Income Tool Time

Uhhh… How to you figure that repeal of the 16th Amendment would "get rid" of the federal income tax? Maybe you had better go back and READ it! The federal income tax was ALWAYS legal, even before the 16th Amendment. All that the 16th Amendment did was remove the apportionment requirement. Be careful what you wish for! While apportionment was impossible in the 19th century, it would be child’s play in the modern computer age. The federal government would assess income tax based upon state population and it would be up to the 50 states and DC to figure out how to pass on the burden to their residents. There would be 51 versions of Form 1040 (at least, don’t forget territories) and confusion would reign supreme.

How would you track spending in real time to know when the $15k limit was hit? That would require an investment in computing power that would run into hundreds of billions of dollars and take years to implement. Forget the "Big Brother" aspect of the government tracking every purchase in real time!

The rate would have to be 30% to raise as much revenue as the current income tax. While exempting the fist $15k might help the poor, the middle class would be crucified by an overnight 30% increase in the cost of everything. The auto and construction industries would be decimated. Can you afford a $6,000 tax on a $20,000 car or a $60,000 tax on a $200,000 home? I make over $80k a year and I damned sure can’t! The wealthy would get a MASSIVE tax break since they amass wealth, not spend all of it. Frugal wealthy folks (which covers most of them, actually) like Warren Buffett would pay nearly nothing in tax compared to their incomes.

The first rule of taxation is: Make sure that the taxpayer can AFFORD to pay the tax. The ONLY tax that uniformly adheres to that rule is a graduated income tax. Every other tax is a massive break for the wealthy at the expense of the poor and middle class. The tax policies of the last decade have already decimated the middle class, whose incomes have flat-lined and net worth has shrank while the wealthy have seen their income nearly triple and their net worth nearly double.

A huge national sales tax would effectively destroy the middle class. And when the middle class collapses, the wealthy won’t be far behind since there won’t be anyone left to pay the taxes or buy goods and services that keep the wealthy wealthy.
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", in my humble opinion, could generate enough revenue to eliminate the income tax," – It would also devastate the poor working man and be a HUGE boon for the rich.

"Since the biggest issue against it seems to be its bias against the poor, we could have a single exemption for all on the first 15k spent" – How exactly do you propose you would track that? You’d probably need an organization BIGGER than the IRS.

"It could be implemented just like current state sales taxes and be very low. Probably less than 5 percent if it was all inclusive" – less than 5% wouldn’t make enough money, especially if you used your 15K exemption. The 15K exemption (if you could track it) would just put the poorest earners back to paying no tax (which is already the case) and the rich would pay less. So you would have LESS revenue overall.

"The wealthy would pay more because they spend more" – Actually, the wealthy are generally the wealthy b/c they spend proportionately LESS.

"especially if you include the tax on investments" – The market would be destroyed, as the richest folks, the ones actually investing, would STOP investing to save the tax, since the rate of return on the investments would have to guarantee above the sales tax to be profitable. If the sales tax was 4% (unrealistically low), then in order to make investing successful, one would have to make at least 5% on eveyr investment. That is very difficult to do.
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Uh, and how do you propose tracking when the $15K exemption has been spent and tax kicks in?

Would severely hurt areas like housing and auto industries, and the stock market.
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mostly because Congress won’t do it
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Income tax was established because the overall tax burden in this country was falling on the part of the population that was least able to pay it. If you think the poor should pay more tax and the rich less, they repealing the 16th amendment would be a good idea. I don’t.
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5% wouldn’t come close to raising enough revenue. The so called Fair Tax, a national sales tax that has been proposed each session of Congress since at least 2003, is judged to be revenue neutral at 23%.

The Fair Tax has been modified several times to remove some obvious loopholes. The less obvious loopholes will no doubt be identified by tax lawyers and accountants if the tax is ever enacted. And of course if it is enacted it will be stuffed so full of social engineering schemes that its parents wouldn’t be able to recognize it. No good idea ever survives the political process.
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This who theory is bananas. It would most likely be a 15 percent rate. That said the poor will suffer the most. The rich are currently paying around 30% so they will get their taxes cut in half (at 15%). The poor who take the standard deductions are currently paying around 0-5% will have their taxes tripled. Who wins: RICH Who loses: POOR

Then people get on the poor who don’t pay their fair share. Look at those people. They are the hard working single income familys making $25K a year. Just getting by paying the rent and car payments. Now you’re saying they aren’t paying their fair share.
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