We're broke ... time for a new tax

CNNMoney.com web site ^ | October 2, 2009 | Jeanne Sahadi

[RayChuang88]

NEW YORK (CNNMoney.com) -- President Obama has been steadfast in his pledge that he won't raise taxes on those making less than $250,000.

But that doesn't mean only high-income households will be subject to higher taxes.

An increasing number of influential Democrats and fiscal policy experts have signaled publicly that lawmakers will have to get a handle on the deficit sooner rather than later. And they recommend policymakers seriously consider the creation of adding a value-added tax (VAT) on top of the federal income tax.

That could mean more money out of everyone's pockets when buying virtually anything - sweaters, school books, furniture, pottery classes, dinners out.

[Oatka]

If you thought manufacturing was fleeing this country, enact this tax and watch them shut down.

Enact this tax on services as well and watch the lawyers flee the country. :-)

[PugetSoundSoldier]

I agree. Check the spending. 23% is ludicrous! $230 in taxes on a $1000 purchase. Why does the government need that much? $4600 on a $20,000 car? NO WAY!

If they ONLY got that much, we should be happy... Right now, the Federal Government is more than 27% of our entire economy. Federal tTaxation for most people - when you factor in FICA, SSI, your share of corporate taxes, capital gains, and of course income taxes - is very close to 30%.

For 2007, total AGI was $8.7 trillion; we can assume around $9 trillion this year. Total Federal Government receipts will be around $2.6 trillion, or around 29%.

[tdscpa]

I actually think it will happen for two reason: ending the income tax will bring back the estimated US$14 to US$19 TRILLION

Sorry about your reading problem. Life must be tough without that ability.

The article (and the plan) say nothing about ending the income tax. In fact, the article mentions adding an additional tax, plus keeping the income tax.

All you "fair tax" proponents just provided the democrats with a very evil idea.

[motor_racer]

A couple of thoughts:

First, reject ALL arguments that changing the tax structure will actually increase revenue to the government (sorry Dr. Laffer). We want to reduce government revenue, size, services, scope and power. The Laffer arguments are red herrings put forth by people who still want to increase government.

Second, get into the habit of asking people if they think the government they are getting is worth, TO THEM, the cost they are PERSONALLY paying. You will quickly find that the only ones that believe this is true are on the receiving end.