Obama suggests value-added tax may be an option

[Immanuel]

The votes won't be there for it.

I heard that one before... and now we are compelled to buy health insurance by 2014 or face fines and penalties... maybe even jail time by then, if things don't go their way.

Immie

What leads you to believe you'll face jail time, even though the bill specifically states you won't?

I said, maybe even.

What makes me think that... Queen Nancy and her insinuation that it was something to be considered.

Immie

 

[Polk]

Didn't he also make a campaign promise not to raise taxes on families earning less than $250,000/year?

Oh wait! His first act as President proved that was a lie when he raised cigarette taxes.

Immie

People have to buy cigarettes?

Doesn't matter whether they have to or not. He promised not to raise taxes on families making less than $250k and the first thing he did was raise their taxes.

Immie

Cigarettes are income now? That's news to me.

 

[Immanuel]

People have to buy cigarettes?

Doesn't matter whether they have to or not. He promised not to raise taxes on families making less than $250k and the first thing he did was raise their taxes.

Immie

Cigarettes are income now? That's news to me.

Is there a reason you are being so dense lately?

Immie

 

[Polk]

Doesn't matter whether they have to or not. He promised not to raise taxes on families making less than $250k and the first thing he did was raise their taxes.

Immie

Cigarettes are income now? That's news to me.

Is there a reason you are being so dense lately?

Immie

I'm not being dense. It's asinine to claim that your choice to buy smokes equals having your taxes increased. Don't want to pay more in cigarette taxes? Stop smoking.

 

[Immanuel]

Cigarettes are income now? That's news to me.

Is there a reason you are being so dense lately?

Immie

I'm not being dense. It's asinine to claim that your choice to buy smokes equals having your taxes increased. Don't want to pay more in cigarette taxes? Stop smoking.

You are being dense in every one of your posts ever since you came back after getting your new job.

By the way, I don't smoke. But, it is not asinine to believe that people who do smoke are addicted to them and they can't simply quit.

Your God promised not to raise their taxes and before the pictures of his inauguration were developed he had already raised their taxes.

Immie

 

[Polk]

You know how you avoid getting addicted to cigarettes? Don't start in the first place.

 

[Meister]

Last summer when I first heard rumors about the VAT, I was posting it on this board, there were those on the left that wanted links, and calling me a fearmonger. Telling me I was full of it....well look at this now....and they will be praising the idea of a VAT.
I'm telling you that this guy obama could sell a bag of ice to a democratic Eskimo.

 

[Meister]

The reality is the long-term deficit is so huge, it's going to take a mix of tax increases and spending cuts to balance it. People claiming otherwise are just living in a fantasy land.

There are a boat load of ideas for tax increases, but they are pretty much dumbfounded when it comes to the spending cuts.....I mean real and not fuzzy spending cuts.

 

[Polk]

The reality is the long-term deficit is so huge, it's going to take a mix of tax increases and spending cuts to balance it. People claiming otherwise are just living in a fantasy land.

There are a boat load of ideas for tax increases, but they are pretty much dumbfounded when it comes to the spending cuts.....I mean real and not fuzzy spending cuts.

That's because when you get down to it, there isn't really any political appetite for spending cuts. Republicans laughed when Obama proposed a three-year freeze in non-defense discretionary spending, saying it wouldn't have much impact on the deficit. They were right that it won't, but that's the same source they'll be looking at for spending cuts too.

 

[GilbertArizona]

Can you explain why you don't think it will happen?

I'd be interested in knowing your reasons.

Immie

The votes won't be there for it.

I heard that one before... and now we are compelled to buy health insurance by 2014 or face fines and penalties... maybe even jail time by then, if things don't go their way.

Immie

Well my understanding from some reading a few years back that enforcing VAT was a problem in Europe. I have complete confidence in the ability of Americans to dodge taxes with the efficiency of anybody in the world.

As far as the votes go, I think the Right will attack it on simple merit (but their silence worries me when Bush's commission was looking at a new sales based tax) and the Left will attack it as being regressive.

 

[Gatekeeper]

Again, then bad side of giving this out of control government we have now the VAT is not only breaking the so called promise of no tax increases for those making less than 250K/yr, it gives some of these insane 'bastads' in D.C. another credit card to TAP what ever we have left to live on.

When does it stop? The answer is NEVER. But can it be controlled?

