National Sales Tax to Replace Income Tax

[OzzyKP]

Bush Remark Touches Off New Debate on Income Tax

By EDMUND L. ANDREWS, The New York Times

WASHINGTON (Aug. 11) - A debate is flaring anew over the idea, most recently addressed by President Bush at a campaign stop in Florida this week, that the United States ought to consider replacing income taxes with some sort of national sales tax.

"It's kind of an interesting idea that we ought to explore seriously," Mr. Bush said in response to a question during an "Ask President Bush" session in Niceville, Fla.

Though the president's remarks were informal, he made them at a time when some of his advisers, though by no means all, are urging that his speech at the Republican National Convention include a proposal for a vast overhaul of the federal tax system.

Mr. Bush's comments were followed Wednesday by a conference call with reporters, arranged by the Bush-Cheney campaign, in which the chairman of the tax-writing House Ways and Means Committee, Representative Bill Thomas, Republican of California, said that he favored looking at "well-thought-out alternate tax structures" and that the committee planned to do so.

"We have one of the more regressive tax structures in the world today that basically is a 19th-century concept," Mr. Thomas said, adding, "We should get that revenue from people in the least destructive way possible."

Senator John Kerry, the Democratic presidential nominee, responded to the president's remarks by immediately accusing him of contemplating a step that would add to tax burdens on the middle class.

"The last thing we need is a national sales tax that would impose a whole new tax on this country," Mr. Kerry said. "Were the Bush proposal to be adopted, many Americans would be paying more than 20 percent in national sales taxes on top of state and local sales taxes."

Nor was Mr. Kerry the only opponent. At least one Bush adviser said there was a schism over the idea within the president's camp.

A concept that has surfaced from time to time, a national sales tax, or value-added tax similar to those in most European countries, would be a radical departure in the tax code. Its opponents argue that it would punish the poor and the middle class, who typically spend a larger share of their income than the wealthy on consumption. Proponents argue that it would be simpler and fairer than the traditional income tax, because it would not provide the opportunities for loopholes and sophisticated tax-reduction schemes that tend to favor wealthy taxpayers.

At his appearance on Tuesday, Mr. Bush stopped well short of proposing anything specific. But White House officials were careful not to rule out the idea, noting that he had long been in favor of fundamental tax changes.

"The president has always believed in lower taxes and a simpler, fairer tax code," the White House press secretary, Scott McClellan, said Wednesday. But Mr. McClellan added, "There's nothing more to announce at this time."

At another point on Wednesday, when a second White House spokesman, Trent Duffy, was asked whether Mr. Bush was contemplating a dramatic new tax proposal at the convention, he replied, "Stay tuned."

R. Glenn Hubbard, a former chairman of Mr. Bush's Council of Economic Advisers and now an adviser to the Bush-Cheney campaign, has long been a vocal supporter of fundamental change that would tax consumption rather than income from savings and investment.

"I don't think he meant a national sales tax per se," Mr. Hubbard said Wednesday. "I think what he means is a tax reform that might disadvantage savings and investment less."


08-12-04 12:58 EDT

Copyright © 2004 The New York Times Company.

Interesting idea. Lets see if he has the balls to actually make an issue out of it.

[Caligastia]

[OzzyKP]

Though a question, would there be exemptions to individuals below a certain income level? Or on certain products (like food)?

Cause right now I don't pay income taxes cause I'm too damn poor, and while a national sales tax is a neat idea (at least at first) I'm wondering about myself. Would I switch from paying no taxes to having to pay 20% on everything I buy?

If you can give the poor some exemption card, then I think its a good idea.

[Kontiki]

Hang on - is this meant to actually replace income tax or just help to reduce it? I think it's kind of assinine either way, but if it's the former, you'd need one hell of a sales tax to recoup the lost revenue.

[Az]

Regressive taxation.

Bush 04', preparing the nation for the 12th century.

[mrmitchell]

No.

[Dauphin]

Bad idea.

Its also a way of raising quick funds as income and expenditure get taxed twice on the overlap.

[Harry Tuttle]

It'll never happen, so says me, the accountant.

