What would the flat 30% "consumption tax" do to people on Social Security?

[Ferrets are Cool]

Would they be exempt OR would it hit them very hard? From what I can find, they would be on the short end of this fiasco.

I know it will not pass in the foreseeable future, but I also didn't think ROE would ever be overturned.

[gab13by13]

1. Instead of paying $200 for groceries

People will pay $260.

[dflprincess]

23. That includes no more FICA tax

Meaning no more tax dedicated to funding Social Security making it easier to destroy the program.

[SKKY]

27. So, the price of everything raising 30% would be a "wash"...

...What is your basis for this because every report I have read on this is fairly devastating from a financial perspective.

[dpibel]

32. "Could be" is carrying big weight there

If you think the effective tax rate for anyone on Social Security, or anyone making less than the median income, is higher than 30%, I think you're full of beans.

[we can do it]

36. Not even remotely true.

[moonscape]

38. And for those of us retired, not in the

work force and not able to be, who live on social security and modest savings? Definitely not a wash.

[Ms. Toad]

40. Sales taxes are extremely regressive.

People who must spend all of their money to survive will essentially be paying a 30% tax. Those who can afford to tuck a substantial portion away in savings will be paying a fast lower percent of their income in taxes.

(That's a broad brush explanation if why it is regressive. The details will differ, depending on what is taxed, and whether there are any exemptions. But the principle remains the same for all sales/value-added taxes.)

[Ferrets are Cool]

50. There is NO wash here. It is so fucked up that ONLY a repug could think of it.

[Johnny2X2X]

2. It would devastate the retired and the poor

Now I'm sure even GOPers would exempt food from it, but everything else would crush the poor and the middle class who spend most of their incomes just to live. It would be the most regressive tax imaginable with the rich paying 1-2% of their incomes in taxes and the poor paying closer to 30% of their incomes.

And it would utterly destroy the economy by encouraging people not to spend money, but rather to hoard it.

[exboyfil]

8. Tennessee does not exempt food from sales tax

Hard state to be poor in.

[Johnny2X2X]

10. You may be right

Bolder and bolder craziness.

Here's the thing about the GOP, they know that anything they say is fine as long as Trump will support it. So they no longer care about it flying with the public, they have an audience of one. No position is too extreme and their principles no longer matter. Trump is their go/no go gauge.

[MuseRider]

20. Same in Kansas.

Our Dem Governor tried to get it removed but the R's who rule all in the land made sure she could only get a little taken down with the rest to come later........and that depends on who is in charge or if the R's will ever vote for it again.

[CTyankee]

33. all food? Including basics like food and milk?

[exboyfil]

34. I think it is still so

It was that way when I moved back to Iowa in 1999. I don't remember anything being exempt.

[rsdsharp]

37. Grocery food is exempt from sales tax in Iowa, as are a number of other items.

[exboyfil]

39. I was referring to Tennessee where I lived in the late 1990s

You are right about Iowa exempting food. Most of the time my grocery trips have zero sales tax here in Iowa.

[MichMan]

13. Should regressive state sales taxes be abolished ?

[CTyankee]

35. Yes, of course and replaced by progressive sales taxes that do not hurt the poor or middle class.

Now we get into what is a progressive tax and I would say a luxury would qualify. If you can afford a high end car you can afford a tax on it.

[MichMan]

41. How would a progressive sales tax be implemented?

Would the government need to issue an id card stating your sales tax rate based on your previous year's income? You would need to show it at the gas station, supermarkets, and any other in person or on line retailer? Seems cumbersome.

What if someone sent their High School aged kid to the store to buy something?

[CTyankee]

42. Wouldn't it be at the time of the sale of the vehicle? A sales tax.

[MichMan]

45. What about all everyday purchases ?

Gas, groceries, lunch, Amazon, car repairs, hotels, and everything else people buy daily.

Sales taxes on everything would depend on your income level.

"Before I can ring up your lunch bill, I need to see your tax return from last year to determine the amount of sales tax you owe "

[CTyankee]

46. We have a dedicated tax for gas in CT. Taxes are used to highway maintenance and improvement I

believe. Some things you buy in the supermarket are taxable which I cannot enumerate but my guess is anything you buy that is not deemed a necessity.

There was an issue a few years back over taxing fast food. My husband was head of the Homeless Commission for the city at the time. He pointed out that the homeless eat fast food because, by definition, they have no kitchens to cook/heat the food.

[MichMan]

47. We pay sales taxes on gas in Michigan at 6%

On addition to all the state and federal gas taxes. Grocery items are not taxed, but all restaurants including fast food are.

How would all the places I mentioned implement a progressive sales tax based on income level?

[CTyankee]

48. This might help.

https://www.taxjar.com/blog/food/food-beverage-sales-tax-connecticut

[hippywife]

24. Oklahoma also has a grocery tax. nt

[bucolic_frolic]

3. Changes in the tax code have complex effects

Seniors would worry. It would bankrupt their nursing home plans earlier, and some of those costs would eventually be borne by the Feds. Long term care insurance participation would skyrocket, so insurers would be juiced. it would reduce inheritances for all but the wealthy, but young people might vote for candidates in favor of a flat tax because the fallout for young people would be decades away.

It could be exempted, or partially exempted, or a giant tax credit. I don't see how you reduce the number of IRS workers any easier than any other downsizing.

What would Congress do if all the tweaks to income, deductions, credits, exemptions, set-asides, carryovers, write-offs were castrated? There are so many euphemisms for the exclusion of income that naming them is a growth industry!

