Surprise, surprise Team Obama floats VAT

#26
#26
lawgator1 said:
Fox News says its a sales tax. FOXNews.com - Obama Economic Adviser Says U.S. Should Consider 'Value-Added Tax'

The Heritage Foundation says its like a sales tax, the only difference being that its not charged at the register -- its charged during manufacture and so is built in to the price. Beware the Value-Added Tax | The Heritage Foundation

The Heritage Foundation piece is interesting because it says that a VAT is acceptable IF it is going to be used to replace an income tax because it is fundamentally a consumption tax.

Realistically, there is no way we will go from the elaborate income tax system we have one one day to a VAT or traditional sales tax the very next. It has to be gradual and would probably take decades.

Most economists seem to think that the current total national debt, as a percentage of GDP, is acceptable. The problem is that in recent years the annual deficit has been going up at an alarming rate. If the economy imporves, that should relieve some fo the burden, both in terms of spending and in terms of tax revenue.

In the meantime, if you really do want to move away from an income tax system, would this not be the place to start?
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A VAT is not the same as a sales tax. They are similar because they are both consumption taxes and thus similar in many respects. A lot of economists are for any type of consumption tax used to replace the income tax because it reduces the taxation of savings and investment (the driver of an economies productivity).
 
#27
#27
KB5252 said:
Do you really trust the government to give up one income source after they enact another? Do they generally give back money when they run surpluses or do the eventually find another way to spend it?

We are talking about government LG. Money is power and they will simply use it to spread around and keep the people at home happy with pork so they can secure re-election and sleep well at night. I simply don't trust government LG, they've given me no reason to.
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droski said:
yeah let's just try the VAT and not reduce income taxes because surely the politicians will give up that increased tax revenue in the future.
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volinbham said:
Being "like" sales tax doesn't make it a sales tax. Property taxes are like capital gains taxes but they are materially different.

The key distinctions include the addition at each stage of the supply chain process and the hidden nature of the VAT.

The latter is the big concern since it reduces purchasing power without the direct knowledge of consumers. Sales tax is visible and consumption varies and shifts in accordance with difference in sales tax rates.

Interesting how many of the conclusions of the Heritage Foundation report you completely ignored.
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I didn't ignore them at all. Some are amazingly ridiculous given the source, i.e. that it will cause bigger government because other countries have it and they have biger government. Talk about not even minimally understanding the difference between correlation and causation!!

At any rate, if we were going to replace the income tax system with a sales tax system (of some type) I can see the argument that it ought to be at point of sale, as opposed to during manufacturing, and that it is worse if it is assesed by the maker, versus the seller.

And I of course agree that its unlikely we would see a dollar for dollar reduction in income taxes if there were either a VAT or a sales tax.

But, if taxes will have to be increased to deal with the deficit, then would you rather it be a continuation of the current form of taxation, manipulated by politics and perpetuating the system you think fundamentally retards investment and growth, or would you prefer that at least some first steps be taken to a consumption based system?
 
#28
#28
lawgator1 said:
I didn't ignore them at all. Some are amazingly ridiculous given the source, i.e. that it will cause bigger government because other countries have it and they have biger government. Talk about not even minimally understanding the difference between correlation and causation!!

At any rate, if we were going to replace the income tax system with a sales tax system (of some type) I can see the argument that it ought to be at point of sale, as opposed to during manufacturing, and that it is worse if it is assesed by the maker, versus the seller.

And I of course agree that its unlikely we would see a dollar for dollar reduction in income taxes if there were either a VAT or a sales tax.

But, if taxes will have to be increased to deal with the deficit, then would you rather it be a continuation of the current form of taxation, manipulated by politics and perpetuating the system you think fundamentally retards investment and growth, or would you prefer that at least some first steps be taken to a consumption based system?
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Cutting spending isn't an option!

LOL!

:lolabove::lolabove::lolabove::lolabove::lolabove::lolabove::lolabove::lolabove::lolabove::lolabove::lolabove:
 
#29
#29
how about cutting spending LG? You sound as if you accept the ridiculous amount of spending the current administration is engaged in. I'll grant you that the problem has been building for decades, but the last 14 months have been unprecedented.
 
#30
#30
personally i think the VAT would be even harder to enforce and regulate than our current tax system. the fraud would be unbelievable.
 
#31
#31
LG of course the government will grow bigger because this won't even be a flat VAT, there will be exceptions and special cases coming out the nose that lobbyists will plague the new tax code with.
 
