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Bipartisan Panel Calls for Overhaul of Tax Code: WSJ

A panel of Democrats, Republicans, economists and other experts is set to say Wednesday that a complete overhaul of the US tax code is the best way to address the nation's fiscal problems -- a new and likely controversial idea aimed at tackling the growing deficit.

(snip)

The most recent report, put together by a group called the Bipartisan Policy Center, will call for a one-year payroll tax holiday in 2011 that it says will create between 2.5 million and seven million jobs.

The plan would lower income and corporate tax rates and offset them with a 6.5 percent national sales or "consumption" tax as well as an excise tax on sugar drinks like soda.
http://www.foxbusiness.com/markets/2010/11/17/bipartisan-panel-calls-overhaul-tax-code-wsj/

Well this a real O - M - G moment. It's hard to believe. They actually want to LOWER corporate income tax and offset that with a NATIONAL SALES TAX of 6.5%, which will be on top of our state sales taxes.

It's like they're purposely trying to shift the tax burden from the rich to the lower classes, just unbelievable. A national sales tax is REGRESSIVE, it will lower consumption and destroy jobs not create jobs! And it hurts the jobless and poor the most, they're the ones who can least afford another 6.5% shaved off the top.

The one year payroll tax holiday is an interesting idea, but folks who pay taxes are able to do so precisely because they aren't hurting right now. And a one year holiday is TEMPORARY, whereas a national sales tax will be FOREVER. That's another 6.5% of your money the government will get for the rest of your life. Actually worse than that, since sales tax creeps up over time.

Where's our universal healthcare?

The unitied bannana republic.

Might as well add Mexico to the union.

Here is a comparison to the Bowles.Simpson plan

Oh, I forgot to mention the special excise tax on soda and sweetened drinks. I guess that's in there just so there's no doubt who this is aimed at -- working stiffs. They could have picked anything for a special excise like, oh I don't know, maybe caviar or fine wine and spirits.

I don't drink soda anyway, but I wonder if the excise will apply to raw sugar (I like my iced tea).

Also don't forget folks that INFLATION is coming, that's already a stealth regressive consumption tax. This is just madness to add a sales tax in a period of high inflation.

Sixstrings wrote:Well this a real O - M - G moment. It's hard to believe. They actually want to LOWER corporate income tax.

You got your OMG the wrong way around. I thought you wanted that manufacturing is coming back to the US. US has a ridiculous high corporate tax rate. It's about time they lower it. And they should pay by eliminating food stamps.

I like consumption taxes. First, they are voluntary. Second, they discourage over consumption, one of the two fundamental problems with mankind (The other overpopulation).

This proposal is rather regressive. I would prefer something more along the lines of the "Fair Tax." It provides a prebate of everyone's sales tax to cover up to the poverty rate. This has the effect of completely untaxing the poor, unlike today where the poor pay many hidden taxes.

My favorite part of the fair tax is it does not tax used goods.

http://www.fairtax.org/site/PageServer?pagename=about_main

dsula wrote:

Sixstrings wrote:Well this a real O - M - G moment. It's hard to believe. They actually want to LOWER corporate income tax.

You got your OMG the wrong way around. I thought you wanted that manufacturing is coming back to the US. US has a ridiculous high corporate tax rate. It's about time they lower it. And they should pay by eliminating food stamps.

Please tell me that was a joke.

careinke wrote:I like consumption taxes. First, they are voluntary. Second, they discourage over consumption, one of the two fundamental problems with mankind (The other overpopulation).

It's regressive. As people consume less, the tax would have to be raised to net the same revenue. The tax burden should fall on folks who have more money than they have time to consume, not on the classes who already spend every last cent.

I know you all think high taxes on the rich is communist and radical and all that, but the top bracket was 91% in 1963. There was no national sales tax. The rich paid a lot of taxes and didn't have enough to left over to fuel commodity or housing bubbles.

dsula wrote:You got your OMG the wrong way around. I thought you wanted that manufacturing is coming back to the US. US has a ridiculous high corporate tax rate. It's about time they lower it. And they should pay by eliminating food stamps.

Ridiculously high rate? With loopholes and money laundering schemes with colorful names like the "Double Irish" and "Dutch Sandwich," very profitable companies like Google only pay 2.4% effective income tax. Facebook is looking to do the same:

Facebook, the world’s biggest social network, is preparing a structure similar to Google’s that will send earnings from Ireland to the Cayman Islands, according to the company’s filings..
http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

So it doesn't matter, you could lower corp tax to 10% and they'll still go through all kinds of global contortions to get it down to 3% or preferably nothing at all. Meanwhile, middle class folks trying to put food on the table and buy clothes for the kids don't have the luxury of international tax shelters.

But maybe you're right, maybe Goggle and Facebook should pay nothing and kids should be taxed more on their soda pop.

