Federal Government Policy Issues

A National Sales Tax (NST) would unfairly impact savers in that savers have already paid income tax on the money that they earned that was put into their savings accounts. The money would be taxed again when they spent these savings on personal consumption. Given that much of the money in savings accounts is held by senior citizens, it can be expected that they will lobby strongly against a NSA and, historically, this group has been very effective in pursuading their representatives to support their policies.
 

The Cato Institute estimates that a National Sales Tax rate of 15% would be required to in order to be revenue neutral. This rate of 15% assumes that no purchases including housing are exempted but does include a full rebate of sales tax paid for all income up to the poverty level. Keep in mind that most families at these lower income levels do not pay any federal income tax. They expect the rate to drop to 12% as the national Sales Tax stimulates economic activity.

See http://www.cato.org/pubs/pas/pa-272.html for the full text of the CATO study

For 2003, the IRS reports total income tax due of $790b. According to the US Department of Commerce, Bureau of Economic Analysis, total personal consumption in 2003 was $7.71t and total consumption by the federal, state and local governments was $2.09t for total 2003 consumption of $9.8t. Therefor, for 2003, if a national Sales Tax was to have generated the same amount of revenues as the personal income tax with absolutely no exemptions. a rate of 8.06% would have been required in addition to the then current state and local sales tax rates. In as much as taxing the purchases of government would increase the cost and therefor the revenue required by government, a more accurate National Sales Tax rate of 10.25% would be required with the purchases of all levels of government exempted.

The reality is that there would almost certainly be large categories of personal expenditures exempted from the National Sales Tax and/or credits for lower income families.
 

Generally, a NST without low earner rebates would be highly regressive in that low earner families would pay a much higher tax rate than they do now and would pay a much higher percentage of their total income in taxes than would high earner families.

It is difficult to see how a change to a National Sales Tax (NST) from the IRS personal income tax could stimulate the economy. Low earner families spend a very high percentage of their total income on consumption as they usually can not afford to contribute to savings and retirement accounts. Therefor, a change to the NST could be expected to significantly reduce personal consumption expenditures at the lower income levels. High income families generally save a large percentage of their income so a reduction in tax rates for high earner families would not result in increased personal consumption expenditures by them sufficient to offset the decline in low income family consumption.
 

hollister, ghd hair, ray ban, p90x workout, hollister clothing, instyler, asics running shoes, herve leger, lancel, babyliss, louboutin, mont blanc pens, longchamp uk, new balance shoes, valentino shoes, baseball bats, converse, hollister, soccer jerseys, soccer shoes, nike air max, chi flat iron, insanity workout, bottega veneta, reebok outlet, ferragamo shoes, abercrombie and fitch, north face outlet, nike air max, converse outlet, celine handbags, timberland boots, iphone cases, beats by dre, north face outlet, wedding dresses, vans outlet, mac cosmetics, lululemon, mcm handbags, oakley, gucci, nike roshe run, ralph lauren, nike huaraches, nike trainers uk, hermes belt, jimmy choo outlet, vans, nfl jerseys
 

replica watches, canada goose, coach outlet, toms shoes, montre pas cher, ugg uk, pandora jewelry, moncler, thomas sabo, louis vuitton, karen millen uk, swarovski, pandora jewelry, juicy couture outlet, links of london, ugg,uggs,uggs canada, ugg pas cher, canada goose outlet, ugg,ugg australia,ugg italia, marc jacobs, canada goose, doudoune moncler, ugg, moncler, louis vuitton, canada goose, louis vuitton, canada goose outlet, moncler outlet, moncler uk, canada goose uk, hollister, juicy couture outlet, moncler, pandora uk, pandora charms, moncler outlet, louis vuitton, wedding dresses, louis vuitton, canada goose jackets, moncler, swarovski crystal, canada goose outlet, supra shoes