Fat VAT! A Value Added Tax? Non-political but interesting for all sides to consider..

[SintonFan]

Please keep this non-political!
Many editorials are saying a National Value Added(VAT) Tax is gaining ground. I find that hard to believe. Do any of you know what a VAT is? It's a tax on everything you buy, but you might not see it. It is not just inflationary but a big reason why European countries don't grow like we do and know all about the word "stagflation".
As a business owner:
Let's say I sell a widget for $1.75(as I do now). You the buyer, buys a widget for exactly that sum of money and pay the according taxes(if applicable).
Under the VAT, as a business owner it changes:
Between the producer, supplier and me the retailer, the cost of my widget will suddenly be up to about 25% more because a Value Added Tax is aimed at where you can't see the actual tax. The tax itself is there before the consumer sees it; it is between the producer being taxed to sell his/her product to the supplier, the supplier being taxed to sell his/her product and finally the retailer being taxed to sell his/her product. So because the chain of the "sell" is taxed the consumer only notices a much larger price. The widget I sell was $1.75... it is now $2.19 with a VAT. Sneaky Sneaky!
The tax is mandatory when put into place and will lead to much higher inflation(at 25%):
A $10 shirt will be $12.50
A quart of oil at $3.00 will be $3.75
A $20,000 Honda will be $25,000
A $1000 computer will be $1250
This all is without considering food. Very very Sneaky.
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I'll post a link after the entire article from the Caller Times:

A national value added tax gains ground

With the federal government running trillion dollar deficits, revenues flat and President Barack Obama’s ambitious health-care plan to pay for, it was inevitable that the value added tax would make one of its periodic appearances in the nation’s capital.

The VAT is a sort of national sales tax, although it differs from the typical sales tax in that the VAT is imposed only on the increase in value as it goes from producer to wholesaler to retailer to the consumer, who ultimately bears the entire cost.

The VAT, its critics will be delighted to know, is an invention of the French who have had one since the 1950s. The United States is one of a handful of major nations that does not have one. The European nations do, running in the 18 percent to 25 percent range. Canada has a relatively modest VAT — called the Goods and Services Tax — of 5 percent, with exceptions for things like groceries.

“The Washington Post” notes that there is increased chatter about the VAT among tax experts, some of whom have pressed the idea on Treasury Secretary Timothy Geithner. And the chairman of the Senate Budget Committee, Sen. Kent Conrad, D-N.D., is said to be open to the idea.

The disadvantages of the VAT are that it is regressive, initially inflationary and easy for lawmakers to raise incrementally.

The advantages are that it can be relatively simple to administer, hard to evade and it raises an absolute ton of money. Also, in theory it would allow us to do away with large parts of the income tax.

“The Post” cites a paper published in the “Virginia Tax Review” that says a 25 percent VAT, a level common in Western Europe, would raise enough money to balance the budget, pay for health-care reform, exempt millions of families from the income tax and allow the top income tax rate to be slashed to 25 percent.

With other ideas for major revenue raisers, like the cap-and-trade scheme for greenhouse gases, losing momentum, the VAT will likely start to pick up tacit support in Congress. But, even assuming it could be sold to the voters, the VAT makes sense only as part of broad-scale tax reform and simplification. Otherwise, we could end up with the worst of all: three taxes — the income, the alternative minimum and the value added.
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Link (http://www.caller.com/news/2009/may/30/national-value-added-tax-gains-ground/)
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Ask yourself, do you want a FAT VAT?

[SWMustang]

