| sethnintendo said: Actually, I am starting to like the idea of FairTax bill (having a 23% national sales tax and eliminating the IRS, income tax, corporate tax (most barely pay taxes anyways or find loopholes), etc.. Prices would go up at first but should come down quickly (to about where they were at in first place). Plus, most basic needs would be refunded (I'd rather not tax non prepared food at all). However, they would just send a refund each month based on size of family for basic needs. |
Wonderful idea - that way, the rich can go and ship all their goods in from other countries at minimal cost, and pay no tax, while poor families pay even more tax.
The real solution is simple: eliminate income tax and sales tax, and have *only* a corporate tax. However, the corporate tax would apply to any money gained *from* America, with reduced tax on money paid *to* Americans. That is, if a company offshores the jobs, it actually increases their tax burden. And shifting profits out of the country would do nothing, as the source of the profit would be what is taxed.
Not only that, but companies would see no tax on money made outside of America, giving companies more incentive to base themselves in America, thus increasing the number of American jobs further. And this would likely force other countries to adopt a similar system, in order to prevent companies from offshoring *to* America.
Meanwhile, companies would be able to choose how to distribute the costs of the tax. They could reduce employee pay (equivalent to an income tax), but this would be relatively ineffective in terms of tax reduction, since it would also increase the tax burden. They could alternatively raise prices, but the market economy will restrict that, as people won't pay dramatically inflated prices for things. However, with such a relatively simple tax system, it would be easier to do the accounting, and thus they wouldn't need tax accountants to manipulate things, giving them savings in that way.
It's not like it's "unfairly taxing businesses", since the tax would be taken out anyway in the form of tax on wages (income tax) or tax on products (sales tax).
The exact corporate tax rate would have to be determined, of course. Also note that further encouragement of balanced pay can be achieved by adjusting the corporate tax rate based on the level of imbalance in employee pay (if most employees get only $20,000 a year, while upper management gets millions, then the tax rate would be higher than if employees get $50,000 a year and upper management gets $250,000 a year, because there's more net imbalance in the former case). Meanwhile, employees who get a $50,000 a year income would be confident that this is precisely the amount of money they would have from their wages at the end, and the sales tax system wouldn't be an issue for anyone.
EDIT: In theory, neither side of politics should have a problem with such a modification. To the left, this is an opportunity to tax companies and then use that tax for the people, which is the preferred approach for the left. To the right, this is a way to drive the economy and bring jobs to America, and puts the control of the tax situation into the market, with companies making the decisions. That is, it's a free market approach to tax that the left can support, and it's a "tax increase" that the right can back.
