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Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look and/or VAT

Discussion in 'Political Zone' started by ThaBigP, May 27, 2009.

  1. ThaBigP

    ThaBigP New Member

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  2. Bach

    Bach Benched

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    Only the top 5%!!!1111!!!!

    I take it those of us making less than $250,000/yr will be exempt. Thanks Obama.
  3. sacase

    sacase Well-Known Member

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    What is the love affair with europe. BAD idea, what happend to not raising taxes on people making under 250k?
  4. Kangaroo

    Kangaroo Active Member

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    If they hit me with a sales tax plus a personal income tax I will start keeping things even longer and stick to buying even less.

    I will start pinching even more pennies I mean whats the point of buying a new car when it is an extra 5% on the already crazy taxes I pay on one now.

    Yea way to stimulate the economy :bang2::bang2:.

    yet I saw this type crap coming
  5. Jordan55

    Jordan55 Active Member

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    It's only getting better, were all going to get gouged for a long time for porkulus, they have to make up for lost tax revenue
    IRS tax revenue falls along with taxpayers' income


    USA TODAY
    Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
    When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been."

    For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.

    "These are staggering numbers," Lynch says.

    Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.

    "It's one of the drivers of the ongoing expansion of the federal budget deficit," says John Lonski, chief economist for Moody's Investors Service. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009.

    The other deficit driver is government spending, which, the AIER's report says, is the main culprit for the federal budget deficit.

    The White House thinks that tax revenue will increase in 2011, thanks in part to the stimulus package, says the report from AIER, an independent economic research institute. But it warns, "Even if that does happen, the administration also projects that government spending will be so much higher each year that large deficits will continue, and the national debt held by the public will double over the next 10 years."

    The government may have a hard time trimming spending to reduce the deficit when the recession ends. The 77 million Baby Boomers— those born in 1946 through 1964 — will start tapping their federal retirement benefits soon, which means increased government outlays for Social Security and Medicare.

    "It will be doubly difficult for federal government to reduce expenditures and narrow the deficit as rapidly as they did following previous recessions," Lonski says. At the end of the last major recession, in 1981, Boomers were in their 30s. Their incomes were expanding, as was their appetite for goods and services.

    The Boomers now are in their 50s and 60s and unlikely to keep increasing incomes for long, which means that revenue from income taxes could flatten in the next few years. Also, Lonski says, they are more likely to save for retirement than spend — and consumer spending is a big driver of the economy.

    "The American consumer led us out of previous recessions with some semblance of gusto," Lonski says. "They're too old to do it now."
  6. JBond

    JBond Well-Known Member

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    Tax and redistribute. The Obama way! Hope and change! I mentioned Obama was going to do this during the election season and was told I was crazy. Guess I was right after all. Obama is the worst President ever. Obama wants to confiscate another 5% from every American on everything bought and sold. No new taxes on those under $250K? All lies. He really is a POS. You silly Bama supporters need to wake up and admit you were wrong. You backed a loser.
  7. Temo

    Temo Active Member

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    Actually the VAT tax is popular among some segment of academics but it has gained no traction among Democratic lawmakers.

    It is, after all, a hugely regressive tax. Some academics favor it because it is essentially mostly poor people paying for their own health care, but I think the Obama administration, for one, would rather use corporate taxes.
  8. Kangaroo

    Kangaroo Active Member

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    I am not against a sales tax but then they need to drop the Personal income tax. That is one thing I like about Texas we have a sales tax but no personal income tax
  9. Doomsday

    Doomsday Rising Star

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    We already pay 8% on good purchases in the city I live in, add another 5% and we are paying 13% tax on money that was already taxed 34% when I earned it. Not to mention all the other little hidden taxes, before he is done we are going to be paying nearly 60% of our income in taxes each year. They are going to keep nibbling away until there is nothing left and I will be better off not working. At some point it will be easier to just give up my business and live off all the government.
  10. Temo

    Temo Active Member

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    The good thing about sales tax is that it promotes saving, while income taxes basically punish you for earning more, or generally for contributing more to society. The bad thing is that if it isn't implemented fairly, it punishes poor people more than rich people.

    I've always been in favor of the progressive consumption tax, which taxes people based on how much they spend rather than how much they earn, but in a way that spending from 0-20K would be tax free, then you'd get taxed more from there on a gradually rising scale.
  11. JBond

    JBond Well-Known Member

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    National Sales Tax Gets Fresh Look; Rahm Emanuel's brother advises 10% VAT...

    Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look
    Levy Viewed as Way to Reduce Deficits, Fund Health Reform

    By Lori Montgomery
    Washington Post Staff Writer
    Wednesday, May 27, 2009



    With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

    Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

    At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

    "There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

    A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families.

    Liberals dispute that notion. "You could pay for it regressively and have people at the bottom come out better off -- maybe. Or you could pay for it progressively and they'd come out a lot better off," said Bob McIntyre, director of the nonprofit Citizens for Tax Justice, which has a health financing plan that targets corporations and the rich.

    A White House official said a VAT is "unlikely to be in the mix" as a means to pay for health-care reform. "While we do not want to rule any credible idea in or out as we discuss the way forward with Congress, the VAT tax, in particular, is popular with academics but highly controversial with policymakers," said Kenneth Baer, a spokesman for White House Budget Director Peter Orszag.

    Still, Orszag has hired a prominent VAT advocate to advise him on health care: Ezekiel Emanuel, brother of White House chief of staff Rahm Emanuel and author of the 2008 book "Health Care, Guaranteed." Meanwhile, former Federal Reserve chairman Paul A. Volcker, chairman of a task force Obama assigned to study the tax system, has expressed at least tentative support for a VAT.

