This is not a typical blog. My posts will be edited and maintained.

Please note that these posts concern all levels of government, not just federal.

Tuesday, December 8, 2009

Ideal Taxation - a Flat Tax

The ideal tax/revenue collection idea:

A set-percentage sales tax.

Certain categories of goods would be excepted, such as staple foods. Also, used or second-hand goods, such as home sales, would not be taxed. Services, similarly, would not be taxed. But all sales of taxable items would be taxed, unless such products are purchased by an approved tax-exempt organization or are to be incorporated in a product that will become itself taxable. Any taxable good sold within the jurisdiction would be taxable and the taxes would be collected by the vendor. Residents would not have any reporting/remittance requirements, but may need to be cautioned that purchases from outside the jurisdiction for those other than the resident's immediate family could be deemed as conducting business without a license and tax evasion.

Discussion would be needed concerning restaurants and other service-heavy businesses. May they choose to pay the sales taxes themselves and provide a single inclusive price to the customer? May they pass itemized taxes to the customer? Or is food prep considered a value-add to the product? Would such a business need to distinguish value-add services from customer-oriented services? Remember, service charges are not considered to be taxable.

Ideally, the percentage would be around 20%. I would have hoped 15%, but many studies have been done that show a 20% rate is ideal.

And this would be the only tax or fee of any sort. No income tax. No water tax, gas tax, energy tax, excise tax, import tax, export tax, real estate tax, property tax, inheritance tax, gift tax, building permit fees, inspection fees, car inspection fees (though inspection companies may charge), car registration fees, car tag fees, car title fees, pet tag fees, so on and so forth.

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