Sales Tax/Income Tax which is more fair?

[veritas]

We don't have a sales tax in Oregon. I think income tax is more fair and better for our economy than sales tax. What say you?

[jainen]

No need

No need to choose--we have both!

[jimmcg]

We have both also. On the Federal level I doubt the Federales will ever give up their income tax in favor of a consumption tax. If we ever see a consumption tax it will be in addition to the income tax.

[geekgirldany]

Have any of you read the Fair Tax book by Neal Bortz? I think that is his name. I have had several customers tell me to read it. One gal says everytime I talk to her "we need a fair tax... just one tax rate". I told her I just couldn't believe that it would work. That the tax rate would have to be so high that low income people would suffer on the necessities such as food, clothing, etc. She said this author writes about how it would not effect the poor but more the rich. Hmm don't know.

[jimmcg]

Fair Tax

Read The Fair Tax Book by Neal Boortz and John Linder. Found it to be more of a historical novel outlining the history of our current tax system as opposed to an explanation as to how to implement and administer a new system. Reasonably priced though........I believe it was in the range of fifteen to twenty dollars.

[taxmandan]

That the tax rate would have to be so high that low income people would suffer on the necessities such as food, clothing, etc. She said this author writes about how it would not effect the poor but more the rich. Hmm don't know.

For the "flat tax" to be revenue neutral, which is to say it doesn't raise more taxes and doesn't reduce tax revenue it would have to be 27% for everyone. That is alot more than the average middle class pays and certainly more than the lower income folks pay. It would be a tax increase for the vast majority of us.

Daniel

[jainen]

Good joke!

Get real. The Fair Tax is a hoax, not a serious proposal to reform taxation. It's a good joke, though! The best you can say of it (and only if you agree politically) is that it reduces government intrusion. It would completely eliminate the Internal Revenue Service and proffer a totally new tax system with no oversight or regulation whatsoever. Collection, if any, would supposedly be done by all the individual, competitive vendors who will merrily raise their prices by a third. Fat chance! Enforcement is left to the state which has no incentive to pull billions of dollars out of its own economy for the benefit of the other states.

Actually, none of that makes any difference at all because no transactions would ever be subject to the Fair Tax. As proposed, business expenditures are exempt so all wage and benefit agreements could be rewritten to include cars and whatever else the employee needs or wants.

Where that doesn't work you will see all sorts of new lease plans, samples, loaners, and all sorts of ways to have beneficial use without title, so you never have to buy. Or, if you prefer, you can get demos, returns, and all sorts of "used" products that are tax exempt. In fact, the whole concept of "new" will disappear under the guise of recycled and reconditioned parts and materials. And of course you can always just buy from an agent in Canada and import whatever you want.

And as if that's not enough, there will be an infinity of club memberships and insurance groups and research programs and all sorts of arrangements to avoid actually acquiring new goods and services. Good joke!

[veritas]

Here are some reasons why an income tax is fairer:

If you loose money in your business there is no tax.

State tax is fully deductible for regular tax.

[Black Bart]

Fair Tax - Flat Tax

It's all the same. What most people regard as a fair tax is one that somebody else pays.

People just "kill" me on this subject. Salesmen and politicians have been pandering to them about it for so long that most firmly believe a flat tax would end their tax problems. They all think it would be a nice, low 5% or so rather than Dan's 27%. I almost wish government would do it for a year and that would shut them up for good.

Some want to abolish income tax and pay a "national sales tax." Again, they're thinking of current "low" sales tax rates. If they paid 27% on every single thing they bought for a year (no -- two weeks), they'd literally be screaming for repeal.

They believe that the "little guy" is pulling the whole load. Actually it is a pretty heavy load for a small "C" (15% fed, 15% SS, 5% state) and most places employing less than five people can't really afford that, but we're talking about "the big picture" here and that's another story, I guess.

Mostly they want to "tax the rich" and they think the "little guy" is paying all the taxes. Cleints amaze me -- some will say "These taxes are just terrible, aren't they?" and I just sit there and nod "Un-huh...yes...yes..it's awful" (it's completely pointless to argue). Then they ask "How much am I getting back (they're EIC -- 100% refund of W/H plus $3/4K courtesy of the taxpayers)?" Some even complain about the "unemployment tax" they "pay in" (employers pay 100% here--in other states too, I assume).

I have a few figures. Caveat: This is from Limbaugh's column, so any leftists among you might want to allow for a possible tilt to starboard (unlike MSM: "Liberal bias? What liberal bias?"). Anyhow, it says "The top 50% of wages earners pay 96% of income taxes" and "The top 1% is paying ten times the federal income tax that the bottom 50% is paying." Make of that what you will, I guess -- statistics can generally be made to jump through hoops.

Still, I'm a "little guy" too and my billfold's on a diet. Even if the high-rollers are paying top-dollar; it's cold comfort.

[veritas]

Some time ago we made a purchase from a local furniture store. We had to go the the warehouse in downtown Portland to pickup our purchase. I noticed while waiting at the warehouse several families with large moving vans, trailers and pickups all loading up with furniture. Just for fun I decided to look at their license plates. Nearly all of them were from our friends up north, Washington state.

Washington just increased their road tax considerably so now we pay less for gasoline than they do and we don't even have self serve. They also passed a law so you can't even smoke in your local watering hole.

Until recently I was told the busiest Costco store in the US is just across the border from our Washington neighbors.

Business is good.

[Black Bart]

Washington sales tax?

I take it you're saying that the sales tax in Washington is quite a bit higher than that in Oregon, since they're coming there to buy merchandise even though they also have to buy high-priced gas to get there (although I assume they fill-up while they're in your state).

Funny thing -- you have no self-serve gas stations. We here have no full-service stations.

Smoking: Our state passed a no-smoking law for all public places (except bars) which will take effect on the 21st of this month. Got to throw out any remaining ash trays, etc. I don't know what some people will do. I have one client who's been smoking in his dairy freeze burger place for 40 years and I know he's not quitting. He lights up anytime and everytime he wants and I can't imagine that he'll go outside his own place to smoke. Probably he will just say the **** with them and let the chips fall where they may.

[Black Bart]

Just noticed

You said in your first post that Oregon doesn't have a sales tax. Gosh; how nice. But, what do y'all do for money?

[Black Bart]

Bike Rally

Doin' any hog-wallerin' for the fourth?

I wish I had my "metric" back.

[veritas]

The wife and I decided to cruise on up the Columbia Gorge. The weather is perfect and the view is dramatic, Part of the old Columbia River Highway (runs along I84) which was built by Sam Hill is still in use and is a fun ride. Unfortunately the road is under some construction so we cut our trip a little short.

Here is some info I think you will find it interesting

http://www.columbiariverhighway.com/columbia_river_highway_history.htm

[veritas]

You said in your first post that Oregon doesn't have a sales tax. Gosh; how nice. But, what do y'all do for money?

Our marginal rate for personal income tax is 9% at 10,000 agi for married. We have a pretty high property tax but it was capped a few years ago so they can only raise our taxable values 3% per year.