Autonemesis

Sort of like the way companies are allowed to adopt any sort of accounting standard they choose, so long as they disclose it? EBITDA? Stock market bubble? Is your memory so short? Having no oversight of the VAT you propose is asking for abuse. No, given the history of corporate culture, especially recent history, it is tantamount to an invitation and solicitation to abuse.

excreationist

This would be a tax dodge for everyone though - it wouldn't be a dodge for thousands or millions of dollars per year for the rich.

8of9

Sorry, I've stumbled into jargonland again. I meant a flat rate sales tax, or a VAT.

I'm intrigued by your suggestion of a VAT, where the enforcement is limited to reporting and comparison. One really nice thing about both sales tax and VAT is they GREATLY reduce the number of taxpayers, making collection, enforcement, and even taxpayer education and assistance more manageable.

I'm on board!

Ultron

Proof you say?

""Our system of taxation is based upon voluntary assessment and payment, not upon distraint."

-The Supreme Court
Flora v. United States, 362 U.S. 145, pg. 176"

Sorry, but the 16th Amendment doesn't mention the word voluntary or optional:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. "

There's no qualifier here.

I'd like to read more on that Supreme Court decision but we don't have voluntary due process protections or voluntary equal protection laws either. You can't just pick and choose which federal powers or protections you ignore.

excreationist

Loren Pechtel:
Are there any countries that have a tax system anything like that? (i.e. no income tax)

Kinross

The only country I could find with only a consumption based tax is the caribbean island Anguilla

theyeti

With a national sales tax, the rich wouldn't need a tax dodge. They would already be paying a far smaller percentage of their income in taxes than the poor and middle class do.

The point is that a national sales tax would still have loopholes and tax cheats. Rather than rich people taking advantage of it, it would be businesses and consumers. And in order to plug those loopholes and twart the tax cheats, we'd need a tax code just as complex as what we've got now. I believe it's been tried elsewhere and found to be too onerous to administer. I'll look for some links.

theyeti

Loren Pechtel

I'm not talking the joke that often passes for accounting.

What I'm saying is that you have a very simple enforcement mechanism--you must pay as much as you claim with 1099's. Anyone trying to cheat is obvious. As for allocating the VAT against the wrong goods, so what? It does them no good. They still have to pay the same # of $. There's simply no incentive to cheat.

Self-enforcing systems are very different from honor systems. The former work, the latter do not.

Consider your income taxes. If you got a W-2 (or is it W-4?) or a 1099 you would of course report the income because you know the IRS matching system would catch it if you don't. No complex system is needed because if the companies don't give the forms they have to pay tax on the money.

ZiprHead

I remember when Ross Perot was running for president, they were talking about his taxes. He paid 8%. At the same time, my wife and I paid 11%. You estimate yours to be 13%. So much for the rich paying so much more in taxes.

Loren Pechtel

Whenever you have a situation like that where somebody has to eat the buck a report & compare system is likely to be the best answer.
One of our main competitors finally has gotten nailed by the EPA and will probably be gone soon. Their major falsification of emissions reports has been common knowledge for something like 10 years. With some sort of pass-the-buck system the manufacturers of the chemicals in question would have reported the sales and they wouldn't have been able to get away with simply saying they didn't use much of any stuff.