Author Topic: VAT here we come..  (Read 2167 times)

Offline Kingpin

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VAT here we come..
« on: January 15, 2013, 10:47:28 AM »
Read an article, basically stating, that a VAT is inevitable short of major entitlement reform, because it is politically impossible to raise taxes as much and for as long as we will need.
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Offline tony b

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Re: VAT here we come..
« Reply #1 on: January 15, 2013, 10:54:44 AM »
VAT is a completely onerous thing for the economy, better off with just a national sales tax, it will be easier to enforce, generate the same amount of revenue and cost less to implement.  however, I've said a million times I'd support a natl sales tax if (and ONLY if) we completely dispatched with income tax and all federal subsidies on oil/farm/etc.
You hate your job??  why didn't you say so?? well, there's a support group for that, it's called EVERYBODY and they meet at the bar.

Offline Kingpin

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Re: VAT here we come..
« Reply #2 on: January 15, 2013, 11:18:41 AM »
that probably won't happen.  I see it being in addition to income tax.  Sales tax only not what it is cracked up to be for a nation, works good at the state level, but not at the national level.   I agree VAT would be harmful to the economy and especially to the middle class.

haha

November 27, 2012
Combating Inequality May Require Broader Tax
By EDUARDO PORTER
Rarely have we experienced such a confluence of arguments in favor of raising taxes on the rich. After a hard-won re-election fought mainly over taxes and spending, President Obama arguably has a mandate from voters to tap the wealthy to address our budget woes.

Whats more, raising more money from the wealthy might go a long way toward righting our lopsided economy which delivered 93 percent of our income growth in the first two years of the economic recovery to the richest 1 percent of families, and only 7 percent to the rest of us.

Yet while raising more taxes from the winners in the globalized economy is a start, and may help us dig out of our immediate fiscal hole, it is unlikely to be enough to address our long-term needs. The experience of many other developed countries suggests that paying for a government that could help the poor and the middle class cope in our brave new globalized world will require more money from the middle class itself.

Many Americans may find this hard to believe, but the United States already has one of the most progressive tax systems in the developed world, according to several studies, raising proportionately more revenue from the wealthy than other advanced countries do. Taxes on American households do more to redistribute resources and reduce inequality than the tax codes of most other rich nations.

But taxation provides only half the picture of public finance. Despite the progressivity of our taxes, according to a study of public finances across the industrial countries in the Organization for Economic Cooperation and Development, we also have one of the least effective governments at combating income inequality. There is one main reason: our tax code does not raise enough money.

This paradox underscores two crucial lessons we could learn from the experience of our peers around the globe. The first is that the governments success at combating income inequality is determined less by the progressivity of either the tax code or the benefits than by the amount of tax revenue that the government can spend on programs that benefit the middle class and the poor.

The second is that very progressive tax codes are not very effective at raising money. The corollary suggested by Peter Lindert of the University of California, Davis in his 2004 book Growing Public is that insisting on highly progressive taxes that draw most revenue from the rich may result in more inequality than if we relied on a flatter, more regressive tax schedule to raise money from everybody and pay for a government that could help every American family attain a decent standard of living.

Consider government aid for families. According to the O.E.C.D. study, our Temporary Assistance for Needy Families is the most progressive program of cash benefits for families among 22 advanced countries, accurately targeted to serve the poor.

But American family cash benefits are the least effective at reducing inequality. The reason is that they are so meager. The entire budget for cash assistance for families in the United States amounts to one-tenth of 1 percent of the nations economic output. The average across the O.E.C.D. nations is 11 times bigger. Even including tax breaks and direct government services, we spend a much smaller share of our economic output on family assistance than almost any other advanced nation.

The same pattern can be found across a range of government programs. The reason is always the same: their relatively small size. Over all, government cash benefits in the United States including pensions, disability, unemployment insurance and the like contribute about 10 percent to household income, on average, according to the study. The average across industrial nations is twice that.

