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I saw a congressman on Fox News a couple of weeks ago that had a brilliant tax plan for the US. Here is the summary....
Hidden in the things you buy is about 22% make that companies/stores charge you to cover all the stupid fucking taxes and fees they have to pay to do business. This guys plan is based on that fact. From there he would...
a) Eliminate those fees and taxes charged to businesses to sell you those items (and by items I mean everything from a can of soup to a car to a house - the average is about 22%). By elminating those fees, we the consumer could in theory pay 22% less for everything that we buy.
b) The federal government would then charge a 23% tax on everything we buy. The net change for the individual buyers would be a 1% increase in the Cost of Living.
c) Here is the best part.... Eliminate the IRS. All federal taxes would be collected at the point of sale by the states and forwarded to the Feds. There would be no more Federal tax returns and no more exemptions and no more deductions. Nobody would be able to cheat on their taxes or not file a return because when they buy anything they are paying their income tax. The best part is all the foreigners that visit the US would pay it too.
d) Because familes who make less than than about $40,000 don't pay any federal taxes, they guy said you would determine the poverty level and how much it costs them to live each month (he estimated about $600) a month and then you issue a check for $600 to each family (kinda link Canada's family allowance). So whether you make $20k a year or $200k you get the the $600. There for, those poor people that currently don't pay any taxes still would not as the money paid to them by the government would cause them to break even.
Basically, we would see a 1% cost of living adjustment due to the taxes but the 10-25% people pay to the Feds in federal taxes would be theres to keep so everybody would enjoy about a 9-24% increase in their net incomes.
This guy said for every $1000 the IRS is forced to collect, it costs them somewhere between $5000-10,000 to collect it so most times they do not go after it and people get away with not paying taxes all over the place. Based on this fact, with the above mentioned National Sales Tax there would be no way to avoid paying taxes and the Feds would see a massive increase in the amount of money they saw from taxes.
Not sure if I have all the numbers right, but the concept is there. Sounded good to me.
Flow
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