[SpencerH]

January 20, 2001
Title: Bushwhacking taxes
Author: Alan Keyes

President Bush has repeatedly emphasized his resolve to enact the principal features of his tax plan quite early in the new administration. Government is an inherently blunt instrument, and the Bush administration may prove blunter than most.
So perhaps it is a good time to remember that we are often obliged to be satisfied if we can merely help steer federal policy more or less in the right direction -- for a decent approximation of the right reasons -- with results that are, for the most part, advantageous. The genial Bush doggedness on taxes seems likely to meet these fairly humble standards and is, accordingly, a welcome sign.

It is not, however, a sign that we can expect any progress toward fundamental tax reform.

No improvement of the income tax can take the place of the only agenda that will truly restore our freedom. Ultimately, we must abolish the income tax and replace it with the tax system that was intended by our founders when this nation began -- a tax system that leaves our people in control of 100 percent of their dollars and that gives to the earner the first use of every dollar that he or she earns. The income tax is a slave tax -- inherently incompatible with freedom. Abolishing it is therefore not just economically feasible, it is morally imperative if we are to meet our obligation to bequeath liberty to future generations.

The income tax should be replaced with the kind of taxes most people are already paying -- the taxes on things we buy and that we pay only when we decide to buy them.

This is what the founders intended to be our economic situation: ordinary citizens in the driver's seat of the economic patterns of their own lives.

Liberty from the income tax would mean, of course, liberty from the Internal Revenue Service. We would no longer have the IRS, because we would no longer have a tax code excusing the government demand that we report our income to its agents. Nor would federal law continue to permit the seizure of our homes and our goods and the destruction of our families' livelihoods in order to improve bureaucratic performance records.

We would no longer have our privacy invaded by a government that was interested -- officially and legally -- in burrowing about in our business to find out how much we make, where we make it and when we got it.

The income tax is a kind of universal solvent, dissolving the private and personal resolve each of us should have to control responsibly the actions we take in the acquisition and expenditure of wealth. Ultimately, the conservative movement must lead the American people to the abolition of the slave income tax, and for the right reasons. The question of fundamental tax reform is a test of the statesmanship of our politicians and of the quality of citizenship of our people.

But it is just as clearly a test that our national leadership is not going to attempt to pass in the next few months. Rather, we are being asked to support President Bush's plan for across the board reductions in marginal income tax rates. If we grant that, for the moment, there is no prospect of eliminating the income tax, substantial reductions in the marginal tax rate are the next best proposal, and deserve our support.

Reductions in the tax rate -- ideally including reduction of the capital gains tax rate -- are the heart of the Reaganomic, supply-side, tax policy which the Bush team is unwilling to call by those names. The Reagan tax cuts led directly to the decades of prosperity that the Reagan presidency began.

Low tax rates are a fundamental prerequisite to sustaining the natural inclination of free people to invest their time and treasure in risky and time-consuming attempts at the creation of wealth which they eventually offer to their fellow citizens in the market place. Confidence that such wealth creating activity will not be suppressed, and that the flow of new goods and services will continue to increase, is also the real key to avoiding or ending inflation.

It is particularly crucial that the marginal rates on large incomes and capital gains not be excessive. Confiscation of the wealth of the successful wealth creators -- entrepreneurs -- systematically directs the capital necessary for the next round of wealth creation away from the hands of those who have proven they know how to use it in creating the wealth that provides jobs, goods and services for us all.

Wealth creators are not our most important heroes but they are, in general, admirable and important people who reap only a small portion of the benefit of their effort. The rest is distributed -- in the form of jobs, goods and services -- to those who have the good fortune to live and work with the wealth creators of our free society.

Liberals ignorantly or demagogically defend high tax rates on the economically successful as an issue of tax fairness. The hidden premise of such a position is that wealth is not created by human beings but magically appears as a big pile to be distributed. The appropriate response -- and the true defense of lower tax rates for everybody -- is to point out that wealth is created by real men and women who do so, at least in part, in the expectation that they will not have their just portion of the fruit of their labors stolen from them. It should be a principal goal of our tax policy to encourage their crucial activity -- for the good of all. One of the simplest ways to do this is just to stay out of their way by not taxing them into submission to the liberal vision of sterile but equal inactivity.