Our budget reveals a core philosophical difference with other advanced countries. In the big-government social democracies like those of Western Europe, government is expected to guarantee a set of universal public services from health care to child care to pensions that are considered basic rights of citizenry. To pay for this minimum welfare package, everybody is expected to contribute proportionately into the pot.

Government in the United States has a different goal. Benefits are narrower. Social Security and Medicare follow a universal service template, but only for older Americans. Other social spending is aimed carefully to benefit the poor. Financed through a more progressive tax code, it looks more like charity than a universal right. On top of that, our philosophical stance virtually ensures a small government.

Progressive taxes make it hard to raise money because they distort peoples behavior. They encourage taxpayers to reduce their tax liability rather than to increase their pretax income. High corporate taxes encourage companies to avoid them. High taxes on capital income also encourage avoidance and capital flight. High income tax rates on top earners can discourage work and investment, too. So trying to raise a lot of money with our progressive tax code would probably not achieve the goal and could damage economic growth.

Big-government social democracies, by contrast, rely on flatter taxes to finance their public spending, like gas taxes and value-added taxes on consumption. The Nordic countries, for instance, have very low tax rates on capital income relative to income from work. And they have relatively high taxes on consumption. In Denmark, consumption tax revenue amounts to about 11 percent of the nations economy. In the United States, sales taxes and excise taxes on cigarettes and other items amount to roughly 4 percent.

Liberal Democrats have long opposed them because they fall much more heavily on the poor, who spend a larger share of their incomes than the rich. But these taxes have one big positive feature: they are difficult to avoid and produce fewer disincentives to work or invest. That means they can be used to raise much more revenue.

Public finances are under strain today on both sides of the Atlantic, as governments struggle to cope with our long global recession and the aging of the baby boom generation. In Southern Europe, the pressure to pare back universal welfare systems is intense. In the United States, political leaders on both sides of the partisan divide have realized that even our relatively meager package of social goods cannot be sustained with our slim tax take.

But the United States has one option that most of Europes flailing economies do not. Its tax revenue is so low, comparatively, that it has more space to raise it. A more efficient, flatter tax schedule would allow us to do so without hindering economic activity.

Bruce Bartlett, a tax expert who served in the administrations of Ronald Reagan and George H. W. Bush, told me last week that he thought federal tax revenue could increase to 22 percent of the nations economic output, well above its historical average of 18.5 percent, without causing economic harm. If President Obama tries to go down this road, however, he may have to build a flatter tax code.

We should reform the tax system, no question, William Gale, a tax policy expert at the Brookings Institution and co-director of the nonpartisan Tax Policy Center, wrote in an e-mail. We are going to need to move beyond the current set of tax instruments to raise the needed revenues a VAT and or a carbon tax seem like the obvious ways to go. And Mr. Bartlett, who writes a column for The New York Timess Economix blog, also pointed out: We cant get all the revenue we need from the rich. Eventually, everyone will have to pay more.

E-mail: eporter@nytimes.com;
"Dessert is for people who don't drink enough."
"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money. "

Offline tony b

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Re: VAT here we come..
« Reply #3 on: January 15, 2013, 11:36:27 AM »
VAT will create its own cottage industry to help businesses prepare and manage it, it'll be bullshit and lets face it, VAT is just a complex sales tax that gets passed on to the end consumer anyway, why add all the additional bullshit along the road to final purchaser??  all it will do is create a higher priced product that is more complicated to manage for the early and middle tier companies.

eliminate ALL corporate taxes, natl sales tax, get rid of the income tax (I know its unrealistic).  the tax code in this country is broken and needs to be gutted from top to bottom, not amended with another 1000 pages of regulations and loopholes.
You hate your job??  why didn't you say so?? well, there's a support group for that, it's called EVERYBODY and they meet at the bar.

Offline thnksno

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Re: VAT here we come..
« Reply #4 on: January 16, 2013, 10:33:09 AM »
Bottom line on all this taxing, etc.

