Romney: Why tax cut is a bad deal

1: The flat tax would be applied to ALL income, regardless of source (with a few exceptions, such as inheritance of a family farm and things like that). It would also apply to all American citizens, regardless of where they choose to live. Foreign investments: if you own them, if you are an American citizen, and if they increased in value over the tax year, the increased value is taxed. Period. The only recourse for the uber rich to avoid paying taxes would be to move out and renounce their citizenship.

2: A business already balances revenues with respect to expenses, and claims the difference as profit, which is taxable. Taxing their expenses (which is what a sales tax would do) simply increases their expenses, which is then passed on to the consumer, resulting once again in the consumer - most of whom are middle class - paying the business's taxes anyway. Except they'd be paying a lot more than they pay now. The typical business has around 15% profit margin. So they pay taxes on 15% of their total revenues (which they also pass on to the consumer). A sales tax would have them paying taxes on 85% of their revenues. Not profits mind you, which is income, but revenues - total sales. This would result is an increase of around 13% in consumer prices, just to offset the increased costs of production from a 15% sales tax. Add to that the 15% sales tax paid directly by the consumer and you get a net 28% increase in the cost of consumer goods across the board. I highly doubt that would do much good for our economy.

(Frankly I think we should simply stop taxing the income of businesses altogether, since the costs are ultimately paid by the consumer anyway. Concentrate on taxing personal income. Businesses should be limited to fees directly attributable to the cost of their use of public facilities - which is still passed on to the consumer, but far lower rates than the consumer currently pays for.)

3: WTF is with this concern over taxing ILLEGAL transactions? Of all the ideas, the idea of a desire to tax illegally derived income has to be the farthest out from reality I have ever seen. First, get rid of most drug laws (they almost invariably cause more harm than good anyway), and that'll put dealers' income in the legitimate realm where it can be taxed normally.

4: No matter what tax laws are written, there will be ways around it that some people will use to avoid paying. I know a guy in CA, where sales taxes are high, who never buys new if he can avoid it. He buys used from the private market. He reads classified ads almost religiously, and is an avid eBayer. He buys his computers used, used cars (from individuals, not dealers), used TVs, refrigerators, etc. etc. etc. Claims he saves a couple thousand in sales taxes every year doing that.

How many road-side produce stands do you think claim every cent of produce they sell? And then there are the black markets on things like tobacco products, to avoid the punitive taxes placed on them. Some people will always cheat on their taxes - even sales taxes.

Bottom line is a national sales tax will do far more harm than good, will (as usual) hit middle income brackets hardest, and will have a devastating effect of business and consumer prices.

I agree with you on the corporate side. I would eliminate it as well. The whole concept of 'taxing the evilz corporations' is ridiculous. As you stated, it is just another way to tax consumers in a very hidden way.

If you tax salary, dividends and capital gains, the money will end up taxed.
 
"Sooner or later the bubble had to pop.

Mitt Romney has had a pretty swell time of it in 2010. The former presidential contender has been ambidextrous in his political maneuvers, carefully challenging President Obama on key economic issues that play to his own strengths as a pragmatic technocrat. The success generated by his book No Apology earlier this year seemed to verify his place as the GOP’s resident wonk. The book even won praise from detractors as a thoughtful policy manifesto. As Republicans rode a wave of voter dissatisfaction towards taking back the House, Romney faithfully played the role of good soldier, being generous in word and wealth to GOP candidates all over the map who enlisted his help, all the while building a collection of chits likely to come in handy for what is an all but sure presidential run in 2012.

But for all the political success Romney had in 2010, it’s clear that heading into 2011 he still has not persuaded conservatives that he is heartfelt and sincere in championing their cause.

Take, for instance, the simmering debate over the Bush tax cuts. Romney’s last-minute op-ed in the pages of USA Today announcing his opposition to the compromise reached by Obama and congressional Republicans triggered a familiar line of attacks from his GOP brethren and the conservative commentariat. Some scolded him for doing what was politically expedient, others dismissed his high-profile denunciation as nothing more than an opportunistic play for some Tea Party love.

All things considered, it seemed the smart political calculus. Previous support of policies like TARP and the potent charge that his Massachusetts healthcare program served as the template for Obama’s signature legislative achievement has left Romney in a defensive posture when trying to tout his conservative credentials to the grassroots of the GOP. And being too ideologically close with the president on another critical issue could have proven fatal down the road, prompting conservatives to turn their backs on him for good.

Still, the tax-cut fiasco reminded many conservatives of what they didn’t like about Romney to begin with: he’s all pander and no principle. Worse yet, even when he tows the ultra-conservative line, he still manages to get accused by those he’s trying to please of being calculating and slick. It’s a level of distrust with conservatives that no other candidate faces.

As the GOP frets over what the Tea Party effect will be on their traditionally orderly nomination process, it’s easy to imagine some alarm bells going off in Romney World. If the GOP primary electorate is destined to be more conservative next time around, and if recent polls are accurate, then it’s fair to say that conservatives in general aren’t the least bit thrilled about, or for that matter very open to, the prospect of him carrying their banner.

Romney’s chief political challenge over the next year will be to find a plausible path that reconciles his strained relations with conservatives and convinces them once and for all that he is a true believer in the things they hold most dear. He has impressed most moderates and independents with his business background and past experience as a problem-solving GOP governor in a deep-blue state. Unfortunately for him, the GOP nomination won’t be decided by centrist voters; rather, it will be decided by rock-ribbed conservatives who are itching for an ideological war with Obama on the national stage.

How the former governor woos over conservative skeptics is still an open question. The temptation to take hyper-partisan positions during the primary season will be difficult to resist, particularly if it’s a successful recipe that helps other candidates move upward in the polls. But he will have to fight the urge. Passing himself off as the model conservative didn’t sell well in 2008 and it isn’t likely to fare any better in a 2012 market heavily populated by Tea Party types.

If Romney is still unsettled on a New Year’s resolution, here’s a suggestion: hope that conservatives warm up to you more in 2011 than they did in 2010."


http://dailycaller.com/2010/12/28/conservative-doubts-still-haunt-romney/#ixzz19WVXXjQ8
 
If the economy grows then revenue can be increases. Tax cuts can increase revenue only if taxes are all ready to high. Tax cuts are all ways good for the economy but not all ways good for the budget. If most taxes were elminated right now it would help the economy a lot but it would end lots of social programs because revenue would increase. If the federal government drastically cut taxes retirement, enviornment, welfare, manufacturing, health care, education would all become state issues. You can't have a federal government which solves everyone's problems with out high taxes. At a certain tax rate you can massimize revenue. You don't want taxes to be to high or to low because that decreases revenue. Everyone knows that taxes are bad for the economy but what is done with taxes can be good for the economy like infrastructuree and scientific research.
 
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