I know this has probably been posted before, but it's worth a repeat.

Second, the VAT also would give Washington politicians more money to spend, which is kind of like sending a gambling addict on a month-long junket to Las Vegas or buying a case of liquor for an alcoholic.

Debate: How Bad Is the VAT? Let Me Count the Ways - AOL News

This Obama Tax and Spend chaotic plan makes the original reason for the Revolutionary War look like nothing, these people,today in D.C. are worse than the Brits were by light years, these people today WANT IT ALL, and at this rate their going to get it..

 

[AmericanFirst]

Obama is just proving that he is as big a liar as he seems to be. He has lied to us since he said he wasn't going to run for president and then did. I think he actually doesn't know he lies. This VAT is just more proof that he is lying after he said no one making under &250,000 taxes would be raised. He also lied about unemployment not going above 8% when the stimulus (spending) bill passed and then went to better than 10%. If Obama is on camera talking, he is LYING.

 

[CMike]

He was for it before he was against it.

 

[Vanquish]

I'm 120% against a VAT on top of our income tax system. It's deplorable.

 

[Immanuel]

You know how you avoid getting addicted to cigarettes? Don't start in the first place.

That is all well and good for those of us who never did.

Unfortunately, you can't say that to people who lived and began smoking when the nation addicted so many people to tobacco. When I was a kid, I remember just about every other TV commercial was an ad for a tobacco product. Smoking was not the taboo it is today.

However, none of this changes the fact that the first thing the President did upon entering the office is to raise taxes on families earning less than $250k. He simply chose the politically correct victims of the day to raise them on.

Immie

 

[Immanuel]

The reality is the long-term deficit is so huge, it's going to take a mix of tax increases and spending cuts to balance it. People claiming otherwise are just living in a fantasy land.

There are a boat load of ideas for tax increases, but they are pretty much dumbfounded when it comes to the spending cuts.....I mean real and not fuzzy spending cuts.

That's because when you get down to it, there isn't really any political appetite for spending cuts. Republicans laughed when Obama proposed a three-year freeze in non-defense discretionary spending, saying it wouldn't have much impact on the deficit. They were right that it won't, but that's the same source they'll be looking at for spending cuts too.

Two posts in one night that we agree on... you are setting a trend here.

Immie

 

[Immanuel]

The votes won't be there for it.

I heard that one before... and now we are compelled to buy health insurance by 2014 or face fines and penalties... maybe even jail time by then, if things don't go their way.

Immie

Well my understanding from some reading a few years back that enforcing VAT was a problem in Europe. I have complete confidence in the ability of Americans to dodge taxes with the efficiency of anybody in the world.

As far as the votes go, I think the Right will attack it on simple merit (but their silence worries me when Bush's commission was looking at a new sales based tax) and the Left will attack it as being regressive.

Well, right now, the Republicans have no power at all and if he and Nancy want to push through a VAT, he has proven that he can do so by pushing through phase one of the move to Universal Health Care.

As for your point on the silence of Republicans regarding the Sales Tax, that silence was because President Bush was speaking about replacing the Income Tax with a National Sales Tax which would be a good thing in my opinion. Replacing the unmanageable regulations of the Income Tax with a simple sales tax (or better yet The Fair Tax) would be a good thing although I do not think it will happen. Good things do not come out of Washington.


Also from my understanding, the idea is not to replace the Income Tax with a VAT, but rather to supplement it. That is a huge difference between President Bush's plans and President Obama's in my book.

Immie

 

[blastoff]

If Barry and the Dimocrats get serious about a VAT it's time for the rest of us to be seriously concerned. Below are VATs from around the world, original % rates, current, and highest income tax rates (Wall Street Journal editorial, 4/15/10). Fill in any numbers you want for the U.S., and then bend over and kiss you fiscal ass goodbye.

Country...orig. VAT rate...current VAT rate...highest income tax rate...

Canada..........7%.....5%.....46.4%
Denmark.......9%.....25%....59.7%
France......13.6%...19.6%...45.8%
Germany...10%......19%.....47.5%
Italy..........12%......20%....44.9%
Japan.........3%.......5%.......50%
Spain.......12%.......16%.....43%
Sweden...17.7%.....25%.....56.4%
Swit'land..6.5%......7.6%....41.7%
U.K..........8%........17.5%....50%
U.S.........0.............0..........35%

 

[Madeline]

The reality is the long-term deficit is so huge, it's going to take a mix of tax increases and spending cuts to balance it. People claiming otherwise are just living in a fantasy land.

