How is that Hope n' Change VAT tax going to work?

[Just Win]

i am sure many of you have heard the news by now that rhambo emmanuel's brother, zek emmanuel, has suggested to president obama that in addition to the national government income tax, the national government payroll taxes, and a myriad of other national government taxes both explicit and implicit that we institute a socialist government euro value added tax or vat of 25%. WOW! keep in mind a vat tax will impact the price of everthing at the manufacturing, wholesale, and retail levels so that by the time it reaches the end customer you are looking at a HIGHLY regressive tax that is destined to destroy an already struggling middle class. looks like we are about to enter the dark ages of economic growth. look at post ww II europe if you want to see what a vat tax does to an economy.

[NCVol]

A VAT is no different than the FAIR/Retail Sales tax.  Not sure what the problem is.  The only functional difference is how it's collected. 

I'd gladly trade a VAT for the corporate income tax - we'd be able to rebate the tax on exports like the EU, China, Japan, etc. 

[Just Win]

just a quck note on this vat thing. keep in mind that the triditional national government income tax fileing, withholding,... WILL NOT go away once the 25% national VAT sales tax is added. The regressive 25% VAT sales tax IS IN ADDITION to the national government income tax, national government social securtiy tax, national government medicar/medicad tax... those on the left fringe have been given their daily talking/thinking points to spread the disinformation that this HIGHLY REGRESSIVE vat tax is simply what bortz (neil sp?) preaches on his show with a national sales tax to replace the income tax. caveat emptor for those of you that suffered through latin in grade school. the devil is always in the details with these added taxes.

[NCVol]

The TAX itself is functionally almost IDENTICAL to the Boortz pushed FAIR tax.  What happens to taxes outside the RST/VAT/FAIR tax is another matter.  If they reduce the payroll tax, for example, at the same time they impose a VAT, it's much less regressive.  Same thing if the proceeds are used to fund health insurance - a VAT surcharge on consumption in exchange for medical care is a good trade for a poor person.  Whether the system as a whole is more or less regressive depends on factors other than the VAT itself. 

But consumption taxes are by definition regressive, whether it's Tennessee's sales tax or Boortz's FAIR tax or a VAT since they all impose a tax on final consumption by consumers, with varying levels of taxation of business inputs.  The VAT actually taxes the least amount of business inputs, so should be very popular with you "conservative" economic types. 

[Jeremy Roenick]

If you're a student of the Fair Tax NC, you realize that the repeal of the IRS and income tax is an integral part of the plan and must happen before any national sales tax were to be enacted.

What Rahm's brother is floating is in addition to our income tax, which by the way fell 34% short of last year's revenues thanks to our current economic disaster.  There is no way to dig ourselves out of this hole (deficit) without making EVERYONE indentured servants of the state, and they know it.

[NCVol]

I did know that, but the fact remains the TAX part of the FAIR tax is almost identical to the VAT.  It's the prebate, the elimination of the income tax and PR taxes etc. that make it different than an add on VAT. 

And I'm sure the VAT would be an add on.  That might be a good thing, actually.  Either we care about deficits or we don't.  If we don't care about deficits and debt but want to pretend to while making the situation MUCH worse, then lets cut capital gains taxes to zero, eliminate the estate tax, eliminate corporate income taxes and pretend that it will increase revenues and solve the deficit while cowardly avoiding any tough choices (aka the GOP budget plan).  If we do care about deficits and borrowing from China, then we have to for the first time in DECADES slash spending dramatically AND raise tax rates somewhere - if not a VAT (which will hit all income classes) and if not a big hit on the "rich" then where? 

The reason I do like the VAT, especially paired with a reduction in corporate rates, is it allows us to rebate at the border taxes paid by exporting businesses, and IMPOSE a VAT on imports.  It puts our exporting businesses on a level playing field with our competitors.  There is much good about this type of tax, not least of which is it's in practice nearly worldwide so we KNOW how to impose it and enforce it, etc. 

The frustrating thing is this is EXACTLY the kind of debate we should be having, with republicans playing an honest broker role.  I'm not sure it will happen. 

[Jeremy Roenick]

It's the prebate, the elimination of the income tax and PR taxes etc. that make it different than an add on VAT.

Its those items that make the FT better.  Pay what you consume.  Those on lower incomes get a prebate for their cost of living expenses.

Either we care about deficits or we don't.

The answer is yes we do, but we shouldn't run them to begin with.  Why should the taxpayer be made to suffer the irresponsibility of Capitol Hill?  Taxing people into slavery is NOT the answer.  The freshly printed money that the taxpayers will never see again is tantamount to government extortion.