The tax code is so complex someone estimated it would take more than a year to read it? It's unsustainable. I dread tax season. I believe we need a very progressive tax code with few if any deductions. Make big entities PAY for their activity instead of lobbying their way out of it. This tax code was written for real estate developers and large landlords and oil wildcatters because that's who Congressmen listen to!! Every city has its slumlords, who write off everything, depreciated, fail to repair or maintain their inventory, and treat renters like dirt. The oil industry creates jobs and money for shareholders and economic growth. And it's all a tax deduction! I think the investor Robert Kyosaki detailed some of these in some of his books. It's documented, that's why I mention it, not secret knowledge or opinion.

[Captain Zero]

9. Tax all contributions to PACs at 35 per cent

That would raise some money.

[Girard442]

29. Imagine there's a study showing benefits to moving car steering wheels to the right side.

That is, to make American cars like Brit cars.

Well, could be I suppose, but -- the plan requires all cars to be switched simultaneously, while many are moving down the road at highway speed.

That's what a huge change to the tax code would be like.

[Wounded Bear]

4. Sales taxes are among the most regressive form of taxation...

[CrispyQ]

17. Cruelty is the point in so much of their legislation.

They seem to want to outdo each other in being the lowest & most vile among us.

[2naSalit]

30. Seems like it.

Pretty sure it's true.

[Buckeyeblue]

5. It would bury them...most couldn't afford to live

[Ferrets are Cool]

52. Maybe that is why the repugs are all for this.

[SheltieLover]

6. Red hellhole TN has no incone tax, only sales tax.

It woukd devastate seniors on SS!

And single parents / working poor.

Imagine paying 30% more for everything!

[MiHale]

7. The repubs are going to accelerate our interment plan.

If you can’t afford to live…

[lame54]

11. I would not have been able to afford my house

[MichMan]

12. How do retirees in Canada, UK, and the EU handle their VAT taxes ?

[bucolic_frolic]

15. They get a far better social safety net and housing is about 50% less than in the US

On balance, they get more for their money than we do because we have to prop up the wealthy and the corporations.

[mahatmakanejeeves]

21. Housing prices in the UK

Last edited Mon Jan 23, 2023, 01:46 PM - Edit history (1)

{Titles of two replies combined}

12. How do retirees in Canada, UK, and the EU handle their VAT taxes ?

15. They get a far better social safety net and housing is about 50% less than in the US

This seems unlikely. I did not check to see how much the prices are in terms of average annual salaries. I looked only at the UK.

Latest House Prices UK Data: Average House Prices UK with Regional Graphs

House Prices
Last Updated: 18/01/2023

[bucolic_frolic]

31. There were articles here on DU last spring or summer comparing EU and US housing

[MichMan]

43. If houses in Europe and the UK are 50% cheaper than the US, that means average cost here is $732k

I seriously doubt that the average home cost in the US is $732,000

According the link above, the average house price in the UK is 296,000 GBP. That equates to $366,000 USD.

[dpibel]

51. A mere $542,900

At least that's what the fed thinks. https://fred.stlouisfed.org/series/ASPUS

So, you're right, it's merely half again as much.

Still a pretty meaningful difference.

[Xoan]

14. Stop fretting ...

it aint gonna happen.

[CrispyQ]

16. A 30% tax on everything will kill the economy.

Retail associations must be howling at this. ???

Speaking for myself, a 30% tax would make me change my spending habits drastically. I would hardly ever treat myself & would only buy what was needed. No more art supplies, no more pistachios. I would look to cut my spending anyway I could.

[Chainfire]

22. Of course it would wreck the economy; that is the point.

The ink would not be dry on the law before the wealthy were writing exemptions. Living primarily on SS, it would be like getting a 30% hit on my total income. The greatest impact would be on the people who were already living on the edge.

Why not just a 50% tax on luxury items, like that second home, or that 150K car?, or on an income over 500K? Boy that would raise a stink! We are watching the Republican party making a run at destroying the economy so that their donors can come in and buy up everything. It is not Fascism as much as feudalism in the making.

[CrispyQ]

25. 21st Century Feudalism

I think I read that in a Thom Hartmann book & he agrees with you, that's where we're headed.

I found my mother's ration stamps after she died. She was just a little girl at the time & my grandmother had to sign for her, but even as a kid she was allotted a share of things, sugar, cheese, things like that. Todays' ration stamps are dollars. If you have them you will get stuff, & if you don't, too bad for you, loser.

We're on SS too & it would be a huge hit for us.

[MichMan]

44. Didn't we try a luxury tax before causing lots of blue collar and middle income people to lose jobs?

[Ferrets are Cool]

53. Yup.

[Xoan]

19. FFS give this nonsense a rest.

Unless you enjoy being owned by these morons.

[RANDYWILDMAN]

26. This is TW talking point ??

is is not ?

If you have massive wealth you avoid feeling any pain from a small consumption tax, now if you put this on capiltal gains I might listen


Sales taxes are regressive just like right wingers and they ONLY benefit people who already have wealth

[SKKY]

28. I think it's hugely important to talk about it because it forces them...

...to defend their positions. We all know most Republicans are chomping at the bit to get rid of the IRS. This 30% consumption tax is just the first shot across the bow. So, I say let's oblige them. Let them bring it to the floor for a vote, and then tie it around the neck of everyone who voted for it. Let's take it seriously, and let's make sure America knows just how devastating it would be if you increase the price of everything by 30%, and that their representative voted to do just that. It all goes back to that proverb, "When your adversary is making a mistake, don't interrupt them."

[Ferrets are Cool]

54. Thank you.

[GoodRaisin]

49. Pretty easy to figure out.

What % people on SS are paying now, vs. 30%. Devastating.