Posted: Tue Aug 26, 2014 4:54 pm
Another good reason to do away with income tax and institute a national sales tax. You can make as much money as you want but you are going to pay a fair and equal tax on any money you spend.
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Weak argument. Many people (the majority) don't buy a new car every three years even with the current system.fredsheldon wrote:Is there any major country in the world that relies on Sales Taxes in place of Income Taxes to run their country? Does it work? Will people buy a new car every 3 years or so or keep what they have so they don't have to pay taxes? I guess I could google it and see if I can find my answer but I figured there are enough experts here that could give me a quick answer.
Good question. And as one who favors sales tax over income tax (because a tax is a punishment and the people who have jobs and produce goods should not be punished for doing so and a sales or consumption tax would go a long way into reducing wasteful personal spending and perhaps bring back a manufacturing culture that is focused on making things that last instead of the current "planned obsolescence" and the culture of "if it's broke, just throw it away and buy another one"), I thought I should at least do some basic investigation into that question.fredsheldon wrote:Is there any major country in the world that relies on Sales Taxes in place of Income Taxes to run their country? Does it work? Will people buy a new car every 3 years or so or keep what they have so they don't have to pay taxes? I guess I could google it and see if I can find my answer but I figured there are enough experts here that could give me a quick answer.
Then there's this chart that has a list of countries and their corporate, personal, payroll, and sales tax rates.The United States relies less on consumption taxes—]
And this:
When Japan raises its sales tax to 8% from 5% in April, it won’t set any international records in terms of the size of the increase or the amount levied (Norway, for example, has a 25% sales tax on certain items). But economists say other countries should take note of one unique aspect of Japan’s taxation: which source of tax income is the biggest.
Private economists’ and government predictions show that after the new levy is introduced, Japan’s higher sales tax will bring in more revenue than the other two pillars of the Japanese tax system: income and corporate taxes.
That would make Japan the only Group of Seven country for whom the biggest source of general tax revenue is a consumption tax.
Unlike the Japan of the near future, most developed countries rely heavily on direct income taxes to keep things running. Economists argue, however, that consumption taxes will be increasingly important sources of revenue as populations age and pension and medical costs rise.
If you consider the VAT a sales tax, I think the answer is yes.fredsheldon wrote:Is there any major country in the world that relies on Sales Taxes in place of Income Taxes to run their country? Does it work? Will people buy a new car every 3 years or so or keep what they have so they don't have to pay taxes? I guess I could google it and see if I can find my answer but I figured there are enough experts here that could give me a quick answer.
Can you provide some examples? I think the key concept in Fred's question is a sales (or consumption) tax instead of an income tax. I can find many countries that have consumption taxes in addition to income taxes. But so far, other than the information in my previous post, I can't find where a major country relies on a consumption tax for revenue in the same way that the US relies on the income tax.davebodner wrote:If you consider the VAT a sales tax, I think the answer is yes.
I might've spoken too broadly]http://en.wikipedia.org/wiki/Taxation_i ... e_2007.png[/URL] I SUSPECT a lot of countries with VATs have lower personal or corporate tax rates than we do. But, I can't prove that.heathicus wrote:Can you provide some examples? I think the key concept in Fred's question is a sales (or consumption) tax instead of an income tax. I can find many countries that have consumption taxes in addition to income taxes. But so far, other than the information in my previous post, I can't find where a major country relies on a consumption tax for revenue in the same way that the US relies on the income tax.
Has another country set an example that we can learn from of replacing the income tax with a consumption tax (not merely implementing a consumption tax) and has that been a success or failure? There have been many proposals for overhauling our tax code by getting rid of the income tax and moving to a sales tax. Personally, I support that. And if another country has done it, then we can learn from their experience.
