More Micheal Agnello idiocy, this time on the National Sales Tax..
Today, amid his normal 3 hour sermon on how Terri Schiavo should be kept alive, he managed to go off on a couple tangents. One of which, was this "National Value Added Tax.," (that's a fancy name for what you and I call a Sales Tax). Agnello thinks this National Sales Tax is a great idea. He says Greenspan is on board with it, and he's even had a couple kooks from Fairtax.org come on 58 Live and do their best carny barker impression on how great their idea is. Hoppy had a guy on his show some time ago from Fairtax.org too.
Ok, here's the deal on this national sales tax. It's a joke. Complete joke. 100% joke. What the advocates of it DON'T tell you, is they are FLAT OUT LYING about the amount. The whole gist of it is this. Its advocates say a ~23% sales tax added to ALL purchases, will generate enough income for the feds, to do away with income tax. Personal and corporate. Therefore, you can do away with the irs, too. Sounds great, huh? Especially, when you look at your w2 and say, "Well hell, Bingmanch, the Feds already take out roughly 28% of my check, so that sounds like a savings of 5%. Sign me up!!!"
Not so fast, grasshopper. What Agnello and his fairtax.org idiot buddies don't tell you is this. It's NOT roughly 23%. For this to do what they CLAIM (ie, no more income tax, FOR ANYONE), it would have to be roughly 30-35%. See, their 23% comes from AFTER tax dollars. Which, incidentally, NOBODY uses to calculate a SALES tax. Here's an example of their "gorilla math" (props out to Worm - if anyone gets that reference, email me).
They say the National sales tax is ~23% [note: they'll never give you an exact number, but they'll say "around 23 to 25%"]
Widget cost 100 bucks in the store.
Tack on 35 bucks tax (remember, I said it was really more like 30-35%?). Now it costs 135. Divide the 35 bucks tax, by the total price. 35/135 = .259 = 25.9%. That's how they get the ~23% number.
Now, you, me, and every other human on the planet in that scenario would say the tax is 35%. But not if you use "their" after tax dollars computation. The 23-25% number they spew, is basically a lie. That untruthfullness right there, on such an integral part of their "plan" should be enough to deter you from giving any of the National Sales Tax bullshit any credibility. You, me, and every other consumer is not only going to make up what was OUR share of the income tax, we are ALSO going to be making up the share of income tax that PREVIOUSLY was paid by corporations. No thanks. With friends like this, who needs enemies?
Not to mention, like all sales taxes, exemptions will start to creep in. For preferred and well-greased lobbying groups, getting an exemption from the national sales tax on their widgets (widget A), will be prime goal #1. And then the rest of the non-widget A buying public will have to shoulder that burden too when they buy their other widgets (widgets B through whatever) to make up for the lost revenue from no tax on widget A. Once exemptions start to creep in, the whole system is thrown out of whack, and the burden gets shifted unequally to certain taxpayers who don't buy the exempted items.
But, boneheads like Agnello and company are just sooooooooooo enamored with how this would be a much more "fair" way to tax people, and get rid of that nasty, scuzzy, IRS. Yet, Agnello is also against gambling and table games, which, is the MOST fair tax in the entire history of mankind. If you don't want to support the gambling tax revenue by playing the slots or the table games, don't play. There's NOTHING more fair, than "sin" taxes. Booze, cigs, gambling, stuff like that, ONLY taxes those who partake of such activities, and if you don't partake, you don't pay the tax. What on earth could BE more fair? Yet Agnello is adamantly opposed to it. Just another instance of the idiocy that is Micheal Agnello. He wouldn't know "fair" if it was hiding in that cheeseball mustache of his.
Also, while everyone would want to do away with income tax, and the irs, just think about it for a moment. If you get rid of the income tax, you also reduce the federal government's ability to influence the economy with the tax code. For instance, if the feds want people to buy homes (as opposed to rent), they give an interest deduction on your income tax for mortgage payments. People buying homes is generally a good thing in society. Ownership drives our economy and way of life. Another area is, if the government wants you to save money (because maybe inflation is creeping up), they'll lower the tax rate on interest income. That gives you an incentive to save money. If they want you to spend, because the economy is slowing, they can raise the tax rate on interest income and give you a reason to NOT save. This kind of macro-manipulation of the economy is necessary at the federal level, to make sure the economy doesn't get out of control, one direction or the other. Pass a national sales tax and kill the income tax, and you remove the ability to impose those incentives.
Still not enough to convince you? You say, "Bingmanch, are there even MORE reasons the national sales tax is a dumbass idea?" Well, funny you should ask that, grasshopper, because YES, there ARE more reasons. For instance, most states have an income tax, that's based off the federal income tax (like how they tell you to do your Federal Income Tax before you do your West Virgina Income Tax). So, do away with the federal income tax, you now have no way to generate your STATE income tax. Sure, each individual state could go back and rewrite all of THEIR laws to implement it without a national income tax, but how much is that going to cost each state? Are the feds now going to give each state an appropriation to cover the costs of switching over? My bet is no. But thanks for the added cost to my state government, Fairtax.org!! Also, how is the national sales tax going to be administered? Remember, no IRS anymore, so evidently, the feds aren't going to be administering it. Are they going to now pay the states even MORE money to cover the cost of hiring additional workers to keep track of national sales tax generated in State x? Again, my bet is no. My favorite example is those states that don't currently have a sales tax. They won't even be somewhat ready to pick up the added administration. They aren't auditing anyone now for sales tax in those states, but they'll have to start. Again, don't hold your breath for federal money to implement this. Gee, if an individual state needs to raise revenue, they'll probably just raise your state sales tax 1% or tack on some more tax to your gasoline or something. Yeah, I know. Me too. I can't wait for that either.
How about even MORE reasons? I'll just give you one final reason. To implement a national sales tax, and do away with the income tax, would cause such a ripple effect on the state levels, the actual sales tax rate, to bring in the same amount of revenue as the income tax, would have to actually be around 45-50%. Yes, I said 50%. The costs of whatever you buy, would go up roughly 50%, for the tax to cover everything the fairtax.org boneheads (and Agnello) say it will, and replace the state income tax revenue lost to not having a federal income tax (that includes the lost income tax revenue to the states). But hey, if you think I'm nuts and way off base here, call the State Tax Department, and ask them yourself. I'm sure they can put you in touch with someone who'll validate what I'm saying. Their 23% just will not do what they say it will. If you don't want to call the Tax Department, just go find an accountant or some other kind of tax professional, and ask them. This idea of a national sales tax is not something new. It's been kicked around for years. And consequently, anyone who's in the know (and not some bonehead shill for some bullshit org like Fairtax) about taxes will tell you just what I did.
Don't get me wrong. I'd LOVE to not have to pay income tax. Hell, I'd love to not have to pay ANY tax. As I'm sure most of you would too. But I also don't want to be footing the tax bill to the tune of 50% on the widgets I buy.
But people like Agnello, eat this crap up, and spew it over the airwaves daily, brainwashing God only knows how many poor uniformed Mountaineers who don't have the time to figure this stuff out for themselves. That's why I'm here.