

 

[Portre]

What else did McCarthy promise for his soul?

[HSlim]

1 hour ago, Portre said:

What else did McCarthy promise for his soul?

Not a damn thing he can actually deliver considering the slim majority in the House and being the minority in the senate. 

[Tatetopa]

Does that 30% apply to yachts, private jets, golden toilets, and diamond bling, or just to hamburger, oatmeal, eggs, and school supplies?  A quick look will tell you who Republicans serve.

[Myles]

29 minutes ago, Tatetopa said:

Does that 30% apply to yachts, private jets, golden toilets, and diamond bling, or just to hamburger, oatmeal, eggs, and school supplies?  A quick look will tell you who Republicans serve.

Hopefully everything.   I always thought that upping the national sales tax rate could allow the income tax to go away.   Granted allot of research would need to be put into it to make it work.    Since a rich person buys a more expensive car than a poorer person, it would have the wealthy paying more taxes.  I am on board.  

[Michelle]

The luxury tax could be more.

A luxury tax is one that’s levied on certain purchases that cost more than a specific amount and aren’t considered to be necessities to daily living. As the name suggests, they're "luxury" items. You may never have to pay this tax because you always have the option of not making a purchase or buying an item that's subject to it. 

https://www.thebalancemoney.com/what-is-a-luxury-tax-5208103#:~:text=Congress enacted a 10% federal,sold for %2430%2C000 or more

 

[Doug1066]

1 hour ago, Tatetopa said:

Does that 30% apply to yachts, private jets, golden toilets, and diamond bling, or just to hamburger, oatmeal, eggs, and school supplies?  A quick look will tell you who Republicans serve.

Don't forget to include stocks, bonds and other financial instruments on your list.  And real estate.

Doug

Edited January 20, 2023 by Doug1066

[Gromdor]

It would suck for the old people on social security but be great for a rich person.  Gas costs the same whether you are a broke retiree, high school graduate, or a billionaire.  Same with milk, eggs, and bread.

"Human-ing" costs about $40,860 a year for a person living in the US.  Average Monthly Expenses: From a Single Person to a Family of 5 - NerdWallet

Increase that by 30% and it comes out to $53,118.00/yr.   So if you make less than that you aren't saving any money.  Make more than that and you can save/invest whatever the difference is. 

(A family of four is $92,988.00/yr before the 30% tax or $120,884.00 after.) 

The upside is you get to keep whatever it is you pay in income tax, but it's easier to just figure your wage using that number.

Edited January 20, 2023 by Gromdor

[Gromdor]

8 minutes ago, Doug1066 said:

Don't forget to include stocks, bonds and other financial instruments on your list.  And real estate.

Doug

I am certain they will never put a sales tax on investments- especially one that is greater than the return.

[Doug1066]

14 minutes ago, Gromdor said:

I am certain they will never put a sales tax on investments- especially one that is greater than the return.

You are most-likely right.

But if we have a sales tax, then we need to include everything that can be sold; otherwise, it is grossly unfair to those with lower incomes.  That would also include all buildings, manufacturing plants and equipment - virtually everything.

Such a tax would cause major changes in the economy.  Returns on oil wells in Oklahoma are about 3%.  That's low enough that investors are moving elsewhere with their money.  If this tax went through, Oklahoma's oil industry would promptly die.  I'm not sure that even the Bakken or Permian Basin could pay that well.  Imagine gasoline over $100 per gallon.

Somebody in Congress hasn't thought this thing through.

Doug

[Tatetopa]

1 hour ago, Myles said:

Hopefully everything.   I always thought that upping the national sales tax rate could allow the income tax to go away.   Granted allot of research would need to be put into it to make it work.    Since a rich person buys a more expensive car than a poorer person, it would have the wealthy paying more taxes.  I am on board.  

How much toilet paper does a wealthy person buy compared to a middle class person?  

[Gromdor]

7 minutes ago, Doug1066 said:

You are most-likely right.

But if we have a sales tax, then we need to include everything that can be sold; otherwise, it is grossly unfair to those with lower incomes.  That would also include all buildings, manufacturing plants and equipment - virtually everything.

Such a tax would cause major changes in the economy.  Returns on oil wells in Oklahoma are about 3%.  That's low enough that investors are moving elsewhere with their money.  If this tax went through, Oklahoma's oil industry would promptly die.  I'm not sure that even the Bakken or Permian Basin could pay that well.  Imagine gasoline over $100 per gallon.

Somebody in Congress hasn't thought this thing through.

