Just needed a place to type out some thoughts - people more politically and mathematically inclined feel free to add replies.
As someone admittedly apolitical I feel like math should govern this argument about closing down IRS and going to nationwide sales;
From ‘21-23 it cost about ~6.6 trillion on avg to fully fund the govt - IRS eats up ~16 billion of that, so ~6.58 trillion left, IRS typically collects ~4 trillion (net).
From what I’ve read The FTA proposes a 30% sales tax while eliminating wage tax. Proponents of FTA call it 23% since a $30 increase on $100 item is a 23% rise in cost when it is priced at $130.
This vs the federal + state + local sales tax combo that right now “takes” ~19-33% between wage + state sales taxes (for states w/ it).
Technically FTA gives people more to spend but likely leads to increasing costs of products & services. So family making $60k takes home 100% but that $1000 TV is now $1300.
Given that consumer spending in 2024 was $16.2 trillion+ the amount generated thru a FTA plan would be ~4.9 trillion dollars, significantly more than the IRS brings in at gross & net.
Yin: goods & services cost more
Yang: people take home full earnings, much easier taxation process, higher yield for gov’t (could be yin depending on POV)
Tertiary outcomes: low earners impacted by higher cost of goods (as they are now regardless) likely leads to less spending by them, potentially offset by more spending by higher earners who now see more money available for use.
Further consideration: Potential ripple effects? How is state govt impacted? Secondary market for goods (FB marketplace, eBay, etc.) possibly impacted - and would this lead to cultural shift to collect less material goods?
As someone admittedly apolitical I feel like math should govern this argument about closing down IRS and going to nationwide sales;
From ‘21-23 it cost about ~6.6 trillion on avg to fully fund the govt - IRS eats up ~16 billion of that, so ~6.58 trillion left, IRS typically collects ~4 trillion (net).
From what I’ve read The FTA proposes a 30% sales tax while eliminating wage tax. Proponents of FTA call it 23% since a $30 increase on $100 item is a 23% rise in cost when it is priced at $130.
This vs the federal + state + local sales tax combo that right now “takes” ~19-33% between wage + state sales taxes (for states w/ it).
Technically FTA gives people more to spend but likely leads to increasing costs of products & services. So family making $60k takes home 100% but that $1000 TV is now $1300.
Given that consumer spending in 2024 was $16.2 trillion+ the amount generated thru a FTA plan would be ~4.9 trillion dollars, significantly more than the IRS brings in at gross & net.
Yin: goods & services cost more
Yang: people take home full earnings, much easier taxation process, higher yield for gov’t (could be yin depending on POV)
Tertiary outcomes: low earners impacted by higher cost of goods (as they are now regardless) likely leads to less spending by them, potentially offset by more spending by higher earners who now see more money available for use.
Further consideration: Potential ripple effects? How is state govt impacted? Secondary market for goods (FB marketplace, eBay, etc.) possibly impacted - and would this lead to cultural shift to collect less material goods?
