Why we need to eliminate the Federal Income Tax and move to a National Sales Tax

Did you know that the current fiscal budget to fund the IRS is 12 Billion a year...  The tax code is current two volumes book 1 is 1,404 pages and book two is 1,248 pages, for a total of 2,652 pages.  We could eliminate this completely from our current tax system by implementing a simple federal sales tax. 

Everyone gets taxed the same amount for all purchases except food, we do away with the complex tax laws, the IRS and the country is getting a consistent income stream from everyone in the country. That means that if you are a visitor to our country, a citizen, a migrant worker, an illegal immigrant, a millionaire or a billionaire, everyone pays the same amount. 

What would that look like for the everyday citizen in California:

• Highest Federal tax bracket is 38%
  
• State income tax is ~10%
  
• State Sales Tax is ~ 10%
  
• This person is paying 58% of their income in taxes.

The flat sales tax that is currently proposed in Congress is ~15% after the first year and this would reduce the taxes for the highest paid tax bracket by 33% in the State of California.  This person would now be paying 25% in taxes vs 58% giving them more ability to save, purchase more and have a more meaningful life without over half of their income going to taxes.

Here is the proposed Bill: https://www.congress.gov/bill/117th-congress/house-bill/25/text?s=1&r=5#toc-H1268FEE532144384B5A58955D94CBC21

Many people not reading the entire bill are saying it would be a 33% tax, it is not. The first year it is implemented it would be a 23% tax and then after it would be ~15%.  

Here is what Congress found relating to Federal Income Tax:

"(1) retards economic growth and has reduced the standard of living of the American public;

(2) impedes the international competitiveness of United States industry;

(3) reduces savings and investment in the United States by taxing income multiple times;

(4) slows the capital formation necessary for real wages to steadily increase;

(5) lowers productivity;

(6) imposes unacceptable and unnecessary administrative and compliance costs on individual and business taxpayers;

(7) is unfair and inequitable;

(8) unnecessarily intrudes upon the privacy and civil rights of United States citizens;

(9) hides the true cost of government by embedding taxes in the costs of everything Americans buy;

(10) is not being complied with at satisfactory levels and therefore raises the tax burden on law abiding citizens; and

(11) impedes upward social mobility."

Here is what Congress found relating to a a National Sales Tax:

"(1) is similar in many respects to the sales and use taxes in place in 45 of the 50 States;

(2) will promote savings and investment;

(3) will promote fairness;

(4) will promote economic growth;

(5) will raise the standard of living;

(6) will increase investment;

(7) will enhance productivity and international competitiveness;

(8) will reduce administrative burdens on the American taxpayer;

(9) will improve upward social mobility; and

(10) will respect the privacy interests and civil rights of taxpayers."

Refunds for Low Income households

The proposed plan includes the ability to submit a refund for low income families. This would accommodate Seniors and families that qualify for low income and provide a refund for sales taxes each month.  The process would allow qualifying families to request a refund because they are below the poverty level.  

In Summary:

• By implementing such a plan would allow local and State governments to manage the national sales tax and eliminate the IRS and 12 Billion a year in cost associated with running the IRS.

• The 2021 Federal tax income is ~ 4 trillion and the taxes are unfairly distributed across the United States with the middle class paying the lions share of the taxes.

• Projected Retail Sales in the US for 2022 is 7 trillion and the sales tax income from just retail sales would be ~1 trillion

• Projected Home Sales in the US for 2022 is ~45 trillion and the sales tax income from just the projected house sales would be ~6.5 Trillion.

Basically, by implementing the federal sales tax we would eliminate the 12 Billion in cost to operate the IRS and we would improve our federal tax income to ~ 7.5 Trillion. Yes, we almost double the tax income which would allow us to fund Social Security, reduce the federal deficit and improve the lives of every US citizen.  It's time to make this change and begin to fix our economic crisis in the US.  I will be speaking more to the need for audits that need to be in place for every government agency in conjunction with our increased revenue from a national sales tax.

References:

Census Data: https://www.census.gov/library/visualizations/interactive/adult-and-under-the-age-of-18-populations-2020-census.html

US Tax Revenue: https://www.thebalancemoney.com/current-u-s-federal-government-tax-revenue-3305762

Retail Sales: https://www.statista.com/statistics/443495/total-us-retail-sales/

Housing Market Growth: https://www.zillow.com/research/us-housing-market-total-value-2021-30615/