Posted on 10/20/2011 2:26:28 AM PDT by dennisw
One trait of European VATs is that while their rates often start low, they rarely stay that way. Of the 10 major OECD nations with VATs or national sales taxes, only Canada has lowered its rate. Denmark has gone to 25% from 9%, Germany to 19% from 10%, and Italy to 20% from 12%. The nonpartisan Tax Foundation recently calculated that to balance the U.S. federal budget with a VAT would require a rate of at least 18%.
VATs were sold in Europe as a way to tax consumption, which in principle does less economic harm than taxing income, savings or investment. This sounds good, but in practice the VAT has rarely replaced the income tax, or even resulted in a lower income-tax rate. The top individual income tax rate remains very high in Europe despite the VAT, with an average on the continent of about 46%.
As Americans rush to complete their annual tax returns today, there is still some consolation in knowing that it could be worse: Like Europeans, we could pay both income taxes and a value-added tax, or VAT. And maybe we soon will. Paul Volcker, Nancy Pelosi, John Podesta and other allies of the Obama Administration have already floated the idea of an American VAT, so we thought you might like to know how it has worked in Europe.
A VAT is essentially a national sales tax that is assessed at each stage of production, with the bill passed along to consumers at the cash register. In Europe the average rate is a little under 20%. In the U.S., a federal VAT would presumably be levied on top of state and local sales taxes that range as high as 10%. Some nations also exempt food, medicine and certain other goods from the tax.
(Excerpt) Read more at online.wsj.com ...
Globalization of finance has reduced the effectiveness and utility of tariffs. Even the most restrictive countries use other methods to construct trade barriers. They add safety, environmental, and other requirements along with excessive testing and audits, difficult certfification processes and slow document processing to create barriers.
Interestingly, the US is more likely to employ these techniques on domestic producers than their foreign competitors.
Go read up on the plan. Materials for the Manufactured goods are exempt from the sales tax. Buyer pays 9% on entire product once. Not even close to a VAT.
Could we assume that anyone who posts something like that is trying to confuse the issue and inject untruths into the dialogue since not one of the candidates is recommending anything like a VAT? In fact, they are trying to get rid of a form of VAT that we currently have? Discount anything that person puts out there comes to mind.
You are right but most of that monkey business is due to WTO rules. Under those rules it is easier to put up and keep up the barriers to domestic entry you mention than outright tariffs
But 30-50% tariffs would still be a boon to US domestic production of energy and manufactured goods which translates into more jobs, more domestic wealth, less pressure for taxes to go to Democrat programs of welfare, wealth redistribution and racial reparations
Perhaps you should read the (ever changing) plan. Only American made goods that go into products are exempted from the corp 9% tax, and none of the labor is exempted from that 9% corp tax. Then the product goes to the next business in the supply chain and the whole process is repeated, every step along the way that 9% corp tax is added at the end. THEN, when it finally gets to the retail customer a 9% sales tax is added to the entire mess.
That is what makes it a VAT.
If it is charged only at the retail level, it is NOT a VAT, or value added tax. It is a sales tax, pure and simple.
So then you are saying that the state sales tax is a VAT tax?
But all the politicians keep telling me that we’re a democracy...
Well, they’re RATs and they’re lying (of course)
See: Pledge of Allegiance
Do you actually mean to tell me that Democrats lie?
I’m reporting you to Attack Watch!
(obvious sarcasm)
Only every word, including "and" and "the".
“Interestingly, the US is more likely to employ these techniques on domestic producers than their foreign competitors.”
I agree with your comment about WWII being a trade war with respect to Japan versus the US and Great Britain. The US was effectively blocking Japan from the sources of raw materials it required to grow its mercantilist economy while the British were a foil for Japanese designs on the oil riches of Indonesia. When the US cut off oil and steel exports to Japan it retaliated against Pearl Harbor, the Philippines, and the British outposts in Asia. WWII in Europe was more payback by Germany for the stiff WWII reparations as well as a preemptive strike against the emerging military threat from the Soviet Union.
I particularly concur with the quote above about the US government’s policy toward domestic producers. While the historical role of government has been to protect domestic industry and commerce, the elites in the US seem intent on destroying domestic creators of wealth instead of using government power to benefit domestic producers. This intervention by government to handicap domestic companies only makes these companies less competitive in the global economy.
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