Originally posted by SintonFan
Please keep this non-political!
Many editorials are saying a National Value Added(VAT) Tax is gaining ground. I find that hard to believe. Do any of you know what a VAT is? It's a tax on everything you buy, but you might not see it. It is not just inflationary but a big reason why European countries don't grow like we do and know all about the word "stagflation".
As a business owner:
Let's say I sell a widget for $1.75(as I do now). You the buyer, buys a widget for exactly that sum of money and pay the according taxes(if applicable).
Under the VAT, as a business owner it changes:
Between the producer, supplier and me the retailer, the cost of my widget will suddenly be up to about 25% more because a Value Added Tax is aimed at where you can't see the actual tax. The tax itself is there before the consumer sees it; it is between the producer being taxed to sell his/her product to the supplier, the supplier being taxed to sell his/her product and finally the retailer being taxed to sell his/her product. So because the chain of the "sell" is taxed the consumer only notices a much larger price. The widget I sell was $1.75... it is now $2.19 with a VAT. Sneaky Sneaky!
The tax is mandatory when put into place and will lead to much higher inflation(at 25%):
A $10 shirt will be $12.50
A quart of oil at $3.00 will be $3.75
A $20,000 Honda will be $25,000
A $1000 computer will be $1250
This all is without considering food. Very very Sneaky.
.
I'll post a link after the entire article from the Caller Times:

.
Link (http://www.caller.com/news/2009/may/30/national-value-added-tax-gains-ground/)
.
Ask yourself, do you want a FAT VAT?


If the federal income tax is repealed then yes I would rather have this. If you want to pile this on top of federal, then no.

[Blastoderm55]

So basically a federal sales tax to coincide with our state and local sales tax (where applicable), eh? They can try it if they want but as is always the case, increasing costs are met with decreasing demand for both the buyer and the seller.

Can the government just play the lottery? It's done dumber things with our money.

[JasperDog94]

Originally posted by Blastoderm55
Can the government just play the lottery? It's done dumber things with our money. You wouldn't be referring to the billions they just wasted on the recent bailouts would you?:p :( :(

[rockdale80]

It is a really good idea too.:rolleyes:

If a person has a lower income, they will pay more in taxes proportionate to their income in relation to a person at the opposite end of the spectrum. Taking a more proportionate amount of money from the middle to lower class seems like a great idea to promote the economy. Ideas like this, that people think seem logical, are essentially rich cronies selling a horrible idea and people not analyzing the impact it would have on this country and the amount they would pay in taxes. :confused: :confused:

[Farmersfan]

Originally posted by rockdale80
It is a really good idea too.:rolleyes:

If a person has a lower income, they will pay more in taxes proportionate to their income in relation to a person at the opposite end of the spectrum. Taking a more proportionate amount of money from the middle to lower class seems like a great idea to promote the economy. Ideas like this, that people think seem logical, are essentially rich cronies selling a horrible idea and people not analyzing the impact it would have on this country and the amount they would pay in taxes. :confused: :confused:


Oh Yea! I think we all would agree that EQUALITY is a terrible idea!!!!!:doh: :doh: :doh:

[icu812]

Originally posted by SWMustang
If the federal income tax is repealed then yes I would rather have this. If you want to pile this on top of federal, then no.

I agree if we are talking a sales tax but this VAT isn't the same thing. But still if it gets rid of the income tax the I'd be for it (which isn't what is being talked about, they would add it to income tax). Income tax only taxes a few which is unfair. Sales tax gets everybody which is only fair. I don't mind paying extra for stuff I really don't have to have. I do mind paying for somebody elses junk via the gov. taking my income and giving it to somebody who didn't work for it. I find it tragic we are so far removed from the principles of our founding fathers.

[SintonFan]

Originally posted by Farmersfan
Oh Yea! I think we all would agree that EQUALITY is a terrible idea!!!!!:doh: :doh: :doh:
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I can see the sarcasm in his post...
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Do you agree with the VAT Tax?

[rockdale80]

Originally posted by Farmersfan
Oh Yea! I think we all would agree that EQUALITY is a terrible idea!!!!!:doh: :doh: :doh:

It is a tax cut for the rich and distributed to middle and lower class americans. There are plenty of things we can do to replenish our economy, but this is a terrible idea. It sounds good on paper because it seems simple, but when you really consider the increase most americans would see in their taxes it isnt.

