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Another proposal for a hidden VAT
aei.org ^ | 10-29-2015 | Alan D. Viard

Posted on 10/29/2015 10:37:27 PM PDT by Citizen Zed

Like Senator Paul (and Herman Cain in 2011), Senator Cruz shies away from the V word. In his Wall Street Journal op-ed, he calls his VAT a "Business Flat Tax." Rather than saying that each business would pay tax on its value added, he says that it would pay tax on its "gross receipts from sales of goods and services, less purchases from other businesses, including capital investment" - a precise, but not very transparent, definition of value added. As the Tax Foundation and a Cato Institute scholar point out, Cruz's proposed tax, like Paul's proposed tax, is a "subtraction-method value added tax."

Scaling back the income tax system and instituting a VAT would have advantages and disadvantages. Thanks to their VAT revenue, the Paul and Cruz plans achieve deeper income tax cuts, with smaller revenue losses, than other Republican presidential candidates' tax plans. A VAT is much more growth-friendly than the income tax because it does not penalize saving and investment. However, it places more of the tax burden on those who are less well off. And, giving the government another major revenue source might make it harder to restrain entitlement spending growth.

(Excerpt) Read more at aei.org ...


TOPICS: Chit/Chat
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I don't like the idea of having a VAT and an Income tax.
1 posted on 10/29/2015 10:37:27 PM PDT by Citizen Zed
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To: Citizen Zed

I hate the idea.


2 posted on 10/29/2015 10:46:48 PM PDT by SoCal Pubbie
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To: Citizen Zed

I will not support any new tax or new tax idea or proposal until the income tax is already gone forever, as in for real outta here NO BS.

Sorry, no trust, don’t care what your name is.

You will have to trust me when I tell you that I’ll allow you to institute another tax system once the income tax is gone.

Oh and, if the income tax is done away with and I still don’t let you institute another tax system, then you will know what it’s like to be lied to and stabbed in the back.

Just sayin’.


3 posted on 10/29/2015 10:48:06 PM PDT by chris37 (heartless)
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To: Citizen Zed
This idea stinks on ice and then some!

NO VAT; NOT EVER !

4 posted on 10/29/2015 10:57:56 PM PDT by nopardons
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To: chris37

If someone came up and said the income tax will go, and VAT will be the replacement....you need to ask the rate. I don’t see how you’d do a VAT unless it’s like 12-percent, and if you added that to a local sales tax....bringing things up to 19-percent....that will freak out most folks.


5 posted on 10/29/2015 10:59:13 PM PDT by pepsionice
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To: Citizen Zed; KC_Lion

Here is a “spaghetti on the wall idea”

I think there should be one fundamental tax rate “constitutional ceiling” that all other taxes must be set to with no more than 4 total categories.

For instance: Ceiling of 20% (Ceiling is set in the constitution to say 20% )

So you could have a 5% income tax, a 5% business tax, a 5% tariff (which is a tax) and a 5% sales tax.

Or you could have

a 10% income tax, a 1% business tax, a 5% tariff and a 1% sales tax. = total 17%

Or

a 10% income tax, 0% business tax, a 0% tariff and a 0% sales tax. = total 10%

That way if you want to tax income more, you cannot tax more than 20% total, but in order to increase ONE tax category you have to DECREASE another one!

Also limit the complete yearly spending of the fed gov to have a ceiling of say 10% of the economy output and NO MORE, unless congress declares war in which they have to renew the war declaration every year and it bumps it up to 20% total . If they need more money for the war they can only increase war spending by 5% per month (max of 25% total) and they have to do with a 3/4 vote in both houses EVERY MONTH and it expires at the end of each month!


6 posted on 10/29/2015 11:08:54 PM PDT by GraceG (Protect the Border from Illegal Aliens, Don't Protect Illegal Alien Boarders...)
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To: Citizen Zed

Businesses should not pay any taxes. That rules out a VAT.

There should be no income tax, because unless we get rid of the 16th Amendment and the income tax, the “progressive” income tax will come back. The Catholic bishops and other Marxist religious groups will never stop agitating for it.

We should have the FAIR Tax—which is collected on the purchase price of NEW consumer goods. USED consumer goods are not taxed. Services are not taxed. Incomes are not taxed.


7 posted on 10/29/2015 11:12:37 PM PDT by Arthur McGowan (Beau Biden's funeral, attended by Bp. Malooly, Card. McCarrick, and Papal Nuncio, Abp. Vigano.)
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To: Citizen Zed

A VAT is one of the few alternatives to the present stupid income tax system that would actually be WORSE.

A VERY bad idea from Senators Rand Paul and Ted Cruz.


8 posted on 10/29/2015 11:14:45 PM PDT by EternalVigilance
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To: pepsionice
If someone came up and said the income tax will go, and VAT will be the replacement....you need to ask the rate.

