I could agree with much of the plan but I don't think I would support the VAT, especially in a recession why would you want to increase the cost of goods and thereby reduce sales? A VAT on only imported goods though would be a great idea, IMHO.

Danni:

"Some will argue that a consumption tax would raise prices, maybe even unleash inflation, and hurt the economy. Many economists, however, believe that a modest value-added tax (VAT) can actually boost the economy in the long run. It encourages saving and investing over consumption and debt -- the twin habits that helped push the country into the Great Recession of 2008. Though savings rates are going up, we are still "unwinding" our personal debts and have a way to go. We can put more money in people's pockets by lowering income taxes but encourage saving and investment with a consumption tax."

I believe taxing any magazine or newspaper that advocates a tax on anyone/thing else would help.

I read that part Taxman, I just don't think it would work out well in a recession. Hell, I hear all the time from Republicans, "you don't raise taxes in a recession." They are talking about the income tax rates rich people pay which really won't effect consumption because they generally buy whatever they want regardless but a consumption tax on moderate income people will definitely effect their purchasing decisions such as whether or not to buy a new car. I don't think an increase in savings will help us climb out of recession, we need increased demand for goods not less. IMHO.

An increase in savings is not good for the nation now, but it is in our best interests in the long term.

For far too long America has overconsumed and that is now coming back to bite us in the ass.

Until real wages start growing (which they will not with greedy ceo's setting the rules) this economy will not grow.

The 90's and 2000's were debt bubbles financing spending growth, it was unsustainable then and it is unsustainable in the future. When I hear pols crying about banks "not lending" it sickens me. What they are really calling for is a return to the fast and loose credit that got us into this mess.

Over 50% of the people in this nation have less than $10,000 saved for retirement.

That is gonna be the next crisis.

I could agree with much of the plan but I don't think I would support the VAT, especially in a recession why would you want to increase the cost of goods and thereby reduce sales?

so raising taxes by tax cuts out is okay then???

the problem with the vat tax is that its hidden and will NOT remain at its initial rate...dont forget..it will be run by the same people who "borrow' social security money.

"Until real wages start growing (which they will not with greedy ceo's setting the rules) this economy will not grow."

Until free trade is a memory this economy will only reward the CEO class.

A VAT would be a disaster.

I think instead of an income tax and other item specific taxes such as taxes on sodas and cigs, a national sales tax would be more fair. The more you spend, the more you pay. Add to that an excise tax on luxury items and services. A typical hotel room gets a sales tax rate and a suite or five star room gets the added luxury tax. The tax rate would be fairly low because the sales tax would be on everything. The poor could apply for an exemption card that they could use on qualifying purchases.

Not to mention billions of hours wasted analyzing the tax code and the tax dollars saved by the reduction of the IRS.

RIGHTISRIGHT - Just a question. Would a VAT be good if we eliminated the federal income tax and only had the VAT? [Not that I think the govt would do that]

Not to mention billions of hours wasted analyzing the tax code and the tax dollars saved by the reduction of the IRS.

When I read statements like these it leads me to believe that the poster either comes from a state with no sales tax or that they have never dealt with sales/use tax compliance. Go ask your local convenience store owner about his sales/use tax burden. The fact is a sales/use tax is more fact intensive than an income tax. The IRS would more likely become a bigger institution and more intrusive. Think of this - the IRS coming into your home and analyzing everything you own to make sure you actually paid sales tax on those items.

I'm with RiR, a VAT would be disasterous.

Would a VAT be good if we eliminated the federal income tax and only had the VAT?

The answer to that question depends on what your ultimate goal is.

I suspect the talk of VAT is really an attempt to prevent an increase in income tax rates for rich folks. I think that eliminating the itemized deductions would be a good idea but with trillions of dollars worth of debt acruing interest we need to also raise rates on those who can well afford it. I think everyone needs to ask themself if they would rather pay more tax themselves or leave more debt for their kids?
It is definitely going to be one or the other, as it is now our kids will compare us boomers very unfavorably to our parents generation and rightly so. We have a duty to at least put the nation back on the same financial footing it was on when we came of age, that would mean virtually no debt.

An itemized deduction was the incentive for me buying an efficient AC / Furnace this year. I would have went with something cheaper otherwise. Why get rid of those?

Some will argue that a consumption tax would raise prices, maybe even unleash inflation, and hurt the economy. Many economists, however, believe that a modest value-added tax (VAT) can actually boost
#2 | Posted by taxman

It's pathetic. Haven't these economists fucked up the economy enough. They have a worse prediction record than the National Weather Service.

And I would like to point out that not only would the VAT apply to the sale of goods, but it is highly likely that some services would be subject to the VAT (doctor visit, labor charged by mechanics, lawyer fees, etc.).

is a vat tax a tax that's placed on,say a refrigerator at every stage of development from start to finish?

#18 | Posted by semtex111 at 2010-09-01 06:01 PM | Reply | Flag:

In some jurisdictions, yes.

#16 | Posted by Ray

It's pathetic. Haven't these economists fucked up the economy enough. They have a worse prediction record than the National Weather Service.
--------------------
Ray you didn't know the purpose of an economist to make psychics look good.

Texas uses a sales tax system, and real estate taxes, to generate revenue, and that has served the state very well.

Not saying it work on a National level, but it's worth looking into.

