A taxpayer can’t elude this tax if he wants to use a particular good or service. Tax Lien Investing Pros And Cons. A VAT would eliminate (so advocates assert) the labyrinthine U.S. income tax system, since the VAT is so much more efficient and would bring in more revenue. Knowing the advantages of the sales tax has benefits for those on any side of the issue. This move on paper looks like it … A sales tax is a certain percentage of tax imposed by the government on the sales of goods and services. 2. Different government entities employ various taxes and rates on their citizens. So a change to a national sales tax plan reduces the disincentives to work, and workers as a whole would likely end up working and earning more. A national sales tax would require a new system of reporting and money collection that doesn’t exist right now. Instead of having progressive taxes on the amount of money that is being earned, a national sales tax would charge the same amount nationally to everyone for the goods and services that qualify. Increase In Revenue Simply raising the taxes on junk food is not enough to make people stop their consumption. Claimed advantages for the VAT are that it would: Be based on consumption, and thus provide a stable revenue base; Be “neutral,” since it would be imposed on all types of businesses; Provide stronger incentives for businesses to control costs; Encourage, or at least not discourage, savings; Upon retirement, when distributions are taken from the fund and used to purchase items, that post-tax money would then be fully taxed a second time with the presence of a national sales tax. It could replace the income tax and the 6.2% employee portion of the Social Security tax. Social cost. For example, a sheep farmer sells wool obtained from sheep to a company which fabricates yarn. Shadow Pricing: Meaning, Examples, Advantages, Uses, and Limitations, Sales Broker: Role, Advantages and Disadvantages Explained, What is Sales Compensation? What is Primary sales, Secondary sales and Tertiary sales and what factors determine them? I submit that a National Sales Tax like most of the states already have should totally replace the Income Tax. This means there are future opportunities to avoid taxation because there is no need to file an annual tax form. Sales taxes are a good way to control harmful products like tobacco and alcohol etc. AdvAntAges • The property tax is a more stable and reliable revenue source than any other tax. collecting sales tax is not an easy job. 5 years ago | 3 views. May 2, 2019 By Hitesh Bhasin Tagged With: Sales management articles. Flat Tax Vs. National Sales Tax. Oct 9, 2015 Oct 7, 2015 by Editor in Chief. Definition and Steps, What is coaching? 6. Revenue generated from sales tax is uncertain, because of the demand for products in the market. The end result could be an economic benefit that has rarely been seen in the US or anywhere else in the world. This could be used to create more jobs, invest into research and development, or reduce the prices of goods that are on the market. A National Sales Tax would require them to pay more out of pocket towards food or services, reducing their monthly income. Instead, the government would generate tax revenue by instituting a national sales tax on most purchased items. Critics argue the tax will be regressive – taking more from low-income groups. From my understanding, the concept of a national sales tax is to get rid of federal taxes and replace them with a sales tax of 15% flat. Taxing Based on Sugar Content Is Feasible at the National Level 7 ... is excluded, applying the general retail sales tax to purchases. Types and benefits. 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