Subject: National Sales Tax Comment: Although details would need to be worked out by experts, I think that a National Sales Tax should completely replace the Federal Income Tax. A rate of 25-30% has been often mentioned, of course, TBD by experts. To keep it from hurting the poor and low income, I would propose: No tax on the first $50,000 to $100,000 of the final purchase price of a primary residence home for everyone, giving a home ownership break for the low income. No tax break for a second home. No tax on the first, say, $10,000 of final purchase price of a new vehicle, and the first $5,000 of a used vehicle for everyone. If anyone wants a more expensive vehicle, they pay tax on the rest. No tax on the first $500 to $1,000 of a boat. No tax on unprepared food grocery items and typical household cleaning and upkeep items purchased in a grocery store, for everyone. No tax on prescriptions, over the counter medicines, or other supplements and heath related items. No tax on other categories of purchases deemed essential for basic needs buy everyone. Tax all other items that are not basic necessities for living, from $0 on up. This is my basic idea for protecting the poor and lower income folks, without having a burden of proof of income levels from individuals, and without the government having to be burdened with refunds or rebates, and figuring out who gets them and how much. This type of system would also encourage saving, because if one saves they don't pay tax until they spend, whether it is they or their heirs. Keep a smaller IRS to police the businesses to make sure that the sales taxes come in on a regular schedule with severe penalties for failure to do so. I don't like a value added tax, because it makes it difficult to exempt the poor and lower income from taxes layered in on the processing and manufacturing. It makes it more difficult to collect and keep track of all of the layers of processing or manufacturing value added taxes. Using a value added tax would then make it necessary to give refunds with to many forms and burdens of proof. With a National Sales Tax their would be, for the individual, no filing of forms, no complications, and no deadlines. One more important reason for the National Sales Tax is that it would tax the income from the under ground economy, here to fore mostly unreported and untaxed. All of the unreported tips, under the table cash payments, even money taken in by pimps, prostitutes, illegal drug sales, bribes, kickbacks, etc., etc., would be taxed when these people use their money to buy a better live style. That's a great deal of money that usually doesn't get reported or taxed. I have heard a lot of people smarter than I am say that they think that this a the best way to go. Sincerely, Carrold M. Newton Jr 11200 Yorktown Lane Fredericksburg, VA 22407-2546 |