Would a Sales Tax eliminate IRS jobs?

Question

Interested in why people believe this.

I would think adding new taxes, collection points and ways to cheat it would mean you would need more people to collect it. Even if you replaced an income driven system with a consumption based system, you would still need more IRS- because most people have 20 to 50 spending transactions for every income transaction.

So where is the saving?

Answer 1

No it wouldn't.  You will still need auditors to verify that the sales tax is being collected properly.

Answer 2

No.

Whatever tax system that we have, we will need enforcement and collection.

The best that you could hope for under a national sales tax is a renamed IRS.

Answer 3

A sales tax is collected by retailers, so the IRS would have a lot fewer places to audit.  It would be more difficult to cheat on a national sales tax.

A sales tax, also is a lot easier to audit.  An auditor just checks sales invoices or cash register tapes to see if tax is collected and checks to see that amounts collected is paid.  Many businesses have almost 100% taxable sales so all the auditor has to do is determine gross sales and multiply it by the tax rate.

Most errors in the sales tax is in the use tax since a retailer may buy something that is not for resale and obtain it tax-free by issuing a resale certificate.

Answer 4

Not likely.  To raise the same revenue as the current graduated income tax, a national sales tax would need to be levied at 30% or more.  With that high of a tax burden, which would clobber the poor and middle class, black marketing would become a major problem.  The IRS would probably have to shift resources from administration and processing to enforcement.

Answer 5

Yes, but a consumption based system would cut down on collecting by quite a bit. That would be a 'pay as you go' system. Just like paying toll on a highway. How can you get on the highway if the metal bar doesn't go up after you have paid? However, as long as there are taxes there is going to be a need of agencies like the IRS.