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Old October 16th, 2017, 07:12 AM   #1
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From: Cliffside Park, NJ
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FICA is our most regressive tax.

FICA is our most regressive federal tax.

The FICA tax is only levied upon employment derived incomes, (i.e. wages). All wages are incomes, but all incomes are not wages.

Statistically, the legal, (i.e. on the books) wages of the working-poor are effectively their entire earned incomes. The proportions of individual's other (than wage) incomes increase as their adjusted gross incomes increase.

The first $127,200 of employees annual wages are subject to 7.65% tax, the remainder are subject to only 1.45% FICA tax. FICA and SECA are our most regressive federal taxes.

An effective general sales tax of 4.55% could more than replace the revenue loss of reducing the 15.3% of payroll based taxes shared by employees and employers to 6.2%.

That would increase tax revenue for funding Social Security and medicare, purchasing powers of employees and their dependents.
The reduction of enterprise's net taxes would reduce USA products price disadvantages to foreign products within and beyond our borders. The price comparison improvement to foreign goods would exceed that of an effectively similar reduction of USA's corporate tax rates.

Taxes ONLY levied upon wages and payrolls should not fund Medicare and they should not fund more than half of Social Security retirement benefits. These programs reduce incidences and extents of poverty. Their net economic and social benefits to our nation should be supported by all rather than only employees and employers.
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Old October 16th, 2017, 05:28 PM   #2
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'
A case for sales taxes, value-added taxes, etc. could be made if everybody spent their entire income every year.

However, the rich do not spend or dispose of their entire incomes; they sequester their capital in various ways which do not increase the velocity of money, and so do not encourage economic activity.

In Aldous Huxley's futuristic satire Brave New World, people were forced or encouraged by brainwashing and conditioning to spend their incomes in ways that maximized economic activity.

Perhaps, at least for the rich, Huxley's satiric proposal should be made a serious reality.
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Old October 16th, 2017, 09:00 PM   #3
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Quote:
Originally Posted by numan View Post
'
A case for sales taxes, value-added taxes, etc. could be made if everybody spent their entire income every year. ...
Quote:
Originally Posted by Supposn View Post
Sales taxes are not particularly regressive; they're not progressive. ...
... The expenditures of the wealthy that would not be subject to a general sales tax, are currently items that generally now reduce their taxable incomes. Proportional to their individual revenues, their expenditures that would be subject to a general sales tax are no less, and I suspect exceed the proportions of their revenues subject to our current federal individuals' income taxes.

But for those that do not pay income taxes, a general sales tax would be a regressive tax.

I'm a proponent for replacing a significant proportion of taxes levied only upon wages and payrolls, and replacing those revenues with a general sales tax. FICA is the most regressive of federal taxes.
Its effect is most severe upon the wages of the poor and is of no consequence to individuals' incomes other than wages. ...
... Respectfully, Supposn
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Old October 17th, 2017, 06:55 AM   #4
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'
A case for sales taxes, value-added taxes, etc. could be made if everybody spent their entire income every year. ...
Numan, time or duration of time is consequential for taxes such as progressive tax rates. Progressive tax rates are effected by the moments of, or the duration between the moments of activities subject to the tax.

Time is not of consequence if the regulations governing the tax have no consideration for the time in question; not even for a flat rated tax upon net incomes.

Respectfully, Supposn
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Sales taxes are less regressive than flat rated income taxes. Supposn Economics 4 October 16th, 2017 07:23 AM
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