For these reasons, principled tax conservatives should help President Bush move the tax system a bit more out of the way of the wealth creators. We should do so despite what might be a reasonable fear that improving the current system will delay its replacement with a tax system truly compatible with liberty. There are, indeed, times in political life when partial victories are the greatest defeats, but we can be reasonably confident that this is not one of them.

Certain kinds of compromise -- those, in particular, which are intended to facilitate the ultimate abandonment of principle -- are so dangerous as to justify opposition even to proposals that accomplish much of our real agenda. A tax reform proposal, for example, that greatly lowered our national tax burden, but newly established the principle that the government has first claim on our money would be a devil's bargain indeed.

Similarly, we should be wary of the path of partial victory at moments when there is real prospect of accomplishing our most important goals in their entirety. Suppose, for example, that an incident of poignancy on the national stage -- a famous pro-abortion crusader undergoing a change of heart in some dramatic circumstance, for example -- creates a moment of national attention and openness to the pro-life argument. At such a moment, the pursuit of a ban on partial-birth abortion alone would be surrender. Instead, such moments of possibility must be seized and put to the highest possible purpose.

There are times, then, when we must concentrate all our energy on the ultimate prize. And surely it is always true that our preeminent goal must be the eventual vindication of the original promise of American liberty.

But our national politics -- unfortunately -- present us with no such great opportunity on the issue of taxation, over the next few months, for the simple reason that there are no champions of fundamental tax reform on the national stage. In such a context, we should lend a hand in accomplishing the very real, if very partial, victory for liberty that the Bush plan represents.

Enactment of a general reduction in marginal rates will be a marginal victory indeed. But it will mean more liberty, more justice, and more prosperity for the American people. It will be, whatever euphemisms are attached to it, a partial reaffirmation of the Reagan economic spirit of encouraging the things that will bring abundance to our neighbors and of realizing that the abundance of my neighbor does not come at my expense. And, it will be a defeat, for now and in some measure, of the servile, jealous, and contemptible ambition of the liberal nanny state.

On the day that he signs the Bush tax plan into law, I would, for the moment, be content if President Bush says that cutting rates is good for all Americans and it is the people's money anyway. Not perfect, but something.

Former Reagan administration official Alan Keyes, was U.S. Ambassador to the United Nations Social and Economic Council and 2000 Republican presidential candidate.

An argument from my candidate for president

[Imran Siddiqui]

Alan Keyes is your 'candidate for President'? I'm a Republican, but you are loony tunes!

[Sprayber]

A federal Sales Tax.. A big muther ****ing

[Dauphin]

No improvement of the income tax can take the place of the only agenda that will truly restore our freedom. Ultimately, we must abolish the income tax and replace it with the tax system that was intended by our founders when this nation began -- a tax system that leaves our people in control of 100 percent of their dollars and that gives to the earner the first use of every dollar that he or she earns. The income tax is a slave tax -- inherently incompatible with freedom. Abolishing it is therefore not just economically feasible, it is morally imperative if we are to meet our obligation to bequeath liberty to future generations.

I don't really see how increasing bottom line income increases freedom when your bottom line expenses increase by as much, when average out over the population. Sales taxes will be expected to raise just as much money as income taxes so all you are doing is shifting who pays for it.

Now, the people who win in the new situation are those who are net savers, that is they win as long as they don't spend all their income. So they have increased freedom to earn and possess money, but have much less freedom to spend it.

[SpencerH]

Originally posted by Imran Siddiqui
Alan Keyes is your 'candidate for President'? I'm a Republican, but you are loony tunes!

Well, its not likely he'll ever be elected to that office, and I refuse to support politicians with the IQ, morality, and integrity of an alley cat.

[Az]

Well, its not likely he'll ever be elected to that office, and I refuse to support politicians with the IQ, morality, and integrity of an alley cat.

You hate Bush, you terrorist!

[Fake Boris]

So ludicrous it desserves a