EVERYONE will eventually HAVE to PAY!

Offline AdrenalineJunky

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Re: VAT here we come..
« Reply #5 on: January 16, 2013, 02:44:28 PM »
Bottom line on all this taxing, etc.

EVERYONE will eventually HAVE to PAY!
sh!t always flows downhill.  Taxes always trickle down and hurt most the poor/middle class. 
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Offline snopork

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Re: VAT here we come..
« Reply #6 on: January 16, 2013, 09:37:49 PM »
VAT will create its own cottage industry to help businesses prepare and manage it, it'll be bullshit and lets face it, VAT is just a complex sales tax that gets passed on to the end consumer anyway, why add all the additional bullshit along the road to final purchaser??  all it will do is create a higher priced product that is more complicated to manage for the early and middle tier companies.

eliminate ALL corporate taxes, natl sales tax, get rid of the income tax (I know its unrealistic).  the tax code in this country is broken and needs to be gutted from top to bottom, not amended with another 1000 pages of regulations and loopholes.
OK, sure...................uh, who stops Al Queada from invading?  Maybe Canada will protect us - they'll have a paid army anyway

Offline tony b

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Re: VAT here we come..
« Reply #7 on: January 17, 2013, 08:36:48 AM »
VAT will create its own cottage industry to help businesses prepare and manage it, it'll be bullshit and lets face it, VAT is just a complex sales tax that gets passed on to the end consumer anyway, why add all the additional bullshit along the road to final purchaser??  all it will do is create a higher priced product that is more complicated to manage for the early and middle tier companies.

eliminate ALL corporate taxes, natl sales tax, get rid of the income tax (I know its unrealistic).  the tax code in this country is broken and needs to be gutted from top to bottom, not amended with another 1000 pages of regulations and loopholes.
OK, sure...................uh, who stops Al Queada from invading?  Maybe Canada will protect us - they'll have a paid army anyway

WTF are you talkin about?
You hate your job??  why didn't you say so?? well, there's a support group for that, it's called EVERYBODY and they meet at the bar.

Offline Kingpin

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Re: VAT here we come..
« Reply #8 on: January 17, 2013, 09:37:27 AM »
VAT will create its own cottage industry to help businesses prepare and manage it, it'll be bullshit and lets face it, VAT is just a complex sales tax that gets passed on to the end consumer anyway, why add all the additional bullshit along the road to final purchaser??  all it will do is create a higher priced product that is more complicated to manage for the early and middle tier companies.

eliminate ALL corporate taxes, natl sales tax, get rid of the income tax (I know its unrealistic).  the tax code in this country is broken and needs to be gutted from top to bottom, not amended with another 1000 pages of regulations and loopholes.
OK, sure...................uh, who stops Al Queada from invading?  Maybe Canada will protect us - they'll have a paid army anyway
I think he meant replace the income tax code with a national sales tax.  IE, rather than being income based make revenue collection consumption based.  His punctuation was not correct.
"Dessert is for people who don't drink enough."
"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money. "

Offline thnksno

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Re: VAT here we come..
« Reply #9 on: January 17, 2013, 12:37:18 PM »
sh!t always flows downhill.  Taxes always trickle down and hurt most the poor/middle class.

This really goes against my principle regarding taxation period, but I'll say it anyway. The middle class and the poor have been coddled for far too long regarding taxation, meaning they haven't paid their "fair share" and they are the problem with revenue.

Awhile back it used to amazed me when my neighbor would come over talking about the $10,000 they were returned from the IRS, meanwhile I was writing a check for $10,000 to the IRS... WTF? His family is the same size as mine, we have nearly identical houses, we consume the same yet I paid A LOT more. Then the whole Obama-drama came along and we've cut income almost purposely (had I never been laid off I never would have woken up to the facts) and now I see the "middle class" tax liability. I too am now getting 5 digit checks from the IRS and I am FAR LESS productive today than I was 5 years ago!