[SintonFan]

Originally posted by rockdale80
It is a tax cut for the rich and distributed to middle and lower class americans. There are plenty of things we can do to replenish our economy, but this is a terrible idea. It sounds good on paper because it seems simple, but when you really consider the increase most americans would see in their taxes it isnt.
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I disagree. I think that the VAT is a tax on everyone and everything...
No one person can escape this and the VAT tax will hurt the poor the most because it is inherently inflationary.
A flat tax is the only tax that can be described as equally distributed to all, since everyone pays the same rate.
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You need to CAPITALIZE "Americans".:D lol @ me being the grammar police.:doh: :p :D

[SWMustang]

Originally posted by SintonFan
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I disagree. I think that the VAT is a tax on everyone and everything...
No one person can escape this and the VAT tax will hurt the poor the most because it is inherently inflationary.
A flat tax is the only tax that can be described as equally distributed to all, since everyone pays the same rate.
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You need to CAPITALIZE "Americans".:D lol @ me being the grammar police.:doh: :p :D

I'm all for a flat tax too, but I'm sure Rockdale80 would agree - it's a regressive tax as well.

[rockdale80]

Originally posted by SWMustang
I'm all for a flat tax too, but I'm sure Rockdale80 would agree - it's a regressive tax as well.

Why would it be beneficial to our economy for the middle and lower class to pay more in taxes? I am confused how people talk about wanting tax cuts and then think something like this is a good idea. Of course that is me speculating that most members of this board are middle class americans. THIS WILL RAISE TAXES FOR EVERYONE BUT THE TOP 10%.

Splendid idea...

[SWMustang]

Originally posted by rockdale80
Why would it be beneficial to our economy for the middle and lower class to pay more in taxes? I am confused how people talk about wanting tax cuts and then think something like this is a good idea. Of course that is me speculating that most members of this board are middle class americans. THIS WILL RAISE TAXES FOR EVERYONE BUT THE TOP 10%.

Splendid idea...

I thought 40% of the population doesn't pay taxes? For them, taxes would increase from 0. Why do you think the middle class would pay more in taxes? I have a target of 10% - I don't know how realistic that is.

[rockdale80]

Originally posted by SWMustang
I thought 40% of the population doesn't pay taxes? For them, taxes would increase from 0. Why do you think the middle class would pay more in taxes? I have a target of 10% - I don't know how realistic that is.

It is a 25% tax on every single dollar you spend. All services, consumer goods, groceries, and everything else. That 40% you are talking about includes children, college students, and elderly. Under this plan they arent protected. If you have kids you did get a deduction on before you will not any more. Tax exempt non-profits and churches will be paying taxes, etc. It is a big crazy mess and the best way to sum it up is a tax cut for rich folks. I think your 10% is a little off the mark.

[LH Panther Mom]

VAT=value added tax.

I heard a very good explanation yesterday of how it works. Ex: a manufacturer of seats for a Chev Silverado currently pays no taxes on the raw materials ordered. The seat is assembled, shipped to the plant with no taxes paid. Cost of raw materials = $30 (ex), value of the seat once assembled & shipped = $100. The value added is $70, with no taxes paid. Tax is not collected until the Silverado is sold.

With the VAT, the manufacturer will pay the VAT on the $70. Sales tax is still collected on the vehicle, but either the manufacturer has to raise the rate in order to clear the same amount, which makes the overall cost of the vehicle go up, OR they lose money.

[rockdale80]

Originally posted by LH Panther Mom
VAT=value added tax.

I heard a very good explanation yesterday of how it works. Ex: a manufacturer of seats for a Chev Silverado currently pays no taxes on the raw materials ordered. The seat is assembled, shipped to the plant with no taxes paid. Cost of raw materials = $30 (ex), value of the seat once assembled & shipped = $100. The value added is $70, with no taxes paid. Tax is not collected until the Silverado is sold.

With the VAT, the manufacturer will pay the VAT on the $70. Sales tax is still collected on the vehicle, but either the manufacturer has to raise the rate in order to clear the same amount, which makes the overall cost of the vehicle go up, OR they lose money.

So the same seat will be taxed twice? I am not versed on the impact to companies but I have researched the impact on people and I think this is a terrible idea.

[Z motion 10 out on 2]

I'm for an overhaul of our tax system. The current system is terrible. I do like the idea of a national sales tax in place of the income tax. (NOT for the VAT).