Doug

My company pays sales tax on material for most construction jobs.  This would be compounded in the costs just like what inflation is doing now.  We are exempt from this tax of some public jobs (schools for instance).   Here in Iowa we also pay a sales tax on labor if it is not new construction.  

So I get where you are coming from.

As for thinking this through.....  I think you are right.  But when has "thinking" ever stopped a politician?

[Gromdor]

Here's the bill: Text - H.R.25 - 116th Congress (2019-2020): FairTax Act of 2019 | Congress.gov | Library of Congress

It's a bit boring, but should answer some of the issues brought up here.

Edit to add: “(2) INVESTMENT PURPOSE.—No tax shall be imposed under section 101 on any taxable property or service purchased for an investment purpose and held exclusively for an investment purpose.

Edited January 20, 2023 by Gromdor

[Tatetopa]

Here is a thought question.  Keeping in mind that the deficit went up about 8 trillion dollars under Trump, some of that for tax breaks for the elites, what are the chances that the Republicans will really curb spending and hand Biden a balanced budget and raise his chances for     re-election?

[Gromdor]

2 minutes ago, Tatetopa said:

Here is a thought question.  Keeping in mind that the deficit went up about 8 trillion dollars under Trump, some of that for tax breaks for the elites, what are the chances that the Republicans will really curb spending and hand Biden a balanced budget and raise his chances for     re-election?

0%.  Congress is split.  Nothing meaningful will get passed during this term.  The only way something good will happen is if one party has the majority and they get all the credit.

[Grim Reaper 6]

[Grim Reaper 6]

32 minutes ago, Tatetopa said:

How much toilet paper does a wealthy person buy compared to a middle class person?  

Well monthly, about 100 rolls more than a Middle Class Citizen because the wealthy are full of crap!!!

[Gromdor]

This bill has a 0% chance of becoming law.  McCarthy is only bringing it up to honor his deal to with the right wing side of the house to placate them.  No one who is a voter is even going to remember this by the next election for it to matter.

Edited January 20, 2023 by Gromdor

[Sir Wearer of Hats]

Well, mathematically, out of every dollar you earn how much does the tax man help himself to? I pay roughly 30c in ever $1 in tax. A GST (goods and services tax) of anything less than that is a windfall for me (assuming you don’t do what they did here, and have a GST AND tax you). 

[Grim Reaper 6]

1 hour ago, Sir Wearer of Hats said:

Well, mathematically, out of every dollar you earn how much does the tax man help himself to? I pay roughly 30c in ever $1 in tax. A GST (goods and services tax) of anything less than that is a windfall for me (assuming you don’t do what they did here, and have a GST AND tax you). 

It depends on up what type of tax we are talking about, before I sold my pool hall in Washington, State the business tax was actually 30%. So, it works out to your description above, perfectly!!

[Gromdor]

2 hours ago, Sir Wearer of Hats said:

Well, mathematically, out of every dollar you earn how much does the tax man help himself to? I pay roughly 30c in ever $1 in tax. A GST (goods and services tax) of anything less than that is a windfall for me (assuming you don’t do what they did here, and have a GST AND tax you). 

Forty two percent of Americans pay no Federal income tax- usually those too poor (retirees on Social Security) or those very rich (Trump for example).  The Federal Income tax is what this bill is supposed to replace.

[Sir Wearer of Hats]

19 minutes ago, Gromdor said:

Forty two percent of Americans pay no Federal income tax- usually those too poor (retirees on Social Security) or those very rich (Trump for example).  The Federal Income tax is what this bill is supposed to replace.

Right, we’ll in that case - no, it’s potentially quite damaging.

[Tatetopa]

5 hours ago, Sir Wearer of Hats said:

Well, mathematically, out of every dollar you earn how much does the tax man help himself to? I pay roughly 30c in ever $1 in tax. A GST (goods and services tax) of anything less than that is a windfall for me (assuming you don’t do what they did here, and have a GST AND tax you). 

Is 30%b your total including municipal,  state, federal, Medicare, and social security  equivalents?

[Sir Wearer of Hats]

33 minutes ago, Tatetopa said:

Is 30%b your total including municipal,  state, federal, Medicare, and social security  equivalents?

I believe so. 

[Myles]

13 hours ago, Tatetopa said:

How much toilet paper does a wealthy person buy compared to a middle class person?  

Nearly the same, except they buy the expensive kind.   So the wealthy will be paying more taxes on toilet paper than the middle class.