The two main points i have against it are: 1. Giving the government a new tax (VAT or sales tax) is giving them a new way to extract more money from the people. They may promise it is only 9% and never more, but the history of the income tax shows that once that initial barrier has been broken, they can easily start raising it. All opposition must be given to never even letting start a tax than pretending we can stop it from being raised later.
2. We can actually get rid of the income tax altogether and return to something like year 2000 level spending. To me that sounds like a much better plan. Don't you think it would be easier to both implement and sell to the public that we are cutting spending to year 2000 levels but they will never have to pay income tax?
3. Having all three taxes seems incredibly inefficient. This would require all households to still file income taxes, all businesses to still file corporate taxes, and then in addition all business would have to collect and send in sales tax as well. If we must collect money, lets collect it at only one point in the economy rather than 3.
The governments revenue is only about 40-45% income tax. If we got rid of income tax that means we would only have to cut spending by about the same amount. To do that we only need to go back about 10 years.
Yes there are other factors like population growth and inflation but for the most part the increases to government spending in the last 10 years are not due to those two causes. Instead you could make cuts to things like the war budget. But with Cain elected, do not count on it.
I wasn't suggesting I like Cain, I was just interested in hearing thoughts on his tax policy. I definitely favor lower taxes but I think it's appropriate for us to pay some taxes. 9% is actually quite reasonable to me though that assumes the 9% is spent efficiently.
I would much rather see a 0-0-0 plan!
ReplyDeleteThe two main points i have against it are:
1. Giving the government a new tax (VAT or sales tax) is giving them a new way to extract more money from the people. They may promise it is only 9% and never more, but the history of the income tax shows that once that initial barrier has been broken, they can easily start raising it. All opposition must be given to never even letting start a tax than pretending we can stop it from being raised later.
2. We can actually get rid of the income tax altogether and return to something like year 2000 level spending. To me that sounds like a much better plan. Don't you think it would be easier to both implement and sell to the public that we are cutting spending to year 2000 levels but they will never have to pay income tax?
3. Having all three taxes seems incredibly inefficient. This would require all households to still file income taxes, all businesses to still file corporate taxes, and then in addition all business would have to collect and send in sales tax as well. If we must collect money, lets collect it at only one point in the economy rather than 3.
How would the govt pay for year 2000 spending if it collects 0 taxes?
ReplyDeleteWhat changed so much between year 2000 spending and today's spending, not including the bailouts (which hopefully won't happen again)?
The governments revenue is only about 40-45% income tax. If we got rid of income tax that means we would only have to cut spending by about the same amount. To do that we only need to go back about 10 years.
ReplyDeleteYes there are other factors like population growth and inflation but for the most part the increases to government spending in the last 10 years are not due to those two causes. Instead you could make cuts to things like the war budget. But with Cain elected, do not count on it.
I wasn't suggesting I like Cain, I was just interested in hearing thoughts on his tax policy.
ReplyDeleteI definitely favor lower taxes but I think it's appropriate for us to pay some taxes. 9% is actually quite reasonable to me though that assumes the 9% is spent efficiently.