Everyone pays taxes, the rich pay more if they buy more, the poor pay some taxes as they do buy things (like flat screens and such), illegals pay taxes because they buy things too. Makes it harder to cheat -- as our current system encourages cheating.

I don't think we should reward people for having kids and giving the family a deduction for it. Eliminate the income tax altogether and go with a national sales tax. Seems much easier and fair.

There you have it from an Independent.

[crabman]

If you think VAT is a bad idea, just wait until Cap and Trade come through. Your $200 electric bill suddenly goes to $280 to $300. That one will ripple through the economy and his the lower class especially hard. Obama will insist it is necessary to make the evil corporations cut their carbon emissions when in reality it will do nothing of the sort. It is strictly a way to put more money in the federal coffers to spend on social programs. Hidden just like the VAT, it will enable the Fed to continue to grow unabated. Ain't Socialism great?

[STANG RED]

Originally posted by crabman
If you think VAT is a bad idea, just wait until Cap and Trade come through. Your $200 electric bill suddenly goes to $280 to $300. That one will ripple through the economy and his the lower class especially hard. Obama will insist it is necessary to make the evil corporations cut their carbon emissions when in reality it will do nothing of the sort. It is strictly a way to put more money in the federal coffers to spend on social programs. Hidden just like the VAT, it will enable the Fed to continue to grow unabated. Ain't Socialism great?

The one silver lining is, once people get a real good taste of socialism, and open their eyes to reality, they will be ready to rebel against it. Problem is, the other side hasnt come up with a good viable alternative, and have recently proven they arent to be trusted either. We truely need a third party that is reflective of core Amercan values, and will actually work toward acheiving policies that address them.

[sinton66]

" Tax upon a tax".

[rockdale80]

Originally posted by STANG RED
The one silver lining is, once people get a real good taste of socialism, and open their eyes to reality, they will be ready to rebel against it. Problem is, the other side hasnt come up with a good viable alternative, and have recently proven they arent to be trusted either. We truely need a third party that is reflective of core Amercan values, and will actually work toward acheiving policies that address them.

Or we as Americans can hold our elected officials accountable with the power of a vote. Most people cant even name their state rep or their senators so they just vote based on name familiarity. Getting rid of the lobbyists would also do a tremendous amount of good. I think if we got corporate lobbyists out of Washington the lawmakers would start doing good for the people that put them in office until they find another reason not to....

[SintonFan]

PLEASE KEEP THIS NON-POLITICAL!
Talk about the issues please...
I implore you! It is important to talk about what is facing us and let everyone else judge what is facing them as individuals or families.:) :) :)

[rockdale80]

Originally posted by SintonFan
PLEASE KEEP THIS NON-POLITICAL!
Talk about the issues please...
I implore you! It is important to talk about what is facing us and let everyone else judge what is facing them as individuals or families.:) :) :)

I havent seen any partisan bickering, unless I missed something :confused: :confused:

[SWMustang]

Originally posted by rockdale80
Or we as Americans can hold our elected officials accountable with the power of a vote. Most people cant even name their state rep or their senators so they just vote based on name familiarity. Getting rid of the lobbyists would also do a tremendous amount of good. I think if we got corporate lobbyists out of Washington the lawmakers would start doing good for the people that put them in office until they find another reason not to....

I don't know what the answer is, but when everyday Americans have to pay people to do their taxes - that's a problem. Look at all the Obama appointees that had tax problems. I don't believe they were evil people with malicious intent but the fact remains that tax revenue went uncollected (intentionally or not) from very wealthy people. The tax code and the IRS should be simplified and streamlined and the only way you can do that is apply tax codes across the board.

In my dream world, we would all be taxed 10 percent - deducted straight from your pay check. No need to file an income tax return - done.

[waterboy]

:doh: I can't believe ANY American would fall for this type of tax! I'm sorry, but anybody who believes this is a smart tax is not thinking straight. How many times has the government actually lowered taxes, or abolished one tax without making MORE money on a new one? I hope the "people" are smart enough to figure this out, because this tax, if passed, will cost YOU a whole lot more money in the long run.......maybe even in the short run.:thinking:

[STANG RED]

Originally posted by SWMustang
I don't know what the answer is, but when everyday Americans have to pay people to do their taxes - that's a problem. Look at all the Obama appointees that had tax problems. I don't believe they were evil people with malicious intent but the fact remains that tax revenue went uncollected (intentionally or not) from very wealthy people. The tax code and the IRS should be simplified and streamlined and the only way you can do that is apply tax codes across the board.

