The United States Tax system

Discussion in 'Stock Market Forum' started by MalorieJX, May 28, 2015.

  1. CoolCat

    CoolCat Member

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    That's exactly the proposal. I think it would be a great system. It would do a better job of spreading taxes around fairly.

    I think it would make a big difference in how we handle customs, though. Most countries will allow you to get a refund on sales tax when you leave the country if you aren't a resident. (The U.S. is one of the countries that doesn't allow this, probably in part because our sales tax is at the state and local level rather than federal.) That would mean you'd be able to buy stuff tax free in another country and bring it here. Currently you don't have to pay import taxes on stuff you bring from other countries as long as it's for your own use and it's under a certain value limit. You would probably start to see people bringing more stuff back with them when they travel internationally if the sales tax here got too high.
     
  2. Penny

    Penny Well-Known Member

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    People who work under the table don't pay tax regardless of the system so I don't see what that has to do with anything.

    Raising tax mainly via sales tax and exempting core necessities means you get most of the tax from people getting most of the benefits out of the economy and you avoid taxing anyone below an acceptable subsistence standard of living. You also avoid absolutely walloping wealthy people and making them carry the entire system on their backs because a sales tax never gets up into the 40% or 50% bracket.

    I have lived under several different tax regimes and one of the things I noticed is that sales tax based systems also have lower overall tax. Hardly any nation spends as much on tax as the US parly because the system is complex, unwieldy, expensive to regulate, and crooked. Even if you are not a huge fan of sales tax per se (which I am) at least it is simple and transparent.
     
  3. AtlantaSports

    AtlantaSports Senior Investor

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    Preach, JR. No, but this is a serious problem in our tax system. It is robbing retirees.
     
  4. AtlantaSports

    AtlantaSports Senior Investor

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    What would you do, if you were in his shoes?
     
  5. JR Ewing

    JR Ewing Super Moderator Staff Member

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    The thing is that any sales tax, gas tax, carbon tax, etc is only going to be piled on. Politicians in general want to tax us more and spend more and more of our money.

    I wouldn't mind paying so much in taxes if I knew I could trust politicians and government hacks to spend it wisely and to cut down on overall spending, but that ain't the case. Spending $5k for each hammer and $1 mil or more for each port-a-potty they buy from their buddies won't get the national debt down any.
     
  6. SilverMill

    SilverMill Active Member

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    I've been following Donald Trump's talks and interviews regarding foreign policy, world trade tax-system, creating jobs, restoring back Social Security money hard-working people put in, heavy sanctions on Iran's nuclear program, and America picking up the mess of 17 trillion dollars debt the current US president made US a laughingstock in the world. Donald Trump-- he's got a lot of sense, courage, persistence and intelligence.

    America needs a Trump!
     
  7. Penny

    Penny Well-Known Member

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    I think one thing both sides of the US political system should be able to agree on is a simplified tax code, no matter how they approach it. Complex tax systems are less efficient and tend to benefit the more wealthy and more dishonest who can pay professionals to find and exploit loopholes.

    I had hoped that when congress was gridlocked this might have been one of the issues they could agree on and move, but no such luck. Many countries have tax codes so simple that people with only a salary as income do not need to even file.
     
  8. Rosyrain

    Rosyrain Senior Investor

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    The thing that bothers me the most about the US tax system is that they say that you are supposed to pay X amount based on your family size and income and then they take that out of your check, depending on what you claim on your workers W4 form. They then hold that money in their accounts until the end of the year, and low and behold most of us come to find that we paid too much in taxes and get a refund. Meanwhile our money has been sitting in the government account collecting interest all year long! A lot of us get a refund at the end of the year for a couple thousand dollars because we are nervous about having less pulled out and ending up owing at the end of the year. The IRS requires that you pay what is owed by April 15th or you get penalized. We don't get to penalize the IRS for holding too much from us!
     
  9. petesede

    petesede Guest

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    Sorry, but that is on you. If you have a salary job, it is very easy to predict what your tax liability will be and then adjust your withholdings appropriately. You said the exact problem... most people are afraid of having to pay a large amount on April 15th, so they overpay during the year. The truth is that the smart thing to do is pay nothing during the year, invest that money, and then pay your full tax liability on April 15th.. but the problem with that is most people do not have the discipline to actually save the money themselves, as soon as they have that money in their pocket they are going to spend it, and then get to APR 15 and not have the money. But again, the tax rules make it pretty easy to pay everyone on April 15 if you want to. Having the gov´t play babysittter for your during the year is the taxpayers decision.
     
  10. petesede

    petesede Guest

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    The problem is that our tax code was not written at one point in time, it was written over 80 years, and every year new deductions and no allowances are added. The exact same thing would happen if you simplified the tax code or went with a sales tax.. their would be individual congressmen in the pockets of certain industries that would gradually add exceptions, allowances and breaks to whatever system is put in place, and on the whole most of those allowances would look like they make sense. Mortgage interest deduction? deduction for installing green technology... the list just goes on and on of useful things that would end up being added to the tax code.
     

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