One may fervently hope.

wow.

This is not on topic but I'm not an American so I thought I'd ask- what are the implications of making Condoleeza Rice VP and shifting Cheney to the CIA? Would this really pose a problem with the republican's extreme jacksonian base, the good 'ol boys, 'rednecks' etc? I'm not saying the Republican party is racist I'm just saying there is still a minority in the US who are unreconstructed old-school redneck types with all the baggage that entails, and they don't vote democrate.

A bush/condi combo would be awesome, and might be a stroke of political genius. Have they the courage to do it though, in such a close election with so much at stake? I'm just trying to get a feel if it's actually possible or likely.

George Bush is too loyal to throw Cheney overboard. Plus, it would be spun by the Press/Dems as an admission that Cheney was a drag on the ticket. Unless Cheney decides to withdraw medically, he'll be on the ticket. Condi Rice as Veep would acceptable to all wings of the GOP. Ever since I heard her 2000 convention speech, I've been a fan.

To get back on topic, eliminating the IRS/income tax is something that cuts across party lines. The trick to getting the congressional moderates onboard is to pitch it as revenue neutral.

The issue here is that by simply proposing this and pushing it a bit the GOP can reenforce (regain?) its image as anti-tax and anti-big government. What are the Dems going to do - argue for the IRS and the existing tax system? Gotta think if handled properly it would be big winner for the GOP.

I am not sure I get it. Replace the income tax with a VAT. Fine, but you will still need a governmnment agency to collect it.

Wow, August 1 and the Administration starts to awaken? Who could have predicted?

JC Watts would be a better choice than Condi. He's won elections. She hasn't.

Amos: I don't know where you get the preception that Democrats are less bigoted than Republicans, but take a look at which administrations have put blacks in high level, powerful positions and which have not.

That's very European of Dennis.

Sure, you still need a government agency to collect it. But that agency can be much, much smaller than the IRS because: it would use businesses as collection agents; returns are vastly simpler, probably consisting of 3 to 5 lines; and auditing businesses is generally easier than auditing individuals.

And, thousands and thousands of individuals would leave government work, and the leech-like professions of accounting and law and (too good to be true?) become productive citizens.

I assume the plan is to replace income taxes with some sort of a national sales tax, or a VAT.

If so, I sure hope the proposal includes a constitutional amendment to repeal the 16th Amendment (the Income Tax).

Otherwise someday we're gonna have both kinds of taxes whenever the socialists gain power again.

Sales tax computations can be as complex and interpretation-rich as the current internal revenue code. As an example, Iowa exempts food from sales tax while prepared meals are taxed. This leads to odd situations where a cold sandwich is sold untaxed, but if the customer heats it in a microwave in the store, it's taxable.

This may eliminate personal tax returns but will vastly expand business compliance costs.

I must agree-- a VAT or national sales tax just outsources the collection of taxes from the IRS to every business in the country. We are still going to need a Federal Tax Collection Service to audit the books of every one of those businesses to see that they comply. And there will be pressure to exempt transactions based on how it affects "the poor"-- stuff like food, cable TV service, clothing, medicine, etc. And with "services" a large part of the economy, expect an attempt to extend any sales tax into getting a slice of that, too.

The solution is to realize that this is a fight that will never be won, by some simple method. It just might be best to scrap the current IRS code and start over with a simple flat rate.Then accept that Congress will , of course, immediately begin to tinker with exemptions and incentives. So there needs to be included a way to sunset those and start over again every decade or so. Instead of allowing the changers to do their dirty work once and be done with it, make them the ones who have to get their exemptions passed every session.

The biggest objection to a VAT is the invisible nature of it. It's easy for a government to gradually crank it up, so that it looks like inflation to the citizenry.

VATs have the advantage of encouraging savings. Raoul is right, certain things, indispensible to the poor in this country, would have to be exempt, such as fast food, cable, cell phones and any and all things necessary to raise a brood of out-of-wedlock children.

"This will...vastly expand business compliance costs."

Not necessarily so. The complications of the current sales tax system largely arise from the fact that there are 43 different sales tax bases (or however many states have a sales tax), and even if the bases are essentially similar in two states de jure, they are most likely not similar de facto. A national sales tax would have, obviously, a consistent base everywhere, and would be much easier for businesses to comply with (although if state structures are allowed to stand, there would be complications).