In my dream world, we would all be taxed 10 percent - deducted straight from your pay check. No need to file an income tax return - done.

I like Mike Huckabee's idea of a flat comsumers tax on everything, and abolishing the IRS completely.
Everybody that buys anything will contribute, be them citizens or not, legal or not. Those who have more buy more, so they contribute more, and vice versa. Seems simple enough to me. Too simple to be minipulated by the politicians though, so we'll never see it. Unless we can get those low life suckers scared for their jobs.

[garciap77]

Originally posted by Z motion 10 out on 2
I'm for an overhaul of our tax system. The current system is terrible. I do like the idea of a national sales tax in place of the income tax. (NOT for the VAT).

Everyone pays taxes, the rich pay more if they buy more, the poor pay some taxes as they do buy things (like flat screens and such), illegals pay taxes because they buy things too. Makes it harder to cheat -- as our current system encourages cheating.

I don't think we should reward people for having kids and giving the family a deduction for it. Eliminate the income tax altogether and go with a national sales tax. Seems much easier and fair.

There you have it from an Independent.

I like you Idea, but then the rich would have to pay more taxes and you know that is not going to happen! Why? Because the rich run this country!

[garciap77]

Originally posted by rockdale80
Or we as Americans can hold our elected officials accountable with the power of a vote. Most people cant even name their state rep or their senators so they just vote based on name familiarity. Getting rid of the lobbyists would also do a tremendous amount of good. I think if we got corporate lobbyists out of Washington the lawmakers would start doing good for the people that put them in office until they find another reason not to....


I agree! Get rid of the lobbyists! That alone would do so much for America to get on the right track!

[garciap77]

Originally posted by SWMustang
I don't know what the answer is, but when everyday Americans have to pay people to do their taxes - that's a problem. Look at all the Obama appointees that had tax problems. I don't believe they were evil people with malicious intent but the fact remains that tax revenue went uncollected (intentionally or not) from very wealthy people. The tax code and the IRS should be simplified and streamlined and the only way you can do that is apply tax codes across the board.

In my dream world, we would all be taxed 10 percent - deducted straight from your pay check. No need to file an income tax return - done.

:clap: :clap: :clap:

Would you also inculde a 5% sale taxes on everything you buy?

[LH Panther Mom]

Originally posted by rockdale80
So the same seat will be taxed twice? I am not versed on the impact to companies but I have researched the impact on people and I think this is a terrible idea.
That's the way Neil Bortz explained it. And yeah - agreed on the terrible idea. :doh:

[rockdale80]

Originally posted by STANG RED
I like Mike Huckabee's idea of a flat comsumers tax on everything, and abolishing the IRS completely.
Everybody that buys anything will contribute, be them citizens or not, legal or not. Those who have more buy more, so they contribute more, and vice versa. Seems simple enough to me. Too simple to be minipulated by the politicians though, so we'll never see it. Unless we can get those low life suckers scared for their jobs.

The flat tax is the almost the exact same idea. This tax impacts lower and middle class americans more than the top 10%. It is a tax break for the wealthy. Why not tax corporations that ship out jobs overseas instead of rewarding them with tax breaks to create American jobs? That seems more logical to me. :)

[SWMustang]

Originally posted by garciap77
:clap: :clap: :clap:

Would you also inculde a 5% sale taxes on everything you buy?

No - just fix it where everyone pays their fair share of Taxes directly from their payroll checks. For instance your first 50K is taxed at 5% 50-100K taxed at 10%: 100-150 taxed at 15% etc..
Obviously the pay ranges and the percentage taxed are just for example - the real numbers would probably be different. Taxes would be easier and it wouldn't be regressive. No income tax filing or complicated instructions. It would simplify the whole process. Why is this so hard of a concept?