Offline AdrenalineJunky

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Re: VAT here we come..
« Reply #10 on: January 18, 2013, 11:16:36 AM »
sh!t always flows downhill.  Taxes always trickle down and hurt most the poor/middle class.

This really goes against my principle regarding taxation period, but I'll say it anyway. The middle class and the poor have been coddled for far too long regarding taxation, meaning they haven't paid their "fair share" and they are the problem with revenue.

Awhile back it used to amazed me when my neighbor would come over talking about the $10,000 they were returned from the IRS, meanwhile I was writing a check for $10,000 to the IRS... WTF? His family is the same size as mine, we have nearly identical houses, we consume the same yet I paid A LOT more. Then the whole Obama-drama came along and we've cut income almost purposely (had I never been laid off I never would have woken up to the facts) and now I see the "middle class" tax liability. I too am now getting 5 digit checks from the IRS and I am FAR LESS productive today than I was 5 years ago!
I agree the pain needs to educate more of the lower class.  Eliminate some deductions.  Kids and mortage for starters.
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Offline thnksno

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Re: VAT here we come..
« Reply #11 on: January 18, 2013, 02:06:55 PM »
I agree the pain needs to educate more of the lower class.  Eliminate some deductions.  Kids and mortage for starters.

I'm going to really test the limits for 2012's 1040, results should be done in a couple of weeks, but through credits etc guessing we'll get a "refund" on negative AGI. lol!

Offline 6Mile

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Re: VAT here we come..
« Reply #12 on: January 21, 2013, 05:47:56 PM »
sh!t always flows downhill.  Taxes always trickle down and hurt most the poor/middle class.

This really goes against my principle regarding taxation period, but I'll say it anyway. The middle class and the poor have been coddled for far too long regarding taxation, meaning they haven't paid their "fair share" and they are the problem with revenue.

Awhile back it used to amazed me when my neighbor would come over talking about the $10,000 they were returned from the IRS, meanwhile I was writing a check for $10,000 to the IRS... WTF? His family is the same size as mine, we have nearly identical houses, we consume the same yet I paid A LOT more. Then the whole Obama-drama came along and we've cut income almost purposely (had I never been laid off I never would have woken up to the facts) and now I see the "middle class" tax liability. I too am now getting 5 digit checks from the IRS and I am FAR LESS productive today than I was 5 years ago!


While I get why you are doing this, does it not seem counter productive for the government be be enticing its population to sideline themselves? 

If our leaders do not wake up soon they will find a lot less people willing to pull the wagon.  Our leaders should be fostering an environment for entrepreneurs, and businesses to grow.  It would seem to me that enticing someone like yourself to get out and work to be more productive would benefit everyone.  Burdening the spirit of free markets and entrepreneurialism with over regulation and taxation just stifles growth.   

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Offline thnksno

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Re: VAT here we come..
« Reply #13 on: January 25, 2013, 10:12:43 AM »
While I get why you are doing this, does it not seem counter productive for the government be be enticing its population to sideline themselves? 

If our leaders do not wake up soon they will find a lot less people willing to pull the wagon.  Our leaders should be fostering an environment for entrepreneurs, and businesses to grow.  It would seem to me that enticing someone like yourself to get out and work to be more productive would benefit everyone.  Burdening the spirit of free markets and entrepreneurialism with over regulation and taxation just stifles growth.

Here's the big 3 ideas being floated around... It amazes me how far our heads are up our collective asses.

Another big idea for job/nation growth (let's face it they're one in the same) is to reform immigration so we can steal more smart people from other countries.... WT flying F? What's WRONG with America's kids???? It is because we allow so many foreign student visas, THEY CROWD OUT TAXPAYING AMERICAN KIDS! There's numerous state schools turning away RESIDENTS because the school gets FULL TUITION when it enrolls Wong One and Wang Two!