I quite agree, and this will remain true regardless of what party affiliation is in power in DC. Add to this evil brew the possibility that the US dollar will continue to decline against some foreign currencies, causing our cost of carrying debt owned by foreign nationals and governments to grow.

All this was inevitable before Obama spent $1, and though it has been exascerbated by his initiatives, folks seem unable to grasp that bail outs and tax increases (in the sense of tax decreases that were temporary and scheduled to expire) began under Bush and were responsible for a fair share of the current black economic cloud.

If the nation's GDP stagnates or actually contracts in growth, we'll have the perfect storm for a real Depression. I expect we'll begin to see how bad things will likely come to be in about 2 years...shortly after the next presidential term begins.

Buckle in, folks. Gonna be a bumpy ride.

 

[Madeline]

I heard that one before... and now we are compelled to buy health insurance by 2014 or face fines and penalties... maybe even jail time by then, if things don't go their way.

Immie

Well my understanding from some reading a few years back that enforcing VAT was a problem in Europe. I have complete confidence in the ability of Americans to dodge taxes with the efficiency of anybody in the world.

As far as the votes go, I think the Right will attack it on simple merit (but their silence worries me when Bush's commission was looking at a new sales based tax) and the Left will attack it as being regressive.

Well, right now, the Republicans have no power at all and if he and Nancy want to push through a VAT, he has proven that he can do so by pushing through phase one of the move to Universal Health Care.

As for your point on the silence of Republicans regarding the Sales Tax, that silence was because President Bush was speaking about replacing the Income Tax with a National Sales Tax which would be a good thing in my opinion. Replacing the unmanageable regulations of the Income Tax with a simple sales tax (or better yet The Fair Tax) would be a good thing although I do not think it will happen. Good things do not come out of Washington.


Also from my understanding, the idea is not to replace the Income Tax with a VAT, but rather to supplement it. That is a huge difference between President Bush's plans and President Obama's in my book.

Immie

Immie, to my knowledge no one has ever seriously proposed replacing the income tax with a VAT or any other form of excise, sales or consumption tax. I would love to see a link to this.

In 2008, the corporate and personal income taxes in the US raised approximately 57% of the $2.5 Trillion in US revenues, 97% or more derived from taxation. (The government earns a small amount of interest income, income from the sale of assets, etc.)

What are the federal government's sources of revenue?

There is no US VAT at this time, so if one were to be adopted and to replace the income taxes on individuals and corporations, it would have to raise approximately 1.425 Trillion dollars. Remember, the VAT is a tax on the "value added" to a product as it moves from the raw material stage to the distribution stage. It is not a tax on sales to consumers and it is not a tax on services. It is not a tax on real estate. Obviously then, the identity of taxpayers and the distribution of the tax burden under a VAT vs. the current income tax would be as different as night and day.

I'm having a terrible time finding data on the percent of GDP represented by the manufacture of goods or sales of commodities. Maybe someone more skilled in economics can help. But you should note, a VAT on the sale of an incomplete product or raw commodity to a buyer might not be possible if the purchaser is foreign and the sale is subject to a tax treaty, etc. Without getting too complicated, not all transactions involving such sales would be VAT taxable...only a subset of them.

Let's assume, for argument's sake, that the US GDP in 2008 included $110 Trillion from the sale of commodities and manufacture of goods. Assume further than $100 Trillion of these revenues were subject to VAT.

In order for a VAT to raise the revenues now raised by the income tax, it would have be imposed at a rate of 1.425. That may sound acceptable till you realize a complex good, such as a pc, would undergo at least 100 VAT transactions, and while each would not impose the tax on the value of the entire finished good, that cumulative effect would be crushing. Arguably, a pc would increase in cost to the direct consumer from $1000 to as much as $1,425 or more.

Of course, the consumer would have more spending money with which to buy the pc. If he was an ordinary middle class taxpayer, he'd have about 25% more to spend after income taxes were repealed. But would a 25% rise in income allow a taxpayer to acquire goods that have increased so much because of the VAT?

No matter how you slice it, a tax on income is the best way to raise revenue and distribute the tax burden among citizens.