I don't care what the advertised rate might be. The VAT is an insidious hidden tax, which is a recipe for certain mischief by the political class.

9 posted on 10/29/2015 11:17:08 PM PDT by EternalVigilance
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To: EternalVigilance

The UPLC has a policy proposal of a 25% across the board tax reduction.

Every taxpaying citizen has the right to work tax free one year of every four spent in the work force.

We would reluctantly agree to a 20% reduction making it one year in 5 with no taxation.

Keep the ghouls at the IRS but call off the dogs once in a while.


10 posted on 10/29/2015 11:24:58 PM PDT by urbanpovertylawcenter (the law and poverty collide in an urban setting and sparks fly)
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To: nopardons

If they got rid of the income tax, I would welcome a VAT. I like the idea of everyone paying and not just the middle class. The rich and poor don’t pay a dime in taxes.....how the heck did we get here?


11 posted on 10/30/2015 12:53:44 AM PDT by napscoordinator (Walker for President 2016. The only candidate with actual real RESULTS!!!!! The rest...talkers!)
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To: Citizen Zed

Mr. Goldman Sachs strikes again. I wasn’t aware of this proposal at all.


12 posted on 10/30/2015 12:57:20 AM PDT by 9YearLurker
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To: Citizen Zed

Cruz totally masks this on his website, referring instead simply to a 16%, as opposed to 355, BUSINESS TAX RATE.

https://www.tedcruz.org/tax_plan/


13 posted on 10/30/2015 1:16:18 AM PDT by 9YearLurker
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To: 9YearLurker

Sorry, 35% tax rate.


14 posted on 10/30/2015 1:16:46 AM PDT by 9YearLurker
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To: Citizen Zed
A VAT is much more growth-friendly than the income tax because it does not penalize saving and investment.

I have a much better idea; how about abolishing all taxes on business altogether?

Businesses don’t pay taxes anyway they collect taxes by passing on the cost of those taxes to their customers.

Taxing businesses an insidious process in which politicians extort huge amounts of campaign cash from corporation. In the process lawyers, lobbyist and accounting firms make huge amounts of money either trying to avoid taxes or ensuring the correct amount of taxes are paid.

In the process the market is distorted and investments are made in places that in absence of perverted tax incentives they would not be made.

Zero out corporate income taxes and investment in the United States would skyrocket and the economy would break records in growth.

A VAT would simply create a growth economy for lawyers and accountants. Growth would be discouraged for years as corporations learned to deal with the new regulations and attempted to find ways to minimize their exposure to the new taxes.

The only way I would trust Washington with a VAT unless we had an Amendment abolishing the income tax and authorizing the VAT. Without an amendment we would end up with both and taxes and spending would explode.

15 posted on 10/30/2015 1:18:33 AM PDT by Pontiac (The welfare state must fail because it is contrary to human nature and diminishes the human spirit.)
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To: Citizen Zed

Unless you eliminate income tax, you are simply adding a new tax. Future administrations will adjust rates higher on two taxes.

Cruz should know that you must eliminate one.


16 posted on 10/30/2015 2:37:17 AM PDT by aMorePerfectUnion ( "Forward lies the crown, and onward is the goal.")
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To: chris37
I will not support any new tax or new tax idea or proposal until the income tax is already gone forever, as in for real outta here NO BS. Sorry, no trust, don’t care what your name is. You will have to trust me when I tell you that I’ll allow you to institute another tax system once the income tax is gone. Oh and, if the income tax is done away with and I still don’t let you institute another tax system, then you will know what it’s like to be lied to and stabbed in the back. Just sayin’.

Silly citizen - the powers that be don't want or need your support - else, the conservatives would be winning and the Constitution would be intact...

Now for a short public service announcement to all on FR:
I prefer Cruz and my money goes to his campaign, hence the Cruz link. If you like someone else, donate to him/her (find your own link to do it) and if you use FR and don't donate, then please don't complain about the welfare leeches or those who have Obama Phones because, functionally, you are no different than any other FReeloader.....

GO CRUZ!! Keep it up Trump!!

Donate to Cruz

Donate to FR

17 posted on 10/30/2015 4:35:54 AM PDT by trebb (Where in the the hell has my country gone?)
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To: Citizen Zed

And if the income tax was scaled back it would only be temporary.


18 posted on 10/30/2015 4:56:56 AM PDT by Rusty0604
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To: GraceG

Those promises would be broken.


19 posted on 10/30/2015 4:59:33 AM PDT by Rusty0604
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To: Citizen Zed
I think we already have something resembling a VAT i the form of fuel taxes.

Fuel is required for every stage of a product's manufacture, and I don't believe anyone outside of agriculture gets any break on fuel taxes, so the cost of those taxes accumulate at every stage.

20 posted on 10/30/2015 5:29:07 AM PDT by The Duke ( Azealia Banks)
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