I believe in the equality principle when it comes to taxes. I believe in tax neutrality which means our government shouldn’t discriminate against any American. We all have to pay a fair share that is tax neutral. As an example:
Replacing our whole tax system on one based on income earned to one based on income spent (National Sales Tax). If you want lobbyist out of our tax code what quicker way to remove them from it? If you want to stop loop holes what better way is there?
If you are worried about politicians abusing this new tax code, it would be very easy to insure politicians don’t abuse such power in our tax code.
You pick a percent… say 40%. Make a law that says the federal government cannot exceed the national sales tax of 40% in any category. Start the federal tax off at say a flat rate for like products, goods and services.
In this example, I am going to use motor transportation like products and group them together
Motor Transportation: Cars, Trucks, boats, planes, motorcycle, mopeds, Scooters, 4-wheelers, bobsleds, etc… at 8% flat federal national sales tax rate.
For the argument that this will hurt the poor and senior citizens more than anything. Here is your equalizer built into this new tax plan.
(1) No tax on medicine; Period. I would encourage states to follow suit also and not tax medicine. No need to explain here how this would help.
(2) No tax on food you can buy and prepare yourself; farmers market, grocery store = no tax. So a restaurant can buy direct bread from a bakery, meat from a cattle ranch, lettuce from a farm and there is no tax… which should drive their prices down.
(3) New retail products, goods and services taxed only; that means a used car, house, second hand stores are federal tax free. Encourages buying used versus new all the time. Not only lowers prices but is smart environmental sense too.
Now let’s take point (3) and apply it to the 8% federal motor vehicle tax to spending in real life:
I am a person making $20,000 a year. Do I buy a new or used car? It is my choice. But I know if I buy new, I will be paying more on taxes for it, but if I buy used… I will not have to pay a federal sales tax. Same rule applies to a person who earns $100K, $200K, $200,000K!
Guess what, who do you think is more likely to buy a new car and pay federal taxes?
There is your (1) tax increase on the wealthy, yet still (2) helping the poor, (3) applying the equality principle, (4) increasing those who pay into our tax system who are here legally or illegally, (5) getting special interest out of congress, getting everyone on the same page and (6) no one is paying more than anyone else (unless they want to) and so much more.
Keep in mind...
No rate could exceed 40% (as an example). I would also include the safeguard law, after the starting rate is established, it cannot exceed an increase more than ½ percent a year .
So, if a motor vehicle tax started at 8% it could possibly be increased the next year at a max of 8.50%. So in this category it could reach 40% in 16 years!
This is just a quick snap shot that puts people in power of paying or not paying more for something for federal tax purposes.