Subject: VALUE ADDED TAX IS THE ANSWER TO THE IRS CODE Comment: PLEASE SEE ATTACHED <<...>> Don Waterman 201 Millsap St. #7 VALUE ADDED TAX IS THE ANSWER TO THE IRS CODE. I have traveled the world and I think the value added tax makes is the answer to the problems with our current tax code. It is easier to administer in that companies already collect sales tax on most of their sales. All computer accounting systems can calculate it with absolutely no problems. Here is what I would suggest. Eliminate income tax entirely. Every sale of any product sold in the US would be taxed. What this means, is that if I am selling widgets that when I sell a widget to a company who distributes them, I would collect the tax and add that to the cost of the sale. When the distributor sells the product to a consumer he charges the same tax to them. So in this example we tax the same item twice. The distribution sector of the economy does not normally pay tax. Under this system all products sold to any vendor or user would have this tax applied. A tax audit to see if a company is complying is also easier, as all you would have to do is see what the sales are for a given company and calculate the tax. If they have not paid the tax it will stick out like a sore thumb. This would eliminate the IRS completely and replace them with a computer system that checks sales against tax collected. The impact on the consumer would also be better. The consumer who buys more pays more. Low income consumers spend less money in that they have less to spend. The consumer would have more money in his pocket to spend with out an income tax and economic theory would work in that the more you make the more you spend. I would suggest a flat tax across the board for the value added tax. I would suggest it be collected monthly just as a sales tax is collected. What you end up with is as follows: I make widgets. I buy materials from 5 suppliers to use in the manufacture these widgets. Each of the 5 suppliers pays the value added tax for their sales to us. We sale widget to a wholesale supplier and we pay the value added tax. The supplier may sell to another small manufacture or to another smaller distributor, and they pay the value added tax. The smaller supplier or manufacturer makes his product and sells it to a retail supplier and he pays the value added tax. The retailer sells the product to a consumer and he pays the value added tax. Thus you can see we have collected the tax at each level on the same product until it reaches the consumer. The consumer pays a little bit more but like the federal excise taxes on gasoline, it is not noticed. The economy grows and we collect taxes on items that are imported into the US which now may or may not pay a duty and escape taxation. In other words if you sell it to the US you will pay the tax. Thank you, Don Waterman 201 Millsap Street #7 Bristol, VA 24210 276-466-8840 Bristol, VA 24201 Phone 276-466-8840 afic@bvunet.net |