Winston Smith
04-29-2010, 01:17 PM
Vat taxes, if imposed, will probably reach 10%-20% (comparing to Europe), yet right now the Obama’s economic team is rumored to be toying with a 5% tax (NY Times). This would apply to the VALUE ADDED at each stage of production, then passed on from businesses to consumers (or more businesses— then consumers). This tax is heavily criticized for being “regressive,” that is, it unfairly taxes middle class and low-income families.
Consider the gap: if 50% of your income is spent on everyday goods and services imposed under a grand encompassing tax—such as VAT—then how does this compare to a family with a significantly higher income? Say, a family where only 5% of their income is used for everyday goods and services? In this way, the tax unfairly burdens the poor (for the most part: a gallon of milk cost the price of a gallon of milk, etc.). Without complicated regulations (i.e. Are you poor and need groceries? Well, maybe we’ll consider those purchases exempt—just for you—in the future…), this issue will not be addressed. And we all know how much politicians love to regulate endlessly in vain attempt to justify the absurd amount of time they waste determining our future— presumable for our betterment, of course.
Economist and best-selling author Thomas Sowell said that the advantage of a VAT, “from the standpoint of the officials who impose it, is that the total amount that the taxes add to the final price paid by the consumer is not apparent, as it is with a sales tax, for example. In general, the less visible a tax is, the more revenue can be collected without resistance or electoral retribution by the voters.” CNS News (http://www.cnsnews.com/news/article/64515)
That’s right, it is easier to hide from the consumer which means less “electoral retribution by the voters” (no wonder politicians love it).
THE FUNNIEST THING ABOUT THIS IS: Our economy CRASHED BECAUSE of the derivative markets, right? By definition, this market makes $$ by clever exchange of various financial contracts, i.e. business that DOES NOT ADD VALUE. That was the problem. If they "added value" to ANYTHING then perhaps our economic situation wouldn't be so devastating (after all, we would have an abundance of product). In light of this fact, does it makes sense that adding "value" to things may be the requisite for a new tax?
Thankfully some are aware of what is really going on. One congressional candidate, in particular, is taking action preemptively. Pelosi challenger John Dennis recently signed (http://www.johndennis2010.com/blog/2010/april/john-dennis-signs-taxpayer-protection-pledge-ca-08) the Taxpayer Protection Pledge sponsored by Americans for Tax Reform (ATR - read their report on VAT (http://www.atr.org/obama-floats-vat-br-admission-explains-a4814)).
Consider the gap: if 50% of your income is spent on everyday goods and services imposed under a grand encompassing tax—such as VAT—then how does this compare to a family with a significantly higher income? Say, a family where only 5% of their income is used for everyday goods and services? In this way, the tax unfairly burdens the poor (for the most part: a gallon of milk cost the price of a gallon of milk, etc.). Without complicated regulations (i.e. Are you poor and need groceries? Well, maybe we’ll consider those purchases exempt—just for you—in the future…), this issue will not be addressed. And we all know how much politicians love to regulate endlessly in vain attempt to justify the absurd amount of time they waste determining our future— presumable for our betterment, of course.
Economist and best-selling author Thomas Sowell said that the advantage of a VAT, “from the standpoint of the officials who impose it, is that the total amount that the taxes add to the final price paid by the consumer is not apparent, as it is with a sales tax, for example. In general, the less visible a tax is, the more revenue can be collected without resistance or electoral retribution by the voters.” CNS News (http://www.cnsnews.com/news/article/64515)
That’s right, it is easier to hide from the consumer which means less “electoral retribution by the voters” (no wonder politicians love it).
THE FUNNIEST THING ABOUT THIS IS: Our economy CRASHED BECAUSE of the derivative markets, right? By definition, this market makes $$ by clever exchange of various financial contracts, i.e. business that DOES NOT ADD VALUE. That was the problem. If they "added value" to ANYTHING then perhaps our economic situation wouldn't be so devastating (after all, we would have an abundance of product). In light of this fact, does it makes sense that adding "value" to things may be the requisite for a new tax?
Thankfully some are aware of what is really going on. One congressional candidate, in particular, is taking action preemptively. Pelosi challenger John Dennis recently signed (http://www.johndennis2010.com/blog/2010/april/john-dennis-signs-taxpayer-protection-pledge-ca-08) the Taxpayer Protection Pledge sponsored by Americans for Tax Reform (ATR - read their report on VAT (http://www.atr.org/obama-floats-vat-br-admission-explains-a4814)).