Sixstrings wrote:

careinke wrote:I like consumption taxes. First, they are voluntary. Second, they discourage over consumption, one of the two fundamental problems with mankind (The other overpopulation).

It's regressive. As people consume less, the tax would have to be raised to net the same revenue. The tax burden should fall on folks who have more money than they have time to consume, not on the classes who already spend every last cent.

I know you all think high taxes on the rich is communist and radical and all that, but the top bracket was 91% in 1963. There was no national sales tax. The rich paid a lot of taxes and didn't have enough to left over to fuel commodity or housing bubbles.

So you advocate increased consumption?

Sixstrings wrote:

The plan would lower income and corporate tax rates and offset them with a 6.5 percent national sales or "consumption" tax as well as an excise tax on sugar drinks like soda.

Once the door to a national sales tax (or VAT) is opened, then there's no stopping the Fed Govt's growth and fiscal waste. Do you think the sales tax will remain at 6.5%? It will keep increasing until it reaches the maximum tolerable level of well over 20% (some European VAT taxes now equal 25%). And although the Govt may temporarily lower income/corporate taxes, those too will eventually max out.

The US Fed'l Gov't is out of control, and a VAT tax will invite even more waste.

careinke wrote:I like consumption taxes. First, they are voluntary. Second, they discourage over consumption, one of the two fundamental problems with mankind (The other overpopulation).

you forget that in countries where consumption is taxed heavily (Argentina with 21%, Ukraine with 20%, UK with 19%) personal income taxes are a little bit short of a joke and virtually optional. AND it pays for national healthcare, among many other things. What are you gonna get here? An extra billion for Israel, extra trillion for all the Bergs, Steins and Mans on Wall Street? Anything else? Damn I swear I'll shop exclusively off Craigslist if this shit passes.

careinke wrote:So you advocate increased consumption?

The money has to go somewhere, Careinke. I think it's a better society if it's mostly distributed to a broad middle class rather than a minority of super rich who use it to play markets and fuel bubbles.

I can't believe some of you guys would like a national sales tax because you apparently think it will make our country look more peak oil doomy. You're confusing class wealth confiscation doom with peak oil doom, those are two different things.

If taxes must go up, shouldn't they be raised on ALL social classes and not just the lower 80%? Wouldn't that be fair Careinke?

Daniel_Plainview wrote:Once the door to a national sales tax (or VAT) is opened, then there's no stopping the Fed Govt's growth and fiscal waste. Do you think the sales tax will remain at 6.5%? It will keep increasing until it reaches the maximum tolerable level of well over 20% (some European VAT taxes now equal 25%).

Yup. The slightly lower payroll tax is just the bait. In the coming years income taxes will creep back up and so too will our new national sales tax.

Guys, peak oil is not a religion. You shouldn't want average folks to consume less so badly that you're actually in favor of a national sales tax.

Sixstrings wrote:Well this a real O - M - G moment. It's hard to believe. They actually want to LOWER corporate income tax and offset that with a NATIONAL SALES TAX of 6.5%, which will be on top of our state sales taxes.

Its no secret that the dems think the socialist European system is superior to the US system.

The healthcare system and other social welfare programs in the EU are funded with VAT taxes (sales taxes)....it should come as no suprise that the Dems would want to increase taxes using an EU-style VAT tax in order to pay for increased social programs (like Obamacare).

Sixstrings wrote:If taxes must go up, shouldn't they be raised on ALL social classes and not just the lower 80%?

Every social class pays VAT taxes. The more you spend the more tax you pay.

The healthcare system and other social welfare programs in the EU are funded with VAT taxes (sales taxes)....it should come as no suprise that the Dems would want to increase taxes using an EU-style VAT tax in order to pay for increased social programs (like Obamacare).

So we are going to get universal healthcare with this VAT tax?

Tell us Planted.

"In other news, a group of politicians said something stupid. More as the story unfolds...."

I would not hold my breath on this being implemented....

kublikhan wrote:I would not hold my breath on this being implemented....

Desperate governments will take desperate measures ...

Plantagenet wrote:Every social class pays VAT taxes. The more you spend the more tax you pay.

But as you move up the necessities of life are a lower percentage of total income.

Why is this such a hard concept.. if the Republicans want us to continue 4 more years of war, and trillion dollar wars have to be paid for, then go look for the money where it can be found in the largest piles -- the rich.

I guess this is motivation to grow my own food, buy used, make my own, use less, and work less cause I'm not in the mood to feed this beast anymore.

Hmm - sounds like another layer of bureaucracy, since the capacity to report and audit retail sales would have to be copied at the federal level. A one year break on income taxes would be nice, but as other posters have mentioned, I would expect a significant amount of those jobs it creates to be destroyed when it returns. Until something causes wealth to be recirculated in the real economy, I don't see any type of stimulus having a lasting effect.