1. This will NOT effect any of the existing Taxes levied at the State, County or
local City levels. All Income, Property and Sales Taxes will still be in effect on
the non-Federal areas. In fact, all Income's may be based on your "Gross"
Income rather than that of your "Adjusted" level since the Federal Government
( the IRS ) will no longer look at your Income amounts. This in affect will
increase your Income-Tax liabilities at all non-Federal Government levels.
NO STATE, COUNTY OR LOCAL GOVERNMENT HAS AGREED TO ELIMINATE
ANY OF THEIR CURRENT METHODS OF RAISING THEIR NEEDED TAX
REVENUES - AND THEY WON'T TAKE A CHANCE IN TRUSTING THE
FEDERAL GOVERNMENT TO PROVIDE ANY LOST REVENUES IN MAKING
CHANGES THAT WOULD IMPACT THEIR OWN RESPONSIBILITIES.
2. A Federal Consumption-Tax would mean that everyone would pay that tax
at the time of purchase of the goods or services, including all non-Federal
Governments who also consume goods and services. The Federal Sales
Tax would apply to all goods and services ( not linked to what a State has
subjected to their State Sales-Tax ). That means that if a good or service
is "tax-exempt" on a State Sales-Tax basis, it doesn't make it "tax-exempt"
on a Federal Sales-Tax basis. Again, ALL goods and services would be
subject to the Federal Sales-Tax, including: the purchase of Homes, Food
Medical procedures, all Education, Legal and Tax services, everything. If
the Federal Government made any non-Federal Government entity, or
any good or service "exempt" from the Federal Sales-Tax, it would drive up
the needed Federal Sales-Tax Rate to perhaps as high as 50 PERCENT ! ! !
3. It has been suggested that the Federal Government would give a monthly
rebate on all Federal Sales-Tax paid for necessities. I guess that means that
people who currently file ( one ) Income-Tax Return per year with the IRS,
and also people who currently have no requirement to file an income-tax
return with the IRS, will then be responsible to file ( twelve ) Federal Sales-
Tax Rebate Returns each year with the Federal Government. The IRS DOES
NOT stand for the Internal Income-Tax Service, it stands for the Internal
Revenue Service. Revenue is Revenue, and since there has to be some
Federal Agency that enforces that these revenues are being paid, I'll bet that
everyone currently working for the IRS won't lose their job, but will be doing
things with Sales-Tax Revenues instead of Income-Tax Revenues. In fact,
since all taxpayers will need to file 12 returns a year instead of just one and/or
none, there probably will be a need to expand the IRS to as much as three or
four times its current size. Question??? How do you verify what the proper
rebate amount would be? Does the Taxpayer have to make a copy of every
receipt and send it in each and every month, and who decides what becomes
a necessity??? How much energy, natural resources, storage/filing spaces
and expense will be consumed
by this new tax system???
4. Many Low-Income and Retired Taxpayers will be hard hit by the potential high
increase in cost of everything they buy. In fact, they most likely will not be able
to afford making copies of their receipts, not have access to the Internet to
obtain Sales-Tax Rebate Forms, not have the postage necessary to mail in the
required rebate request, and some may not even have a reliable address where
they can receive the rebate itself.
5. State Governments will receive a huge
bonus in their State Sales-Tax
Revenues since many States will require that their State Sales-Tax rate be
applied to the consumer purchase only after the Federal Sales-Tax was
added to the prices of the goods and/or services, and the State WILL NOT
PROVIDE A MONTHLY SALES-TAX REBATE BACK TO THE TAXPAYER.
Many more thoughts coming soon on this subject.