would the flat tax be good for your business?

It’s politics time and the “flat tax” is being floated again. Basically its a 17% sales tax on all goods and services sold.

What say you tt’ers

pt

The Fair Tax is the one that I’m familiar with. It’s projected to be 23%. I don’t think it would be good for my business because it would be a sizable tax increase for my average customer. I think it would be good for the country, but I’ll leave that discussion for forums that are more politically oriented.

I have yet to see any tax increase business.

The current tax system is a flat tax. It is very possible a consumption tax plan such as the “Fair Tax” could be an ultimate good thing. Any tax plan will take lots of education by consumers as well as business owners. Start learning more now about any ‘significant’ proposed tax plans.

Its always been my understanding the “flat tax” is a single income tax rate for everyone regardless of how much you make, the color of your skin or if you work for the government or not. Usually this is associated with a hard cap and minimum threshold.

The other tax proposal talked about is a national sales tax that would replace income taxes. This may even be better in that it provides people an incentive to save and not overspend.

Either way, I’m sure there would be a rough transition period but the ongoing and long term benefits of either system would far outweigh it. Right now we have a system that punishes achievement and stifles economic growth. If all the other taxes were removed I would think our reduced product costs, that would result, would mostly likely offset a “national sales tax”.

Although I will always support the ideas, I can’t imagine either system ever happening as there is not the political will to do so. The government would not want to relinquish its control over us, too many people are economically illiterate, and the politics of class envy seem to persuade a lot of people.

If it is going to be a sales tax on goods sold then you guys will ultimately be the tax collector for the government. We had a Goods and Services Tax (GST) added about 15 years ago replacing all other levels of taxation on different product groups - ours previously ranged from 10% to 38% depending on the goods sold and it was added on by the retailers invoice. It was tax exempt until it came to the point of sale. No tax was in the manufacturing process which could be 4 of 5 different levels.
Our GST gave a flat rate of 10% regardless of where it was collected. Each point of manufacturing charges GST and then the end user pays 10% of what they purchase, which is included in the retail price. The GST is highlighted on the receipt/invoice.
We pay GST on any non food items and then claim it back at the end of each quarter offset against any sales we make which include GST. We do the recording and collection and pay the Taxation office the difference. Ant ready to eat food and drinks are GST inclusive, but food that needs cooking or preparation by the purchaser is exempt. Other items are also exempt from GST such as medicines, insurance premiums, government charges, school fees etc.
What the GST is aimed at is making sure everyone pays a fair amount of tax meaning that the big end of business can’t go for long expensive meals to offset tax payable, or small business doing “cash” non recorded jobs. They still do “cash” jobs but they can’t claim back the GST they paid out on goods for the job so tax does filter through. Personal taxation on earnings were decreased to allow for the GST impostion on spending.
The main outcry though is that retailers are now the tax collectors of the GST and many have gone to the wall because they spent the money and didn’t have it when time to pay at the end of each quarter. You have to be disciplined to keep the money aside for when payment to the tax office is due.
Now if your tax is a flat rate then good luck to you. I am all in favour of everyone paying the same rate as long as there is no way for the big institutions to get out of it, or dilute their share. It will end tax minimalisation by crafty accountants, ensure everyone pays a fair amount and will assist growth of industry. At the moment the lower end pays their tax because they can’t fid ways to get out of it while the top end have many ways of dispersing funds to avoid tax. If a flat rate based on turnover for business is introduced it would be better to get 17% on all earnings rather than 50% on profits (which have been greatly marginalised).
What ever way there are 3 certainities - we are born, we pay taxes and we die.
I’ll get off my soapbox now :smiley:

Dave
GST here in Australia has some problems but in the whole it works.

Many of us already collect sales tax.