Posted on 02/08/2016 7:44:14 PM PST by Helicondelta
Two Republican presidential candidates -- Sens. Ted Cruz, R-Texas, and Rand Paul, R-Ky. -- have proposed replacing much of the federal tax system with a VAT. Cruz's proposed VAT would have a 16 percent tax-inclusive rate, and Paul's proposed VAT would have a 14.5 percent tax-inclusive rate. Both VATs would be administered through the subtraction method rather than the credit invoice method used by most countries with VATs.
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The biggest problem with the Cruz and Paul plans is their pronounced lack of tax transparency. The senators have consistently described their proposed levies as business taxes rather than VATs and have underplayed or denied the burden that the VATs would place on workers. Moreover, their proposed VATs would be largely invisible to the public because they would not be listed on customer receipts or pay stubs.
The Cruz and Paul plans would also repeal the payroll and self-employment taxes that are earmarked to finance Social Security and Medicare Part A. The repeal would have problematic implications, which Cruz and Paul have not addressed, for Social Security's budgetary status and the design of the Social Security benefit formula.
(Excerpt) Read more at aei.org ...
Nothing conservative about a VAT.
And Cruz’s plan IS a VAT.
The Cruz plan is a Flat Tax, not a VAT.
I think the spin behind these talking points is that the Cruz plan includes a flat business tax, which gets passed on to consumers. But all business taxes do that. It is false to say every business tax is a VAT.
I hope you are not that gullible. The Cruz plan is a Flat Tax. A flat tax is not a VAT. These VAT stories are just dishonest talking points released the night before the NH primary.
Texas is taxing internet orders now. :-(
The VAT is an ass of an idea. A VAT and a sales tax combined is grabbing the ass with both hands sort of idea.
But with sales taxes it’s fairly easy, at least in Texas, to have a Tax-ID number so that your purchases as a business are frequently tax exempt.
Now, here are some of my tax related ideas to help you know where I’m coming from....
Sales taxes ONLY on the first retail sale of a product / personal property, or of a product reconditioned for sale in a formal retail venue. Thus there would be no taxes due on the sale of your old car, boat, what you sell at an estate sale or garage sale and so forth.
No taxes on the purchase of gold or silver ... ever. This because our so-called “legal tender” is actually not, the Constitution forbids the States to pay their obligations with anything but gold and silver coin. They should not be in the business of taxing the only money lawful for them to use even if we don’t use gold and silver coin for our money as we ought to.
While I flatly oppose inheritance taxes in ALL circumstances whatsoever, at a minimum these should only be ever applied to fungible assets. Either real assets or personal property, even if it’s a priceless work of art, should never be counted.
Likewise, no fan of income taxes here, only renumeration in a form that is fungible should ever be taxed ... it is simply not the basic function of people to fund their government just as all the money isn’t the government’s so that they can count a tax break as a subsidy. So as a consequence, people bartering would never have to be accounted for, nor would the value of having a company car or other non-fungable benefits.
I fully agree with Justice Bushrod Washington writing for Corfield v Coryell that it is a fundamental right to not be taxed more than other citizens. If a tax is on a valuation then all should pay the same percentage of that valuation, as it pertains to them. If it is a tax on an event, say a stamp act or admission to a State park, then all such valuations would be the same amount per person. Both progressive and regressive taxation are odious, vile situations. Rather a person’s circumstances should never be considered as to how they are taxed.
I would support the ability of Citizens, actual flesh-and-blood Persons ... not mere entities or even limited liability partnerships, to obtain and pass on to their heirs who are also Citizens, Allodial Title, both in city and countryside, and to provide a system whereby any ordinary total may become allodial ... probably by paying the State a fee on the valuation of the land in relation to property taxes currently being gathered. If a corporation, entity, of non-Citizen comes into possession of the land it’s Status is voided.
(I’m not particularly fond of property taxes either, as you may have noticed).
These sorts of propositions do several things which you may have noticed in addition to their obvious aspects: they reduce administrative overhead to some degree for example.
