Republican’s destination based cash flow tax?

Aug 7, 2010
211
40
Cliffside Park, NJ
#1
Destination based cash flow tax, (DBCFT):

This explanation published by the Christian Science Monitor, (a reputable newspaper), is inadequate. Can any of the forum’s members provide a link to a superior explanation of DBCFT?

Excerpted from
Here is the scoop on corporate tax reform proposals from House Republicans - CSMonitor.com

“(2) The DBCFT is essentially a value-added tax (VAT), but with a deduction for wages. Every advanced country except the U.S. has a VAT alongside a corporate income tax. The U.S. would in effect be replacing the corporate income tax with a modified VAT. A VAT taxes consumption, not income – it has the same effects as a national retail sales tax, but works better administratively”.

Double dipping? Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if corporate income taxes are repealed)?

How would the USA enforce a tax upon money paid to recipients beyond our borders? Isn’t that particularly difficult when the money is passed among globally operating single enterprises, or enterprises associated with each other such as subsidiary enterprises or otherwise independent enterprises that are associated by innumerable manners of other agreements?

What I’ve read thus far implies a proposal that’s only applicable to USA’s international transactions; I consider that to be less rather than more feasible than USA adopting a general value added tax, (i.e. VAT).

Respectfully, Supposn
 
Oct 25, 2012
3,775
614
Louisville, Ky
#2
Destination based cash flow tax, (DBCFT):

This explanation published by the Christian Science Monitor, (a reputable newspaper), is inadequate. Can any of the forum’s members provide a link to a superior explanation of DBCFT?

Excerpted from
Here is the scoop on corporate tax reform proposals from House Republicans - CSMonitor.com

“(2) The DBCFT is essentially a value-added tax (VAT), but with a deduction for wages. Every advanced country except the U.S. has a VAT alongside a corporate income tax. The U.S. would in effect be replacing the corporate income tax with a modified VAT. A VAT taxes consumption, not income – it has the same effects as a national retail sales tax, but works better administratively”.

Double dipping? Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if corporate income taxes are repealed)?

How would the USA enforce a tax upon money paid to recipients beyond our borders? Isn’t that particularly difficult when the money is passed among globally operating single enterprises, or enterprises associated with each other such as subsidiary enterprises or otherwise independent enterprises that are associated by innumerable manners of other agreements?

What I’ve read thus far implies a proposal that’s only applicable to USA’s international transactions; I consider that to be less rather than more feasible than USA adopting a general value added tax, (i.e. VAT).

Respectfully, Supposn
It's a modified origin state where state, county and city taxes are based on the origin, but district taxes are based on the destination (the buyer). ... In destination-based states, the correct sales tax rate is based on where the buyer is located (the destination of the sale).
The House GOP?s Destination-Based Cash Flow Tax, Explained | Tax Foundation
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#3
It's a modified origin state where state, county and city taxes are based on the origin, but district taxes are based on the destination (the buyer). ... In destination-based states, the correct sales tax rate is based on where the buyer is located (the destination of the sale).
The House GOP?s Destination-Based Cash Flow Tax, Explained | Tax Foundation
Tecoyah, that’s what I first suspected; BUT the link discusses CASH FLOW TAX WITH NO REFERENCES TO: tariffs, duties. or assessing the values of goods.
How do you effectively monitor cash flow without regard to both cash and goods passing through borders? All currency smuggled out of the country returns as laundered money that need not be explained and cannot be taxed?

Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if this DBCFT is to replace corporate income taxes)?

Respectfully, Supposn
 
Oct 25, 2012
3,775
614
Louisville, Ky
#4
Tecoyah, that’s what I first suspected; BUT the link discusses CASH FLOW TAX WITH NO REFERENCES TO: tariffs, duties. or assessing the values of goods.
How do you effectively monitor cash flow without regard to both cash and goods passing through borders? All currency smuggled out of the country returns as laundered money that need not be explained and cannot be taxed?

Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if this DBCFT is to replace corporate income taxes)?

Respectfully, Supposn
From what I understand this concept is entirely domestic and by the looks of it from my limited understanding of domestic state economics is virtually impossible to enforce or institute. Likely there is a reason this pipe dream has not been news in economic circles.
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#5
From what I understand this concept is entirely domestic and by the looks of it from my limited understanding of domestic state economics is virtually impossible to enforce or institute. Likely there is a reason this pipe dream has not been news in economic circles.
Tecoyah, regarding DBCFT, the Christian Science Monitor’s and all other sites were not in disagreement with each other. They all definitely referred to the proposal as being applicable to international with no particular mention of domestic transactions.

I don’t believe but I’m not certain if it was only the Monitor’s site that mentioned the proposal would replace the federal corporate (income) taxes but I’m certain I never read any explicit mention of the proposal being absolutely not applicable to domestic transactions.

All the sites I’ve seen and those I thoroughly read were not explicitly clear.

Respectfully, Supposn
 
Aug 7, 2010
211
40
Cliffside Park, NJ
#6
They should just go with a national sales tax, and do away w/income tax. That way the rich pay lots of tax, as they buy lots of expensive stuff, and the poor pay relatively very little as they don't buy all that much. It would be a FAIR tax.
Aufgeblassen, excerpted from:
http://politicalfray.com/economics/4942-can-fair-tax-ever-passed-enacted.html .
… “It would be financially imprudent and politically less feasible and may be impossible to pass a bill transferring our entire federal taxes upon net incomes to a sales tax in a single step. … Increase the provisions to compensate low income purchasers for the increased sales taxes.
I expect that after one of the incremental steps, we’d have a federal sales tax approaching an unacceptable tax rate; but if I’m wrong, federal income taxes could be entirely eliminated”.
[Notes:
Provisions to compensate low income purchasers are for the unemployed poor and their dependents that currently do not pay income taxes.
By “federal income taxes” I meant ALL federal, (e.g. individual, corporate, FICA, self-employment) taxes based upon incomes].

Respectfully, Supposn
 
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