re: Surprise! The IRS Lied About Who Those 80,000 New Agents Would Target

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Why would there be a payroll tax? A consumption tax can be broadly applied and displace all income-type taxation, including payroll taxes.

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Because of how it’s collected.

The business is the middle man in the transaction. For example, many people have no clue how sales tax is collected. It’s not magically sent to the state when the POS device or cash register rings you up, it’s accounted for and sent to the state by the business.

And what about cash transactions? They would be scrutinizing those for proper withholding of the tax.

And like it or not… there are deadbeat businesses out there that will keep the money instead of forwarding it over when they fail to keep accounting records right or use the cash to keep the business afloat. Happens now all the time with payroll taxes. All the time. There are literally billions of dollars out there right now in unpaid and delinquent payroll taxes alone. I have to work with the IRS and clients constantly about getting them square on their payroll tax debt when they don’t make their correct deposits. Consumption taxes would be no different.