    "Everybody who understands our long-term budget problems understands we're going to need a new source of revenue, and a VAT is an obvious candidate," said Leonard Burman, co-director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, who testified on Capitol Hill this month about his own VAT plan. "It's common to the rest of the world, and we don't have it."

    Seeking New Revenue

    The surge of interest in a VAT is testament to the extraordinary depth of the nation's money troubles. While some conservatives have long argued that a consumption tax would provide a simpler and more efficient alternative to the byzantine U.S. income tax code, this time it's all about the money.

    The federal budget deficit is projected to approach $1.3 trillion next year, the highest ever except for this year, when the deficit is forecast to exceed $1.8 trillion. The Treasury is borrowing 46 cents of every dollar it spends, largely from China and other foreign creditors, who are growing increasingly uneasy about the security of their investments. Unless Congress comes up with some serious cash, expanding the nation's health-care system will only add to the problem.

    Obama wants to raise income taxes for high earners and impose new levies on business, but those moves would not generate enough cash to cover the cost of health care, much less balance the budget, and they have not been fully embraced by Congress. Obama's plan to tax greenhouse-gas emissions could raise trillions of dollars, but again, Congress is balking.

    Key lawmakers are considering other ways to pay for health reform, including new taxes on sugary soda, alcohol and employer-provided health insurance. The last proposal could raise a lot of money -- nearly $1 trillion over the next five years, according to White House budget documents. But options on the table would raise a fraction of that sum. And while it might pay for health care, it would barely dent deficits projected to total nearly $4 trillion over the next five years and to grow rapidly in the future, as baby boomers draw on Social Security and Medicare.

    Enter the VAT, one of the world's most popular taxes, in use in more than 130 countries. Among industrialized nations, rates range from 5 percent in Japan to 25 percent in Hungary and in parts of Scandinavia. A 21 percent VAT has permitted Ireland to attract investment by lowering its corporate tax rate.

    The VAT has advantages: Because producers, wholesalers and retailers are each required to record their transactions and pay a portion of the VAT, the tax is hard to dodge. It punishes spending rather than savings, which the administration hopes to encourage. And the threat of a VAT could pull the country out of recession, some economists argue, by hurrying consumers to the mall before the tax hits.

    A VAT's Bottom Line

    What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, "100 Million Unnecessary Returns," Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 -- about 90 percent of households -- from the income tax and would lower rates for everyone else.

    And in a paper published last month in the Virginia Tax Review, Burman suggests that a 25 percent VAT could do it all: Pay for health-care reform, balance the federal budget and exempt millions of families from the income tax while slashing the top rate to 25 percent. A gallon of milk would jump from $3.69 to $4.61, and a $5,000 bathroom renovation would suddenly cost $6,250, but the nation's debt would stabilize and everybody could see a doctor.

    Sales Tax Gains Momentum

    Burman, who helped House Democrats craft an unsuccessful 2007 plan to repeal the alternative minimum tax, said he's received a number of phone calls from lawmakers interested in his idea, though "they can't quite imagine how to make it happen politically." Burman said the 25 percent rate has caused some sticker shock, and he's trying to figure out how to bring it down.

    Graetz's proposal drew an endorsement from Volcker, who last year called it "a sensible plan for reform." (Volcker did not respond to a request for comment.) It also has piqued the interest of Conrad, the Senate Budget Committee chairman who argues that it could be modified to accommodate Obama's pledge not to raise taxes on families who make less than $200,000 a year.

    "I think interest is quietly picking up," Graetz said. "People are beginning to recognize that the mathematics of the current system are just unsustainable. You have to do something. And a VAT has got to be on the table if you want to do something big and serious."

    Still, the Senate Finance Committee declined to include a VAT among the options it is considering to pay for health reform. And even VAT supporters doubt the tax will find a place among the tax-reform proposals the Volcker panel has been asked to produce by Dec. 4.

    Though the nation's fiscal outlook is grim, Burman said "the situation will have to get more desperate" before lawmakers are likely to consider a new levy aimed directly at the pocketbooks of every one of their constituents.

    Most lawmakers are still looking for "a painless source of revenue" to overhaul the health-care system and dig the nation out of debt, Burman said. "Who knows?" he added. "Maybe the tooth fairy will bring that to them."
  12. sacase

    sacase Well-Known Member

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    umm...where is the Value added?
  13. JBond

    JBond Well-Known Member

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    The value is to the democrat party when they redistribute more of our income in order to purchase more votes with freebies for deadbeats. Wilson and FDR set up the Dems to maintain power for decades. Obama is doing the same.
  14. Bach

    Bach Benched

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    I can't wait til November 2010
  15. Dallas

    Dallas Old bulletproof tiger

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    I hear that! :eek:hboy:
  16. MetalHead

    MetalHead Benched

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    We are our liberal friends tonight?
  17. Future

    Future Intramural Legend

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    Boy that's a harsh way to put it...

    but I think you're right.
  18. MetalHead

    MetalHead Benched

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    But,but Obama was going to cut taxes for 95% of the people.....
    Sheep.
  19. trickblue

    trickblue Old Testament... Zone Supporter

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    Given his promises of programs and services, anyone that believed that taxes weren't going to be raised, well I have some oceanfront property in Arizona for sale...

    It's one of those things that people should be able to read between the lines on...

    Bush spent too much, Obama is spending even more... it's common sense to realize what is about to happen to us in regards to taxes...

    Even the CBO told us, but it got swept under the rug by the MSM...

    Get back to me in two years if the cap & trade crap goes through... your electricity bill will triple at minimum...
  20. sbark

    sbark Well-Known Member Zone Supporter

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    ........heard a mention of "email tax" being bantered around as a income producer for the govt..........1 cents tax on every email......

    ......the "benefit" was that it would cut down on spam........Ever notice everything the Libs do is for our benefit......

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