"Texas uses a sales tax system, and real estate taxes, to generate revenue, and that has served the state very well."

I'm quite sure most millionaires in Texas would agree with you, the working poor not so much. Florida uses much the same tax system, the sales tax is very regressive and the property tax now has shrunk so much that the state is cutting back services.

How about simply eliminating the income tax altogether? Who the hell ever thought this was a good idea was delusional to begin with.

#21 | Posted by danni

I'm quite sure most millionaires in Texas would agree with you, the working poor not so much. Florida uses much the same tax system, the sales tax is very regressive and the property tax now has shrunk so much that the state is cutting back services.
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Texas has one of the best economies, and relatively speaking a low cost of living. Both are a benefit to the poor and the middle class.

"How about simply eliminating the income tax altogether? Who the hell ever thought this was a good idea was delusional to begin with."

Yeah, expecting rich people to pay more....just crazeeeeee!
Wasn't like this nation created the largest middle class in the world after starting an income tax, wasn't like we built the largest industrial capacity in the world while we had some of the highest income tax rates in the world.

Still like a flat tax like Pennsylvania has had for decades.

Danni:

"Some will argue that a consumption tax would raise prices, maybe even unleash inflation, and hurt the economy. Many economists, however, believe that a modest value-added tax (VAT) can actually boost the economy in the long run. It encourages saving and investing over consumption and debt -- the twin habits that helped push the country into the Great Recession of 2008. Though savings rates are going up, we are still "unwinding" our personal debts and have a way to go. We can put more money in people's pockets by lowering income taxes but encourage saving and investment with a consumption tax."

#2 | Posted by taxman at 2010-09-01 12:08 PM | Reply | Flag:

I argue that you give them an inch, they'll take a mile. We introduce VAT on any level and they'll look to extend it every few years.

#26 | Posted by daniel_3
I argue that you give them an inch, they'll take a mile. We introduce VAT on any level and they'll look to extend it every few years.
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If I'm not mistaken didn't FDR say the income tax would go away after WWII.

An increase in savings is not good for the nation now, but it is in our best interests in the long term.

#5 | Posted by 726

Saving money BAD!!!
Spending money GOOD!!!

#28 | Posted by Sniper

Comprehension BAD!!!

If you want a VAT the Dumbocrats only have until November. Tick Tock. Time is running out

"Tick Tock."

The clock in the croc!!

For a fairly liberal news rag & this idea coming from a long term committed progressive, I have to say, this idea isn't 1/2 bad. What was proposed would in effect simulate business activity, specifically from small & medium business. It would also make things very simple both from a personal & business operation standpoint. Any additional cost to a business in taxes would more than likely be offest (& then some) by admin savings. Large Corpoations would end up paying more in taxes, as they are the only ones in the business world that can effectively run away from current tax code (while small & medium businesses pay a much higher % overall).

Total Scam.

The Government would reduce some taxes to get a VAT tax in place, and then start marching BOTH income and VAT taxes up "temporily" to "solve the current crisis".

Meanwhile, unless we get a change in the House and Senate and the current Marxist in the Whitehouse - spending will continue out of control.

Even if we do manage to elect fiscal Conservatives, we'll have to watch them like hawks to make sure they follow through and don't get power drunk.

Show me progress on the spending side of the equation before we start inventing new ways to take money from the people.

"Meanwhile, unless we get a change in the House and Senate and the current Marxist in the Whitehouse - spending will continue out of control."

Too stupid to realize that most of the debt was run up by the exact folks he wants to put back in charge.

A VAT is evil. It is a tax hidden in the cost of production, so you never know what it really is.

If Congress wants more money (as it always does) it just adds .003 to the VAT. You never see it because it is hidden in the price of everything.

With a sales tax you see it every time you buy something.

Danni sez: "Too stupid to realize that most of the debt was run up by the exact folks he wants to put back in charge."

Danni, your president spent more than the cost of the Iraq war in the FIRST 6 MONTHS of his regime, blowing the money on NOTHING more than expanding this ever-burgeoning, suffocating Government.

No stimulus, no jobs.

Yours is a transparent tax-and-spend liberal diversion.

Where does this blind faith in Government come from?

You sucking at the public trough?

Also ignored sentence that followed:

"Even if we do manage to elect fiscal Conservatives, we'll have to watch them like hawks to make sure they follow through and don't get power drunk."

For power drunk examples, please see Harry Reid and Nancy Pelosi.

I disagree with the premise that the problem is taxes(revenue). The problem is spending period. Our government has over reached and over spent. It has overcommitted to too many people and too many projects. A lot of things we do we say "It looks good on paper but...". What the government is doing doesn't even look good on paper. The way Social Security is set up it fits the absolute definition of a Ponzi Scheme. Allowing government workers to put in their 20 and collect a full pension at the age of 40+ for the rest of their lives is unsustainable regardless of the Utopia you dream we live in. Protecting Europe from who the hell know now at our expense is outrageous. The list goes on and on and on.

The bottom line is it is the spending stupid!!!

is a vat tax a tax that's placed on,say a refrigerator at every stage of development from start to finish?

#18 | Posted by semtex111

A Value Added Tax is applied everytime value is added to an item. That's where the name comes from. Now......... Politicians being what they are will make it complicated beyond belief just like they did the income tax. They fuck up everything they touch.