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Thread: Sales Tax 20%

  1. #1
    AudreyLeigh
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    Default Sales Tax 20%

    My man mentioned yesterday that some guy (I dont remember who) said that instead of business and sales tax that the gov't should just get rid of business tax and raise sales tax to 20% or something. That way the more you spend the more you pay in taxes.

    Make sense to me.... why dont they do THIS?!?!? Is it because of the rich or something? It seems so damn simple....

  2. #2
    God/dess Deogol's Avatar
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    Default Re: Sales Tax 20%

    That is the so called flat tax. There is a whole thread on this in the past in this forum.

    In short, the rich would pay even less and the poor would have to put even more of their little pot into the government's pockets.

    Example: Luxury tax. Sounded good until the yacht makers and luxury companies went broke when the rich bought in Europe where no such tax exists.

    If we want less taxes, we need less government spending. That is the short and simple of it - but american's are greedy these days and want to vote themselves a check.

  3. #3
    AudreyLeigh
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    Default Re: Sales Tax 20%

    How would the rich pay less? Dont they spend more so theyd pay more? Thats where all this big business/IRS stuff confuses me.

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    Default Re: Sales Tax 20%

    What they pay is a smaller percentage of their income. Sales taxes are what you call regressive taxes, which means that they place a greater burden on the poor than the rich. I mean, think about it, if you have to pay $20 on $100 worth of purchases, to whom does that $20 mean more to? The person with fewer $20s. It hurts someone who makes 20K a year a lot more to spend an extra $20 in taxes than it would hurt someone who made six figures.

    So while if you spend less, yeah, you'll pay less in taxes, but what you do pay is a greater hardship when you're poor. Taxation shouldn't be based on consumption but on earnings.

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    Banned Melonie's Avatar
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    Default Re: Sales Tax 20%

    the major misconception here is that the 'very rich' actually pay the taxes that US law calls for. However, there is an entire industry of quasi-legal tax avoidance which guarantees that the 'very rich' pays a lower percentage of earnings out in taxes than the average dancer does.

    How is this possible ? Well, one easy way is to buy triple tax free municipal bonds which are totally exempt from federal state and local taxes ... but the minimum buy-in for the good ones is $50,000.

    Another easy way is 'private banking' a.k.a. offshore hedge fund investing, where a big bank in NYC transfers funds to a branch of the big bank in a different country, who then invests the money with a hedge fund in a non-signatory country like the Cayman Islands. The hedge fund then buys taxable stocks and bonds anonymously, the profits are deposited in a Cayman Islands bank account, and no report of the profits is automatically made to the IRS which would force the 'anonymous' owner to declare and pay taxes on those profits. Minimum buy-in ... $100,000

    In regard to the 'fair tax', consider this. A full time dancer buys a new Mercedes in America for $50k and has to pay $10k in 'fair tax'. A 'very rich' person takes a vacation in europe, buys a new Mercedes in Germany for the same $50k, drives the new Mercedes 1000 miles while vacationing, then loads the now 'used' Mercedes onto a cargo ship bound for America while they fly home. Tax paid zero. Same holds true for the diamond ring, Rolex watch, designer bag that they also bought while vacationing in europe and brought home as 'used' mrchandise.

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    Default Re: Sales Tax 20%

    ^^^interesting. I might need to know more about these tax avoidance strategies in the near future. Thanks!

  7. #7
    AudreyLeigh
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    Default Re: Sales Tax 20%

    Damn rich ALWAYS have a way around EVERYTHING!

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    God/dess doc-catfish's Avatar
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    Default Re: Sales Tax 20%

    I've said before, its not what you're taxed, its what you have left AFTER your taxed.

    Hypothetically who gets hurt worse, someone making $50K a year and giving up 10% of their income to taxes, or someone making $500K and giving up 30%. Yeah, the second guy gives up a lot more money, but in the end he still has $350K to live on. Last I checked mortgages, car payments, groceries, utilities, etc were priced in actual dollars, not percentages.

    Quote Originally Posted by AudreyLeigh View Post
    Damn rich ALWAYS have a way around EVERYTHING!
    And as long as the rich make the rules, they always will.

    This is why as much as I loathe our current tax system, I tend to scoff at any proposals to "overhaul" or "simplify" it. I wish the people who trumpet such changes would read the fine print on what they are suggesting before they jump on the bandwagon.
    Former SCJ now in rehab.

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    Banned Melonie's Avatar
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    Default Re: Sales Tax 20%

    ^^^interesting. I might need to know more about these tax avoidance strategies in the near future. Thanks!
    Yes it is very telling that John Kerry's tax return which was made public for the 2004 election showed that he paid a de-facto 12% tax rate on $5 million worth of earnings ... whereas as a self-employed dancer you are probably paying at least a 30% tax rate on a five figure income. The reasons that Kerry achieved such a low de-facto tax rate was #1 a significant amount of that 5 million came from interest on triple tax free bonds, and #2 Kerry reduced state income taxes significantly by purchasing an additional house in PA (which has a very low income tax rate) to use as his official tax residence versus the mansion in MA (which has a very high income tax rate). Of course, not everyone can afford to pony up $50,000 at a whack to purchase the best triple tax free bonds, and not everyone can afford to buy and maintain an extra house in a different state (plus travel back and forth enough to establish official tax residence) financed by the savings from differential in state income tax rates.


    This is why as much as I loathe our current tax system, I tend to scoff at any proposals to "overhaul" or "simplify" it. I wish the people who trumpet such changes would read the fine print on what they are suggesting before they jump on the bandwagon.
    agreed that it is bad enough that the 'very rich' have a menu full of tax avoidance strategies under our current tax system ... that average people can't qualify for or can't afford to take advantage of because of high minimum buy-ins. But the 'fair tax' proposal really becomes a joke in terms of tax avoidance by the 'very rich'. All they have to do is purchase their new luxury items outside of the country free of the 'fair tax' levy, and ship them back to the USA as 'used goods'.

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    Veteran Member jessica_rabbit's Avatar
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    Default Re: Sales Tax 20%

    I dunno, I like the idea of the fair tax. I would love to not worry about filing my income taxes. What a pain in the butt. And I really don't buy all that much anyway, besides necessities. So I'd rather be able to save and invest as much money as I can, without worrying about paying taxes on my earnings. It would benefit me tremendously. But I guess I can't speak for those who'd rather go shopping and spend all their money. They prolly wouldn't like this system too much.

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    Banned Melonie's Avatar
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    Default Re: Sales Tax 20%

    ^^^ you may want to consider that the club will have to start charging the 20% 'fair tax' on lap dances ... meaning that the ubiquitous $20 dance will now have to share a $4 cut with the gov't before the club or the dancer can fight over the remaining $16 !

    You may also want to consider that your supposedly 'tax deferred' IRA money will now be taxed at a 20% rate when it comes time to spend it on retirement.

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