We are so used to having our federal income tax, social security and medicare taxes withheld from our paycheck, most of us don't realize there are efforts to change this dramatically. There is a group going around saying that we should pay 23 cents on every dollar we spend in a federal sales tax. They must be crazy!
Wait a minute. If we are going to pay a sales tax to cover our income and social security tax, we won't have anything except our state and local taxes coming out of our pay. Even that doesn't add up to 23%. What are they talking about?What if they told you that, not only would you not have federal and social security taxes withheld from your paycheck, you would see the following things happen:
This list could go on and on about the advantages of a National Sales Tax. The truth is that our current system of taxation is totally out of control. The 10s of thousands of pages of tax laws have even the best tax minds confused.Yes, 23% does seem like a lot of sales tax to pay in addition to any state sales tax you might have. You could wind up paying 30% on a car purchase of $20,000. Lets look at some of the possible savings with a sales tax.Sales tax on car purchase - $6000Final Cost of Car - $26000Cost of car might be reduced 20% because the manufacturer doesn't pay any taxes under this plan. What is the cost of the car? $16000Sales tax on car purchase - $4800Final cost of Car - $20, 800But Wait Again! You will be buying this car using your entire paycheck. NO DEDUCTIONS. That's hard to calculate. I can almost guarantee it will be below the initial $20000 price tag. Besides, $20,800 is only 4% above the price of the car, far less than most state's sales tax.If you don't think companies will reduce their prices even though they aren't paying taxes, just imagine an entire nation knowing they are manufacturing their goods 20% to 30% cheaper and not passing that savings on to them. In addition, sooner or later one of their competitors will reduce their price, and the war is on.To find out more about the National Sales Tax just visit Americans for Fair Taxation at http://fairtax.org/ Take your time to browse the site. You will find answer to almost every question you might have.
Where Does Your Money Go? Taxes
Trying to stay within the theme of Budget Stretcher, I thought a series of articles on knowing where your money is going may help some of you understand just how much you pay on certain expenses.How Did I Get In This Mess?
When I was younger and having all kinds of money problems, I askmyself a thousand time how I got myself in this mess. It seemed like one day we were doing fine financially and the next we owedeverybody. How can it happen so quick?Sorting Your Money
For anyone that is familiar with The Complete Budget and BillOrganizer, http://www.homemoneyhelp.com/BBOonline.html you already know that I recommend that you use your checking accountto pay bills and cash to cover your household expenses.