Interesting Times

[MaxPC]

Republicans in the House of Representatives will vote on a bill that would abolish the Internal Revenue Service (IRS), eliminate the national income tax, and replace it with a national consumption tax.

Specifically, the bill gets rid of the national personal and corporate income taxes and abolishes the IRS — which is slated to hire 87,000 new agents unless congressional Republicans can stop it — as well as implements a national sales tax.

Additionally, the bill gets rid of the death, gift, and payroll taxes, and would replace the current tax code with a national consumption tax.

[Josh]

I have to say, the prospect of a VAT is much worse in my opinion than an income tax.

[MaxPC]

I have to say, the prospect of a VAT is much worse in my opinion than an income tax.

I would hazard that it is more the prospect of change that is most alarming. As much as we may dislike a situation, the thought of coping with an entirely new landscape in any area of life can be a cause for anxiety.

In this case, what would all those tax attorneys do if this happens?
Will the unemployed IRS agents need to retrain for a new job with the government? Or will they have to become greeters at Walmart like so many unemployed have had to do?
What will happen to the tax preparation service agencies?
Will someone write a new cash register program to simply calculate the tax for payment when one checks out?
Will medical services and prescriptions be taxed as well?

[ohio jones]

I have to say, the prospect of a VAT is much worse in my opinion than an income tax.

I would love it! I have a decent income and consume very little.

But it would hit the working poor especially hard, since they pay no (or very little) income tax now and spend most of their earnings on things that would increase in price. It's essentially shifting the tax burden in a regressive way.

Chances of anything like this passing are essentially zero, but introducing a bill with no chance of life does provide some photo ops and headline fodder.

[Ken]

I think this is the bill they are talking about. I guess fiscal responsibility is out the window here on Day #2 of the new House of Representatives: https://thehill.com/homenews/house/3805 ... o-deficit/

CBO: GOP’s IRS bill will add $114B to deficit

The Republican proposal to eliminate billions of dollars in IRS funding will pile more than $100 billion onto federal deficits, according to a new estimate from Congress’s official budget scorekeeper.

The bill, which is slated to hit the House floor Monday night as the first legislative act of the new GOP majority, would claw back most of the almost $80 billion in new IRS funding provided under the Democrats’ massive climate, health and tax package, which was signed by President Biden last year.

Almost $46 billion of that spending would go toward agency enforcement efforts designed to prevent certain taxpayers — largely corporations and wealthy individuals — from paying less than they owe.

The Congressional Budget Office (CBO) estimated Monday that the legislation would cut federal spending by $71 billion, but would reduce tax revenue to the tune of almost $186 billion. The net effect would be a $114 billion increase in deficits over the next decade.

The numbers were not overlooked by Democrats, who wasted no time hammering Republicans for vowing to rein in deficit spending, then defying that promise in their first act of business.

“It’s a giant tax cut for rich tax cheats,” White House chief of staff Ron Klain tweeted on Monday. “Bill #1 from the new House GOP. Adds to the deficit.”

Republicans had made the IRS funding cut a top promise on the midterm campaign trail, warning that the money would lead to the hiring of 87,000 new tax collectors to target middle-income Americans. Some Republicans said those agents would be armed.

Those claims were highly misleading, however, as much of the funding will go to hire thousands of customer service agents and other employees with no auditing responsibilities. And the 87,000 figure is a reference to the total number of employees — not just auditors — the IRS hopes to hire over the next decade, when 52,000 workers are expected to retire.

[barnhart]

I don't see this going too far. The existing tax code is the result of many, many, many powerful special interests who have lobbied and paid for it. It won't evaporate without a fight.

[Josh]

… so spending $41 billion less on the IRS adds to the deficit?

How about letting hard-working Americans just keep the money they earn from their yard sales, instead of hiring IRS agents to go harass them?

[Ken]

… so spending $41 billion less on the IRS adds to the deficit?

How about letting hard-working Americans just keep the money they earn from their yard sales, instead of hiring IRS agents to go harass them?

I know Josh. Math is hard. Do try to keep up.

[MaxPC]

… so spending $41 billion less on the IRS adds to the deficit?

How about letting hard-working Americans just keep the money they earn from their yard sales, instead of hiring IRS agents to go harass them?

I know Josh. Math is hard. Do try to keep up.

Ken, that was uncalled for. Sarcasm is the last resort of those who are unable to discuss a topic in a charitable and intelligent manner. If you cannot participate without such hostility, then leave the thread.

I have to say, the prospect of a VAT is much worse in my opinion than an income tax.

I would love it! I have a decent income and consume very little.

But it would hit the working poor especially hard, since they pay no (or very little) income tax now and spend most of their earnings on things that would increase in price. It's essentially shifting the tax burden in a regressive way.

I would hazard a guess that there would be some sort of exemption for those who currently receive assistance in food stamps, etc.

[Ken]

… so spending $41 billion less on the IRS adds to the deficit?

How about letting hard-working Americans just keep the money they earn from their yard sales, instead of hiring IRS agents to go harass them?

I know Josh. Math is hard. Do try to keep up.

Ken, that was uncalled for. Sarcasm is the last resort of those who are unable to discuss a topic in a charitable and intelligent manner. If you cannot participate without such hostility, then leave the thread.

Josh was being deliberately obtuse. He read the article and knows exactly where the numbers come from and how they are calculated. He wasn't trying to make any useful contribution to the discussion. He also knows full well that the IRS isn't hiring agents to go harass people holding yard sales.