VAT tax. Helluva an idea

[valarltd]

twistedchick has a piece on the Tax Fairness act here

So I got curious.

It abolishes all federal income tax. So all the money you pay would go right back in your paycheck.

In 2002, we paid $2100 in Federal taxes. Sounds good so far. That's about $175/month Who couldn't use that? There is no effect on state taxes, so the $853 we paid Arkansas will not change.

However, EVERYTHING you buy will be taxed at 23% more. Dude, that's a 33% sales tax in these parts! 35% on prepared foods.

In the last 12 months, we spent 3277 on groceries.
$1528 on household items
$8097 on Other, including clothes, books, gifts, fabric, yarn and all the ther stuff
$6753 on educational materials (including swimming lessons and band camp)

Total=16378
Using the 23% VAT, we would pay another $3767

Add 2146 on dining out, for an extra $493


We are now paying $4260 in taxes.
Before we were paying $2100.

This is fair, how?


And the tax rate will change after the first year. Some estimate it will go as high as 45%, which is how much it will take to keep the US running.

We would be paying $8335/ year in sales taxes.
Buying less is almost not an option as it is.

We aren't well-to-do. In 2002 we made over 62K. In 2005, we'll make about 55K. We're middle-class.


So don't just write your congresspeople. CALL them!

Comments

The so-called Fair Tax

[jkb.livejournal.com]

is the latest soak-the-poor scheme from rich, pampered Republicans. They think it's "unfair" that wealthy people, who are profiting like crazy within the infrastructure this country offers, are asked to pay their fair share of taxes to keep everything running. So they think that jacking up taxes on lower-income people to the point of complete ruin is a great idea.

People really need to fight for the simple, obvious concept that the progressive income tax is reasonable and just, and tell these spoiled Republicans to quit their whining and bellyaching.

[cathexys.livejournal.com]

you really are a perfect example of why this theory sucks! feeding, housing, clothing six people you certainly consume more than a couple without kids, for example, or a single person. in the old system they'd get penalized for that...here *you* get penalized...fair how???

thanks for an interesting brakdown!!!