The sad thing is that we are headed for leaner times in the US economy due to our foolhardy politicians and their wreckless economic policies.  The times of excess are gone, maybe to never return (not in my lifetime anyway).

[Dementia_Madness]

There is a big difference in replacing something (fair tax) and adding to something (vat). The only thing that is similar is the way they are collected, in fact, it seems to me that anyone who made the claim teh fairtax could not be emplemented should have the same argument with VAT. It seems to me that this can and probably will give the proponets of the FAIR TAX more fire power and a better standing.

btw

Dear FairTax supporter,

http://www.mycontactform.com/hosted/form.php?formid=223105  It's known as the "Show Me State," and when it comes to the FairTax, Missouri is just that.

Our friends in the American heartland have taken a big lead in pushing the FairTax movement forward, with the Missouri House of Representatives passing FairTax legislation which would replace their state income tax structure with the FairTax.

To show your support for the FairTax there and especially in Washington to replace the federal income tax system, we hope you'll consider making a special trip to join us in Columbia, MO on Saturday, June 13 for the huge Midwest FairTax Rally. Yep, that's a haul for many, but this rally alone could draw 20,000 or more so we need you there.

RSVP for the Midwest FairTax Rally Now >>

The Midwest FairTax Rally promises to be a huge, all-day FairTax event at the Boone County Fairgrounds with giveaways, music, and of course many great FairTax speakers and leaders including:


Radio host and FairTax book author,
Neal Boortz 
FairTax bill Lead-Sponsor,
Rep. John Linder (GA-7) 
Business entrepreneur and radio host,
Herman Cain 

Volunteers are also needed to staff the Rally so that new-comers can learn how the FairTax will bring real change and real economic stimulus to our country. Most volunteers will need to be in Columbia Friday morning for orientation and set up. Others can arrive very early on Saturday. We have a specific need people with laptop computers to help register people as they arrive at the rally. If you can help, please email fairtaxgeezer@yahoo.com with "registration help" in the subject line.

To learn more, and to the RSVP for this important rally, please go to http://www.midwestrally.com.

Again, thanks for all you do to support the FairTax cause, and I hope to see you in Columbia on June 13.


Sincerely,

Ken Hoagland
National Director 
 

[Just Win]

good points all dm. i am not a fan of the fair tax although i appreciate the thoughtful care and design of those that propose it's implementation. no question their motives are noble. unlike the ignoble nature of those advocating this ADDITIONAL VAT tax.

 the vat tax is the explicit tax of choice of nearly every euro government. think for a moment, what great product has come out of europe since the end of wwII besides guchi and louis vitan bags, Godiva chocolate, and mercedes diesel cars? this does not portend well for the future of the American economy.


The new GM Obam-Ratner model, nicknamed the Vat, coming soon to a surviving Democrat-owned GM dealership near you

[xander]

Ralph Nader will never let this happen!

[NCVol]

Tennessee is a pretty good example of a FAIR tax state. 

The FAIR tax will never happen so I've quit actually reading much about it.  There is no possibility that we'll replace our entire taxing system with a single consumption tax, paired with a prebate that will be incredibly difficult to implement.  And the reason Boortz and his boys support it and have the money to support it is simple - as you go further out on the income scale, it becomes more and more regressive.  The biggest of the big boys will see their effective tax rates plummet, while the broad middle will make up that slack.

It's not all that unlike the situation here in Tennessee.  The large majority of Tennesseans would pay less in tax with a much lower sales tax and a complete exemption on food with an income tax.  But the people who have money to give to campaigns benefit from our regressive sales tax, our regressive fuel taxes, our regressive tobacco taxes, liquor taxes, etc. and so we have no income tax. 

The benefit is we have low OVERALL taxes, so it's a trade-off - regressivity for low overall taxes - but that is exactly the kind of result that the proponents of the FAIR tax have paid millions to promote - a big tax cut for the financial elites.  That might be fine, but that is the result, everyone should be clear on that point, and if there is a big tax cut on that demographic, there MUST BE and is a tax increase on those below them.  If that's your idea of a good "change" then go for it. 

But it will never happen.  I don't actually think it was ever intended to be a serious proposal.  On the same level of going back on a gold standard.  Even if it is a good plan, it's politically impossible.  Can't honestly figure out what the benefit of pushing it is.  Maybe it's just a good campaign hook... a fundraising vehicle?   

[Just Win]

Ralph Nader will never let this happen!

xander,

look at this VAT thing as an AMT tax on all Americans the brunt of which must be shouldered by those can least afford the burden. i have been forced to pay that AMT mess for several years now. you talk about an unfair tax as well. it is one wicked nasty tax. it kills investment capital and disposable income. this vat thing will be a death nail to the middle class if implemented.