Quote
Work sharing

Instead of keeping some workers on and laying others off entirely, companies could cut all their employees hours a little. Government unemployment benefits would make up part of the lost wages.

Working sharing has been successful in Germany, and its technically available in many states, although its underused. It should be tried on a massive scale here, says Heidi Shierholz, an economist at the Economic Policy Institute. It doesnt cost anything, and it could save millions from short-term and long-term job loss. Read more about work sharing from the Center for Economic and Policy Research.

Maximum bank reserves

U.S. banks now have about $1.6 trillion in reserves parked at the Federal Reserve, not doing anything except making the banks feel super, super safe. Economist Robert Pollin of the University of Massachusetts-Amherst and the author of Back to Full Employment suggests that the Fed put a cap on bank reserves, forcing the banks to do something with about $1 trillion in excess reserves, like lending it out to small businesses that are now being strangled by tight credit.

Raise the minimum wage

This would be controversial, since some theorists say raising the minimum wage reduces employment. The empirical studies suggest otherwise. Raising the minimum wage would put more money in the hands of the working poor, boosting consumption and leading to higher output, suggests James Galbraith, an economist at the University of Texas.

Just because we cant get Congress to reverse course and do the right thing on fiscal policy doesnt mean we are helpless to fight back against this global depression. Life is too short to simply wait years for things to get better.

Offline SNO4ME

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Re: VAT here we come..
« Reply #14 on: January 25, 2013, 07:22:07 PM »
While I get why you are doing this, does it not seem counter productive for the government be be enticing its population to sideline themselves? 

If our leaders do not wake up soon they will find a lot less people willing to pull the wagon.  Our leaders should be fostering an environment for entrepreneurs, and businesses to grow.  It would seem to me that enticing someone like yourself to get out and work to be more productive would benefit everyone.  Burdening the spirit of free markets and entrepreneurialism with over regulation and taxation just stifles growth.

Here's the big 3 ideas being floated around... It amazes me how far our heads are up our collective asses.

Another big idea for job/nation growth (let's face it they're one in the same) is to reform immigration so we can steal more smart people from other countries.... WT flying F? What's WRONG with America's kids???? It is because we allow so many foreign student visas, THEY CROWD OUT TAXPAYING AMERICAN KIDS! There's numerous state schools turning away RESIDENTS because the school gets FULL TUITION when it enrolls Wong One and Wang Two!


Quote
Work sharing

Instead of keeping some workers on and laying others off entirely, companies could cut all their employees hours a little. Government unemployment benefits would make up part of the lost wages.

Working sharing has been successful in Germany, and its technically available in many states, although its underused. It should be tried on a massive scale here, says Heidi Shierholz, an economist at the Economic Policy Institute. It doesnt cost anything, and it could save millions from short-term and long-term job loss. Read more about work sharing from the Center for Economic and Policy Research.

Maximum bank reserves

U.S. banks now have about $1.6 trillion in reserves parked at the Federal Reserve, not doing anything except making the banks feel super, super safe. Economist Robert Pollin of the University of Massachusetts-Amherst and the author of Back to Full Employment suggests that the Fed put a cap on bank reserves, forcing the banks to do something with about $1 trillion in excess reserves, like lending it out to small businesses that are now being strangled by tight credit.

Raise the minimum wage

This would be controversial, since some theorists say raising the minimum wage reduces employment. The empirical studies suggest otherwise. Raising the minimum wage would put more money in the hands of the working poor, boosting consumption and leading to higher output, suggests James Galbraith, an economist at the University of Texas.

Just because we cant get Congress to reverse course and do the right thing on fiscal policy doesnt mean we are helpless to fight back against this global depression. Life is too short to simply wait years for things to get better.

I usually get the idea the it isn't about education. It's about the money, just like in collage sports.  A teacher acquaintance says four years of college is a weeding process. I tell  him it's a greeding process. Four years should be done in 3 years and get on with life but the education system is too busy self perpetuating their own job security.
LLAP