Would you recommend a flat tax or national sales tax? Please explain the advantages and disadvantages?

Well, if my only two options are flat tax or national sales tax, I would go for national sales tax.

A flat tax is not fair to low income families. Although 5% of one's salary sounds equal, its not when 5% of my salary leaves me living in poverty while 5% of someone else's salary still leaves them a millionare.

My logic behind supporting a national sales tax is that people spend money based on their income. Obviously a person making only $20K per year will make significatly fewer purchases than someone making $100K per year.

So therefore I am only taxed on how much money I spend, as opposed to simply having a portion of my salary taken from me.

Benefits by taxing consumption rather than income (the FairTax bill HR 25 / S 25 currently before Congress in Committee):

FOR INDIVIDUALS:

* No more tax on income - make as much as you wish.
* You receive your full paycheck - no more deductions.
* You pay the tax when you buy "at retail" - not "used."
* No more double taxation (e.g. like on current Capital Gains).
* Reduction of "pre-FairTaxed" retail prices by 20%-30%.
* Adding back 29.9% FairTax maintains current price levels.
* FairTax would constitute 23% portion of new prices.
* Every household receives a monthly check, or "pre-bate."
* Pre-bate equals payback for taxes on spending to poverty level.
* FairTax's pre-bate ensures progressivity, poverty protection.
* Finally, citizens are knowledgeable of what their tax IS.
* Elimination of "parasitic" Income Tax industry.
* NO MORE IRS. NO MORE FILING OF TAX RETURNS by individuals.
* Those possessing illicit forms of income will ALSO pay the FairTax.
* Households have more disposable income to purchase goods.
* Savings is bolstered with reduction of interest rates.

FOR BUSINESSES:

* Corporate income and payroll taxes revoked under FairTax.
* Business compensated for collecting tax at "cash register."
* No more tax-related lawyers, lobbyists on company payrolls.
* No more embedded (hidden) income/payroll taxes in prices.
* Reduced costs. Competition - not tax policy - drives prices.
* Off-shore "tax haven" headquarters can now return to U.S.
* No more "favors" from politicians at expense of taxpayers.
* Resources go to R&D and study of competition - not taxes.
* Marketplace distortions eliminated for fair competition.
* US exports increase their share of foreign markets.

FOR THE COUNTRY:

* 7% - 13% economic growth projected in the first year of the FairTax.
* Jobs return to the U.S.
* Foreign corporations "set up shop" in the U.S.
* Tax system trends are corrected to "enlarge the pie."
* Larger economic "pie, " means thinner tax rate "slices."
* Initial 23% portion of price is pressured downward as "pie" increases.
* No more "closed door" tax deals by politicians and business.
* FairTax sets new global standard. Other countries will follow.

A minor downside is that used goods will become somewhat more expensive because of increased interest and demand - at least in the short term.

National 10% flat tax combined with a national 5% sales tax. That would cover just about everyone fairly. Even illegals.

i have lived in 2 countries that both use flat tax... sure, the cost of living goes up slightly, but at the end of the day, the money you earn is yours and the government does not get to pry in to our lives and know exactly what we are doing... also, no IRS, need i say more...

Sure, it would be the ultimate Fair Tax. You control how much tax you pay by what you Purchase. One problem with the USA economy, it may stifle Consumerism, the dominant driving force of the US economy. (Incents savings, disincents consumption.)

Both taxes have got their advantages. If you take Economics, you'll know what I mean. A flat tax is a direct tax and therefore will not cause inflationary pressure. However burden of the tax cannot be shifted. A national sales tax is an indirect tax and will thus cause inflationary pressure. But it's burden can be shifted to other consumers. Yup. They've all got their own merits and dismerits. It all depends on the type of policies the country is pursuing.

i think no one should pay more than 5% taxes no matter what income level a person is. the government does not earn our money, we do. all entitlements should go........except for mentally disabled or physically disabled people.....everyone else should work...i work, my husband works and our daughter does odds and ends to earn money and she is only 11...

No. Both taxes are regressive and actually are higher taxes for persons of lower income. Since the are a flat rate (everyone pays the same rate) when compared to the actual total spendable income of a person the make up a greater portion of a person of modest or lower income that that of the higher income. The only advantage of these taxes are to the people of higher income because they make the poor and middle income people believe everyone is being treated fairly and equally when they are not and the concept of progressive taxation (taxation based on total ability to pay at graduated levels) can be done away with.

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