People who are attracted to VAT should ponder the hotel taxes around the country.

The idea is to make it high, because outsiders pay it.

Guess what?

Everybody pays it at high rates.

Consumption taxes by their very nature are self-regulating and fairly immune to political grandstanding. Aside from its arbitrary nature, the tax on "income" hinders capital formation thus relieving, in many cases, the "wealthy", or established businessman from much potential competition. The very defintion of "income" is elastic and is defined by no one other than an evolving tax code and the IRS. Law should be definite and simple in its operation. The tax code, in combination with our entitlement culture, is a huge drag on our economy since it is almost beyond the ability of the individual in a difficult situation to plan around without outside, professional and costly assistance.

The power of the IRS and it's administrative courts are the most un-American things I have ever come across. The very idea that a conflict with a federal agency with the power of finacial life or death over it's citizens classifies as a civil matter where the "rights" of the agency over ride the rights of a private citizen is a grotesque deformation of American constitutionalism.

Since "income" and its ever changing defintion is what is now taxed, the only people who have anything to fear from a consumption tax are those with inherited wealth or have the ability to live on municipal coupon clippings. Those who are trying to accumulate capital for business and job creation will have a smoother playing field than ever before since their savings and investments will be taxed only once. As for the hotel tax, there is no compulsion involved. The benefit of paying such a tax must outweigh the cost or, (guess what?) the hotels would be empty and the commerce of places like NYC and Boston would come to a grinding halt. Can't get any more self-regulating than that.

The open-ended and absolute power lodged in the federal government to define "income' and to tax it however it pleases has been the main force behind all of the failed experiments in social engineering that the people of the US have been forced to endure over the past 60 years or so. Without the tax on "income" there would have been no "Great Society" nor any of the other attempts at "distributive justice" and "economic democracy" which have accomplished nothing of lasting value.

Sigh.

Here in Hawaii, we have a general excise tax that is a VAT.

Nominally 4%, but the economists argue whether pyramiding makes it in reality equivalent to a tax of 12% or 16%.

Who knows?

Seems great to the voters because the tourists pay it.

Except, so do the voters.

GET is usually offered as one of the great retardants of Hawaii's economy.

You can take that however you like. Hawaii has the most productive economy in the Pacific.

Or, we pay close to $8/gal for 10-day-old milk from California. It's called 'paradise tax.'

Harry:

Do they bring the milk in by barge? Seems like an opportunity for someone who wants to paint a 737 like a giant cow and put it to work.

"Here in Hawaii..". If you don't like it, move.

I didn't say I didn't like it.

I'm just pointing out that your panaceas have real costs.

jim, they do bring milk in by barge.

Volumes are not sufficient to justify a 737 for it. It gets complicated, but one thing about living in a modern but remote place -- you learn that Adam Smith didn't understand how business works. Nothing works the way the neoclassical economists say it does.

I doubt if 17th and 18th century economists living in Great Britian had much of an idea about a 'tourist' economy. But people in Hawaii don't make anti-thetical economic choices, do they?

For example, aren't the agricultural oligarchies (i.e., pineapples) in Hawaii pretty much the same as those in LA (sugar cane) and in the Central Valley (vegetables in CA)? And the 'laws' concerning real estate seem to work the same in Maui as they do in Vail, eh?

Greed probably has a little more unchecked oopmh in a restricted place, but that should be expected.

Sugar is an entirely tax-driven commodity and tells us nothing about how neoclassical economics works. It's a great example, though, for you free traders, except that the lessons it teaches are different from the ones yhou wnat to learn.

Do people make antithetical economic choices in Hawaii? All the time. You'd be amazed by our water system.

The very idea of things like "distributive justice" or "economic democracy" or the "Great Society", all engineered from Washington, D.C., of course, are the only politically motivated "panaceas" I am aware of. I have never believed that utopian solutions were worth a plugged nickel. The tax on "income", with its rather fluid definition has alweays been seen as the means to achieving such ends. If we all admit that it has inherent flaws, the most obvious being it's cost to "privacy", which only seems to be any value to abortionists, homosexuals and pornographers, we might be getting somewhere.