Posted on 04/07/2010 3:11:00 PM PDT by 2ndDivisionVet
A taxing development surfaced on Wednesday.
White House economic advisor Paul Volcker is calling for a new national sales tax -- a value added tax or "vat" -- to help close the deficit.
But as CBS 2 HD found out area residents are saying "vat chance."
Talk about starting a tax revolt. Volcker's call for a new national sales tax -- on top of the state and local sales taxes we pay now -- got a loud Bronx cheer from just about everyone.
"That's crazy. That really is crazy. Why would need any more taxes than we already have?" said Kathy Merritt of Watchung, N.J.
"It's a bad idea. New Yorkers are struggling as it is already. We don't need that. We need incentives, breaks, jobs," East New York's Lee Santiago said.
"They're trying to make those of us who have a few bucks poor so everyone will be poor and everyone will be the same," added Charlotte Wein of Midtown.
Here's what the former mayor of Yonkers said when CBS 2 HD into him on the street:
"The Obama administration continues to be extremely out of touch with mainstream America. We're over-taxed so it's just a continuation of his far left, extreme left, agenda and I think it's a disaster for New York and actually the rest of the country, too," John Spencer said.
The new so-called value added tax would come on top of state and local taxes. Economists say the tax would also be imposed on manufacturers and producers.
"You don't need a PhD in economics to figure out that what the producer is going to do is pass this along to the customer," said Ken Goldstein of The Conference Board.
So if the vat is 10 percent, that sweater you pay $31.50 for today would have and additional:
*50 cents in taxes added on by the yarn supplier
*$1 in taxes added on by the manufacturer
*50 cents added on by the wholesaler
*$1.50 added on by the retailer
Now the sweater costs $35 plus state and local sales taxes, which is 8.75 percent in New York City.
One thing that may keep the Obama administration from imposing the tax this year is that every member of Congress is up for election come November. But next year, all bets are off.
Jose Barro, an economist for the Manhattan Institute, told CBS 2 HD that the vat might work if the government agreed to reduce personal income and corporate taxes at the same time.
To go where ?
Other more economically friendly countries.
This just can’t be right. If I make less than $250,000/year, my taxes won’t go up a single cent. In fact, I’ll be one of the 90% of Americans who are going to get a tax cut.
/liberaldelusion.
They’ll still pass it.
Examole(s) ?
Forgot to mention, UK top income tax rate just went to 50%.
As much as it pains me to say it, something like that just might be exactly what the country needs to awaken it from the Liberal dream so many are living. It may cause not a single far-left candidate to get elected for 50 years.
Of course they'll complain, especially if they realize that those paying their way don't want to pay anymore.
I think 7 years is too long. They’ll try to keep the income tax and NRST for as long as possible. Or they’ll just try to amend the Fair Tax Act to keep some form of income tax.
Another thing I have issue with is that I’ve read it was designed to fund our current-size government. I think the rate should be far lower than 23% so as to force government to shrink and operate at a smaller budget.
Just imagine what a 25% reduction in family purchasing power will do to the economy, employment, world wide competition, GDP and Federal revenue. This is a lose, lose, lose, lose proposition.
Obama is out of the closet now. He is not trying to fortify the country, but to rape it to transfer spending to the benefit of his core consitutency. This is reparations straight up. Under one theory you could tax the workers to transfer the fruits of their production to the non workers ORRRRRR you could simply go ahead and spend the same trillions on that constitutency and then monetize the debt and walla.....you have just accomplished the same thing. Money spent on his friends at ACORN, SEIU and UAW while devaluing the wealth of the producers.
Why merely tax a high percent of one years income when you can steal a large portion of their entire net worth by devaluing the currency by which it is measured. This is a silent coup my friends.....He knows his time is short, he is just about creating many 3rd rail issues that will make it politically difficult to unwind.
There are certain small countries in the Caribbean, as well as one or two in Central America. One can also look to some of the smaller countries in Southeast Asia.
**Has People Screaming To Heck With ‘Vat’**
Let me join the screaming chorus!
You’re hitting all the right notes here.
Take your last point first. The NRST rate should be lower and will be voted on each year by Congress. One of the beauties of this aspect is that each member of Congress will need to run on a ticket of committing to find ways to lower the NRST rate. Each member will be in the spot light on this issue, no more smoke and mirrors.
If a session of Congress does not lower the NRST rate, then that session will be judged a failure, unless there is some enormous set of national emergencies that justify not lowering it.
Having to vote each year on the NRST rate will force certain aspects of government to be efficient.
Next we note that lowering the NRST rate does not necessarily lower tax revenues to the federal government. If we have economic growth, tax revenues can increase even if the NRST is voted to a lower rate. The idea is to shrink federal government as a percentage of GDP.
