The National Sales Tax

Now... ya'll let yourselves be swindled by the Republicans over the whole estate tax thing (Link). Now I am seeing ya'll get swindled again. The whole notion of the National Sales Tax being supported by lower and middle income people just baffles me. It is a fact that the rich will pay less in taxes. Not even Boontz can argue otherwise... and it is a fact that the government needs money to operate. Where you think the money to pay for the US government will come from? It is not going to magically appear. The tax burden is going to be shifted from the upper to the middle and lower class. The Republicans can spin this anyway they want (embedded tax, blah, blah, blah), but at the end of the day, the rich get another tax break and everyone else gets screwed. It looks like Bush is reluctant to try the national sales tax, but he is still looking at eliminating taxes on investments. This will mean you will not be able to deduct your state income tax paid, Social Security would have increased taxes, and the incentive for employers to pay part of your health insurance would be eliminated. Is the tax code complicated? Yes, but would you rather spend an extra hour or two figuring out your taxes or pay an extra thousand or two in taxes.

Bush's Tax Overhaul May Be Incremental

(Link to Full Story)

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - President Bush's campaign to make the tax code simpler, fairer and more pro-growth is likely to involve incremental changes to the current system rather than a sweeping effort to scrap the venerable income tax for a radically new approach, such as a national sales tax.

But the changes Bush will propose are still expected to generate huge opposition, especially if he suggests scrapping favored tax breaks such as the deduction for state income tax payments.

Tax experts in close contact with the administration say signs are pointing toward a plan that will seek to improve the income tax code, rather than replace it with a single-rate flat tax with no deductions, a national sales tax or Value Added Tax, all ideas that gained prominence among conservative Republicans in the 1990s...

While retaining the current income tax system, this option would eliminate the Alternative Minimum Tax, which was designed to make sure the rich paid their fair share of taxes but is now ensnaring more middle-income taxpayers. The proposal also would significantly expand opportunities for people to set up savings accounts where their investment earnings would be tax-free, something the administration has been pushing for two years.

Eliminating the AMT, which covered 3 million mostly wealthy taxpayers in 2004 but will raise the taxes of 23 million taxpayers by 2008, would cost the government an estimated $600 billion over 10 years.

To pay for that and the more generous savings accounts, the "least radical" proposal would eliminate the itemized deduction for state and local income taxes, while imposing a tax on Social Security (news - web sites) benefits and employer-provided health care benefits.