Reply #100: I've lost you on this one

[M155Y_A1CH]

Debt is not the purchase that created the debt. It is an agreement to borrow money. The items or services purchased with money from the loan is taxed once at point of purchase, or not if exempt.. The loan would not be charged any tax. Only the purchases if you decide to use the borrowed money. Loan payments are not purchases and would not be taxed. That student with the loan would receive his full check for working, not the federal taxed version he receives now. Money spent on his loan or any loan would not be taxed any additional amount. As it stands he will be taxed on income before he even gets to make a loan payment. So in our current system, his school loans are taxed. With a flat sales tax he is only taxed when he pays tuition, if there is not an education exemption in place. I suspect we would exempt education costs to some degree if not entirely. The only way we would fail to get our revenues is if Americans suddenly stop buying nonessentials to the degree we currently do. Stuff would cost more on the face of it but incomes would be higher too. You would also receive all of your income each payday instead of having the tax withdrawn ahead of it's due date. If you earn 10,000 or under right now you have to give up the use of some of your money until after the end of the year when you receive your rebate. That weekly income taxation takes the money out of your hands for up to a year. At that income level you need all of your income for necessities but you can't get your hands on it until the government has had their use of it. You end up looking for work under the table or black marketeering opportunities which we are unable to tax at all. If you make your fortune this way, America is cut out of the loop and we get no taxes from you at all. You get to spend your illegal money on the legal market and still have no dues to pay.
A flat sales tax might hurt foreign tourism, maybe not because the dollar is already 25% lower than it's counterparts and dropping. Those that want to buy up America while it's cheap will currently face no federal taxation on the purchases. There is already so much inequity with our current system we could do better with any well thought out plan at this point. Necessary money is treated exactly as discretionary money and that is the beginning of unfairness. Setting a dollar income level for taxation is not fair because some folks with lots of children or elders to care for need a larger base amount to survive than a live at home teenager who works for pleasure money. It's only at the point of sale that we can sort them out and fine for pleasure and exempt for need. Income levels alone don't divide the haves from the have-nots it's what a person is able to do with that income that tells.