Taxes by component as % of GDP

[Matthew]

There was a fairly well-fleshed out National Retail Sales Tax being talked about in the mid to late 90s that I thought was a pretty good way to eliminate income taxes and replace them with a consumption tax.

It allowed a universal rebate that effectively exempted the poor from paying any of the tax.

The feature of the NRST that I liked best was that it was an in-your-face tax.....every time you bought something, there it was right on the receipt.

This would certainly be better than the status quo. The universal rebate would be a good way to make the tax progressive without anyone having to reveal their income (which I don't think is any of the government's business). However, I really don't think the federal government needs to be directly taxing individuals at all but this could be a good transition away from direct taxation.

 

[usta in Portland]

Most of those factors...

are taken into account in the Economic Forum's Competitivness ratings. So, one way to look at them comparatively with other countries would be to tranche the rich countries by those rankings against the true taxation payments and see where we stand. It's damned difficult to place a dollar amount on something like underlying stability, but as the recent debt ceiling debacle showed, when that stability comes under suspicion the fallout is,at best, problematic and in the case of the S&P rating, downright bad.

Here is a link to the full GCI rankings report in PDF form. In the first 20 numbered pages the philosophy, methodologies and some of the important rankings are included. The US is ranked #4 in this report, down from #2 the previous year.
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

 

[toddr124]

VAT tax is not the answer

In all of the EU there is a VAT (value Added Tax) of between 15% and 25% on all consumer purchases. This was suppose to help reduce income tax on individuals. Instead the tax rates in most EU countries are higher than the tax rate in the US. Therefore they get to pay federal taxes on all purchases and income tax on the their gross income.

Do I know the answer? I wish. I like a 17% flat tax on income for an individual with no deductions (I know this will hurt the housing market) plus a VAT tax of 10% on all purchases. Plus raise the gas tax a nickel a gallon per year for the next 10+ years.

Will this balance the budget? NO! What ever the government brings in will be spent plus some no matter who is in power.

 

[usta in Portland]

A balanced budget and tax policy...

might best be decoupled except on the basic issue of how much we are taxed. With some sort of loophole, play favorites tax system eliminated, the battlecould be about how much government we can afford and not about what sub-set of the population is going to be paying for it.
The VAT and flat tax with no deduction has the great virtue of pinching everyone and doing so in broad daylight. Some would be hurt more than others but everybody would participate in one way or another.