Many See the VAT Option as a Cure for Deficits

[dtotire]

Many See the VAT Option as a Cure for Deficits


By CATHERINE RAMPELL
Published: December 10, 2009

Runaway federal deficits have thrust a politically unsavory savior into the spotlight: a nationwide tax on goods and services.
Members of Congress, like their constituents, are squeamish about such ideas, instead suggesting spending cuts or higher taxes on the rich. But with a lack of political will to do the former, and a practical ceiling to how much revenue can be milked from the latter, economists across the political spectrum say a consumption tax may be inevitable once the economy fully recovers.

“We have to start paying our bills eventually,” said Charles E. McLure, a tax economist who worked in the Reagan administration. “This strikes me as the best and most obvious way of doing it.


The favored route of economists is known as a value-added tax, which is a tax on goods and services that is collected at every step along the production chain, from raw material to a consumer’s shopping bag. Similar to a sales tax, it generally results in consumers paying more for the things they buy. The revenues could be used to pay for health care or other social programs, or just to pay down existing debt.


more:
http://www.nytimes.com/2009/12/11/business/11vat.html?hp

[Goldstein1984]

1. Good Idea

Because money sitting in the bank accounts of fatcats isn't being used to consume and won't be taxes.

Watch consumption drop like a rock. Not good when consumption is 70% of the GDP.

Congress's solution is bound to soak Main Street instead of Wall Street.

And what a surprise, a Reagan Era trickledown economist thinks this is a good idea.

[dmallind]

2. Yes - as is a bad move. Could have potential though.

For example we could exempt food, clothing, shelter and utilities from the VAT and app
Another concept would be to "luxury tax" all products - applying additional taxes only to those priced in the upper half (or whatever) of each commodity. So, let's say cell phones range from $20-$600 (a guess). Apply the tax to those costing more than $250. The poor and frugal can buy perfectly serviceable and capable phones without VAT, but those who must have the flashy new ones pay for it. It could even apply to necessities then. Buy a $100 winter coat and it's not VAT'd. Buy a $300 coat and pony up. So even for somebody like me who has decent spending power, I can decide whether the better options are worth te additional tax or not. I would likely pay it for beer but not food, for computers but not TVs, and so on.

[Goldstein1984]

3. I still like the idea of taxing the rich more

VAT may penalize people who want to buy American.

Also, the top 1% of the population has as much wealth as the bottom 95%. They've grown more wealthy while everyone else has been on the receiving end of Friedman/Reagan/Bush/Clinton/Bush free market trickle-down BS. They can take it.

[dtotire]

4. When Goods Are Exported , The VAT is Rebated

Also, the VAT is would be added to anything imported (except food). This will benefit American business, and increase jobs for Americans. The purpose of a VAT is not to raise income, but to level the playing field for American business. Over 100 countries have a VAT, and this is added to anyting we export to them. It will reduce our trade imbalance, and increase employment.The marginal tax rate on top income earners could, and should still be increased. The top marginal rate in the European Community is as high as 60%, and all have VAT's. The revenue collected could be used to fund universal health insurance. I don't think Obama would propose a VAT in this term, though he might in his second (if there is one).

[Daveparts still]

5. Look at what America Exports!

Food stuffs, raw materials, airliners.It is a bogus argument and just another name for a flat tax.

[Lydia Leftcoast]

6. Hey, how about taxing the RICH before adding another burden to the rest of us?

I could almost stomach a VAT if it were used for single-payer or national health service health care, but it will be used to fund the military for sure.

Even rolling tax rates back to Reagan-era levels would be an improvement, but the rich have partied for so long and done so much damage to the economy that a return to Eisenhower-era tax levels with all the loopholes closed (but indexed for inflation of course) would not be unwarranted.

[Goldstein1984]

7. Yes, the wealthy have had about three decades of

trickle-down economics, privatization and tax cuts working for them. They've grown richer, and the poor have grown poorer.

[clarence swinney]

9. Yes Lydia Yes Yes Yes

Wall Street via K Street Owns Congress and White House.

It will take Campaign finance by public to kill varmits

[clarence swinney]

8. Pay Their Way

RICH

1946 to 1981 we had an equity in distribution of Income/Wealth.

Policies of Reagan/Bush transferred it to top big time.

In 2008--Rich paid 30% of Total Income in Federal, State, Local taxes.
Middle Class paid about same percent.

Very simple solutions

Lift Cap on Payroll Tax
Increase Estate Tax big time
Tax unearned Income at 28%

Simple Fair

1946-1% had of 30% Total Financial Wealth in America
10980--20%--decline of 33%- (equity had taken place 1946-1980)
1989--36%--Increase of 80%--Reagan policies increased this redistribution.

Here cometh BushReagan II

2007--20% own 93% of Total Financial Wealth in America
80% owned 7% or equity in homes.

Few million own us folks.

It is truth.

WALL STREET
The Rich Man Gambling Casino took over under Bush.
The Rich Man Gambling Casino enriched the rich and killed millions of families with Housing Disaster.

Rich Man Gambling Casino controls majority of our Major corporations.

Export of jobs disaster laid at feet of those Gamblers whose only motive is Maximize Profits to hell with America.

It sounds harsh. It is Harsh. Tens Of Millions are suffering.

Hanes Hosiery(winston salem nc) once number two is now building huge plant in China and American jobs will be gone. China subsidizes the plant with profits from Wal-Mart in Winston Salem NC.

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political historian since 1991
Lifeaholics of America
Since 1991 read equivalent of 2,000 books(200 page) on political history


DISGUSTED IN CAROLINA