#32
#32
MG1968 said:
how about cutting spending LG? You sound as if you accept the ridiculous amount of spending the current administration is engaged in. I'll grant you that the problem has been building for decades, but the last 14 months have been unprecedented.
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how about the fact that lower taxes produce higher economic growth which therefore lowers our deficit.
 
#34
#34
MG1968 said:
how about cutting spending LG? You sound as if you accept the ridiculous amount of spending the current administration is engaged in. I'll grant you that the problem has been building for decades, but the last 14 months have been unprecedented.
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droski said:
personally i think the VAT would be even harder to enforce and regulate than our current tax system. the fraud would be unbelievable.
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lumberjack4 said:
LG of course the government will grow bigger because this won't even be a flat VAT, there will be exceptions and special cases coming out the nose that lobbyists will plague the new tax code with.
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droski said:
how about the fact that lower taxes produce higher economic growth which therefore lowers our deficit.
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Cutting taxes has a benefit to the economy, no doubt. The question is how much? The owners and managers of corporate America say that its a huge benefit because they can reinvest in their businesses and hire more people.

That is a tough sell when every week for the past five years we hear another story about the corporate owners and managers bonusing themselves amounts of money in one year that would set most of us up for life.

The middle and lower classes simply don't buy into the rhetoric of the claim that the wealthiest would hire them back or restore their benefits if they could just get a 5% cut in corporate or capital gains taxes when those same people are laying of thousands via email as they cash multimillion dollar bonuses.

The suspicion is that they won't spend the money on the business -- they'll just spend it on themselves.
 
#36
#36
lawgator1 said:
Cutting taxes has a benefit to the economy, no doubt. The question is how much? The owners and managers of corporate America say that its a huge benefit because they can reinvest in their businesses and hire more people.

That is a tough sell when every week for the past five years we hear another story about the corporate owners and managers bonusing themselves amounts of money in one year that would set most of us up for life.

The middle and lower classes simply don't buy into the rhetoric of the claim that the wealthiest would hire them back or restore their benefits if they could just get a 5% cut in corporate or capital gains taxes when those same people are laying of thousands via email as they cash multimillion dollar bonuses.

The suspicion is that they won't spend the money on the business -- they'll just spend it on themselves.
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What do you think happens to those bonuses? Do they get hidden under the mattress for a rainy day?
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#38
#38
They should write a personal check to the government, with a thank you note for allowing them to be successful.
 
#39
#39
OTE=lawgator1;3516299] email as they cash multimillion dollar bonuses.

The suspicion is that they won't spend the money on the business -- they'll just spend it on themselves.[/QUOTE]

then you really must think the average american is a complete idiot
 
#44
#44
lawgator1 said:
I thought Republicans adored the notion of a sales tax to replace the income tax. That way, the argument goes, all poprtions of the population pay tax based on what they spend, as opposed to what they earn. It theoretically shifts a significant share of the tax burden away from middle and upper class and puts it on the poor.
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When you raise both there are just simply more taxes.
 
#45
#45
hohenfelsvol said:
When you raise both there are just simply more taxes.
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Well, it appears that everyone is resigned to the fac t that there will have to be an overall, gross increase in revenue, at some point, to pay down the debt. I understand the argument that government should be reduced in size, but even if you trimmed quite a bit from what I understand the deficit would linger.

So, if there has to be an increase in revenue, I was always under the impression the GOP would prefer something other than a high income earner income tax increase.

They might prefer a sales tax increase, collected at the register. But it seems like the dampening effect would be felt whether it was collected there or in process.
 
#46
#46
I'm still confused as to why cutting spending wouldn't work?
 
#47
#47
economic growth, without an major increase in spending, is by far the best way to balance the budget. just ask your man bill clinton.
 
#48
#48
utvolpj said:
I'm still confused as to why cutting spending wouldn't work?
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Cut spending by how much and where?

How about we cut out the tax breaks for the oil companies? How about we get rid of the break for writing off mortgage interest for homes worth over $1 million?
 
#49
#49
droski said:
economic growth is by far the best way to balance the budget. just ask your man bill clinton.
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I concur.

Luckily, the Obama spending stimulus plans are beginning to really work and turn around the economy wrecked by Bush.
 
#50
#50
lawgator1 said:
Cut spending by how much and where?
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I forgot we were now only passing bills with no pork. How much has been spent in the past year that could have gone to the bottom line? Green golf carts and frisbee golf courses are necessary but there are others we can agree aren't needed
 
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