Also, though not a tax, I would support changes to our intellectual property laws as follows...
All time periods are the same as with technical patents on inventions. The one exception is ACTIVE trademarks ... but that simply means that the IP in question has to be kept in use ... so if Disney wants to keep their mouse they just gotta keep cranking out Mouse cartoons.
Flesh and blood persons should be able to obtain longer times of IP protections than any entity. This could simply take the form of, a second renewable time rather than just one renewal allowed by current law. A third might be nice too (i.e. maybe up to 60 years protection for a Person but only 30 for a corporation). Or their terms could just be longer. Entities could not buy IP rights past what would have applied had they been the ones to originally file, but they may, of course, lease the right to use a Person’s IP during the extended period not otherwise available to them). This is in acknowledgment that entities often have easier time raising funds to exploit IP, whereas there is a history of inventors having to plot along till they have no rights and also no ability to compete.
Then each state could target the taxes in the way they each saw fit. New York and California could tax only investment bankers and CEO's, the rest of the nation would be free to be more reasonable. But the point is that the taxing power would be closer, so you could alter it if enough people disagreed. The famous 47% non-paying democrat voting block might even disappear.
Yup. That’s why Libs hate the idea.
Really. Produce Trump’s tax plan that supports your argument. We’ll wait...
I believe Trump’s plan is a transition towards either a Flat tax or a Fair Tax. Regardless, no one yet has proposed anything that streamlines the tax code. Trump is. Furthermore, Trump does business in the UK and as such, would never propose a VAT.
Yes, you income taxed 40-50% of my earnings, now you want to take another 30% as I spend it.
Give me an example because I am merely quoting Milton Friedman who knew a bit about economics
And you aren’t the one writing the law or the implementation
The d partment of Presidential. Trump is the only democrat who can win. He is the democrat guarantee of single Payor, for all... Well, not for all. I agree his stupid statements are a way to deflect from his ignorance of substantive knowledge of everything. Maybe he could run with bill Clinton as his veep.. A perfect pair. Any man who even jokes about having sex with his own daughter, while running for prez, is exactly the democrats dream. He seems to have more sex on the brain than Bill... And equally nauseating.
You might have a hard time defining ‘proper’ these days.
Disregard the implementation details. Should the tax rate have a minimum threshold and curve or not?
Cruz’ tax ELIMINATES the corporate and payroll taxes and simplifies taxation greatly, which eliminates a MASSIVE amount of waste that will boost the economy.
http://taxfoundation.org/blog/ted-cruz-s-business-flat-tax-primer
In that sense, a subtraction-method value-added tax is actually just a simple combination of a sort of corporate income tax and an ordinary payroll tax. (Fittingly, Senator Cruz’s plan uses this VAT to eliminate the corporate income tax and the payroll tax.)
There is a simplicity and clarity to this way of doing things that I think could appeal to people; it certainly appeals to a lot of tax experts. It avoids concerns about people trying to re-label one kind of income as another kind, because everything is subject to the same rate.
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With this high VAT revenue (and much lower government spending than other OECD countries) the U.S. could sustain low income tax rates, such as the ten percent proposed by Senator Cruz.
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Ted Cruz has proposed combining the corporate income tax, the payroll tax, and some of the income tax into a single, larger, broader tax assessed on businesses. While the tax would be new in many respects, it would produce revenues from the same general kinds of economic activity taxed by the things it replaces.
It would not be similar to existing sales taxes, or the VATs in Europe, because it would not be levied on a transaction-by-transaction basis.
Not true. Rand and Cruz both had massive tax overhaul plans. From flat taxes to NRST-style consumption taxes that completely replace the current tax morass...
More is the pity.
I would actually honor my oath of office and not FDR’s legacy....
I like a SMALL tax. If we have a SMALL government, the details of the tax are less important, because it will be SMALL.
Well, I am a 75 year old white male. I just this month retired so no more payroll taxes. So will they figure out a way to keep taxing my wrinkled behind until I finally croak?
HELL YEAH!!!
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