Then there is the question of 23%, why not lower right now? 23% is chosen because it is ‘revenue-neutral’. Why must it start at a revenue-neutral rate? This is pragmatism in politics. It is for the same reason that the democrat socialists in Congress passed an imperfect takeover of healthcare, because they saw their chance and did not want to lose the opportunity thinking they could fix it later.
The same pragmatism runs through revenue-neutral. The architects of HR 25, the FairTax legislation, knew that if they got bogged down in spending reduction arguments and debates, that it would never make it out of committee. Thre are too many vested interests with tentacles reaching into Ways and Means. Taking on spending reduction arguments invites a fight with hundreds of boardrooms and their lobbyists across the USA. So revenue-neutral is a temporary first year provision. If you read the legislation you will see that after the first year at 23%, the rate will be lowered to 14% plus a calculated extra.
Ok, now about 7 years, we know that the entire IRS Tax Code is abolished the first day of enactment of the FairTax Code. I also argued that there is a danger here, that the Left in Congress would use a class envy argument to impose say a 2% tax on the very rich. That is how they work and once they get their foot in the door with an income tax it is only a matter of about ten years or so before the whole metastasis is back with a vengeance. Note that the original Income tax was a flat tax of 7% on less than 2% of the wealthiest So the Left knows how to be deceptive and there is real danger down the road in having both an NRST and an Income tax.
Now note that HR 25 sunsets if the 16th is not repealed within 7 years. So the legislators have thought about this but you are right that Congress could decide by amendment to extend that 7 year sunset provision. Leaders of the FairTax are still arguing this point. Be aware that HR 25 is a work in progress and can still change. But it is the most researched tax reform legislation ever introduced and it has mpre support in Congress that Reagan had for his 1986 reform.
So what to do?
I will digress a little to Obamacare because it is related. The abomination that is Obamacare has woken the American giant. We now have 40 states lining up against Obamacare either by filing suit against the federal government or by passing state laws or making amendments to their state constitutions to prohibit the Obamacare federal mandate.
Unfortunately, in the sense of worst case and unfortunately again the worst case is a probable case, that Obamacare will be upheld, even begrudgingly, because of the 16th Amendment. The Obama DOJ lawyers are going to be arguing in court that the federal government is not forcing anyone to buy health insurance, that it is only taxing those that do not have adequate health insurance meeting minimum standards, standards that the Left is setting. They will argue that the 16th Amendment gives them the power to collect taxes from income however defined and from any source without apportionment. This was the argument used in court by FDR lawyers to defend Social Security as a tax.
So we have got to get rid of the curse of the 16th Amendment by repealing it. And that would leave us with the brilliant FairTax system as a new and far superior tax code.
I’ve always said it would be highly symbolic to pass the FairTax in 2013, exactly 100 years after the 16th was ratified.
The sad thing is we all know it’s a stretch for them to validate what they want, but they still succeed far too often.
Interesting. But unlikely. The birth certificate/diploma/ad nauseum is only a fraction of the problem, and anyone who tries to “dismantle” this administration based on that assumption will be labeled a looney and/or right-wing crackpot. There are too many power-hungry people backing this idiot, and unfortunately, they’ve found a way to make the opposition (us) look like we’re the one’s with the “problem”. Interesting, actually. That’s exactly how a psycho/narcissist operates..... says or does something totally off the wall; then when his ego is challenged/confronted, he twists the facts with bald-faced lies that make you look and feel like you’re the one with the problem for not agreeing with him.
“It is regressive as hell and gets all the parasites to have to pay!!!”
If VAT displaced income or other taxes, this certainly would be a virtue. My concern with a VAT is that it will be on top of the taxes we already pay and thus is one more lever for expanding the size of government, which will have adverse consequences for economic growth. So we may pay a large cost in efficiency for the mere gratification of roping in a few parasites.
Of equal concern is that as with national sales tax proposals, the very regressiveness of a VAT may result in those at the bottom being given a large refundable tax credit equal to the expected amount of VAT they’ll have to pay. In short, due to concerns about “fairness,” the “parasites” will be made hold-harmless and the rest of us who already pay a disproportionate share of income taxes will be left holding the bag.
We, the working class producers in this country, have literally been enslaved by the lazy, do nothings.
Who is John Galt?
Lived in Belgium during late 90’s
Things may have changed but average was .56 cents out of each dollar went for taxes.
Besides that travesty here’s the VAT side......
VAT was 20%...... No other taxes on purchases.......
Prices included VAT so you knew you were paying a 20% markup...
O Bummer looks at things from how can I start small and then
ratchet up dependence so there is NO other choice.....
Healthcare was step 1, VAT will be step 2
Vote them out of office in November.
This includes RINO’s................
Thanks. I couldn't recall exactly, but I knew it was somewhere on the left coast.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.