[George Frm Br00klyn Park]

"tax package guts middle class"

All, But then, that's what any sales taxes are designed to do. The VAT just does it "better and faster." Urged by the International Monetary Fund, accepted and implemented by socialist governments everywhere.

Maybe Russia today is a better place to raise your children.
They now have a flat tax based on income that works. But, give them a few years, and they will succumb to the socialist power giving structure of graduated income taxes, and deductions and exemptions to government's chosen entities of the day that the U.S. of A. politicians and bureaucrats of today enjoy. Coming for YOUR children. Ain't it grand?? Peace and love, George.

[tort_feasor]

Where in the tax package is a VAT tax included? I think the writter of the original piece is having a bad day.

[galt-jw]

and my oh my, this is in the ol world net daily, a source often quoted by tribalist, hypocrite pubbie bushbots who cited the very same source when critizing klintoon about THE VERY SAME ISSUES. what a farce. less principles than even the DNC.

At least there is no deception concerning what the DNC claims to espouse: socialist tyranny. The pubs haven't even the ephemeral decency to admit they are going to grow the fedgov just as the libs will, take away rights, just as the libs will, tax us to death-as more jobs are lost to tax friendly nations, just as the libs will.

any of you fools who FAIL to vote third party deserve what you are going to get. And I will mock you openly on this forum when you whine regretfully about your lost freedoms and the machines of tryanny and control that will be irreversible once implemented.

After eight years of massive abuse of power by Klintoon, with the powers of the fedgov less intrusive than today, it does not take a psychic to see what will happen with another klintoon, nixon, etc., after massive govt. surveillance and fedgov expansion of power.

[George Frm Br00klyn Park]

Currently, the U.S. government is $7 trillion in debt. Democrats, who have opposed this bill from the beginning, project that under the weight of the huge tax reductions being given to the very wealthy, that by 2013 when it is fully phased in, our debt will rise to $12 trillion or $36,000 for every person in the United States. Basically the July tax rebates we are going to receive will help contribute to this figure.

Nothing like paying one credit card with cash from another!
==========================================

Guys, Coming soon to YOUR{?} government. Peace and love, George.

[HatSteel]

I believe in a national retail sales tax INSTEAD of an income tax. I don't believe it is possible to "phase" in the idea of an NSRT while the income tax remains. Politicians will bring in the new and never get rid of the old.

I know them.

But the VAT's levels of taxation are no different than the tax impact of the income tax. Every tax at every level ends up in the pricing of the product that is eventually purchased by the end consumer.

Therefore, just tax the end consumer at a reasonable rate to FINANCE the government you want to pay for. Then everyone pays tax and at the same rate. That's the way it should be.

Exempt food, housing, and utilities.

[kylaka]

I'm surprised Farah would actually publish this. In addition to the inciteful drivel, anyone eho would describe the current tax as "fair" is a sure candidate for the psych ward.

[Munson]

http://www.townhall.com/columnists/brucebartlett/bb20021029.shtml

its being under consideration by the treasury department, but if we have a vat then tax rates should be flat and capped like russia.

[ancient_geezer]

Maybe Russia today is a better place to raise your children.
They now have a flat tax based on income that works.

Coupled with a VAT. Be careful what you ask for, you may get it.

RUSSIA:  PART TWO OF THE RUSSIAN FEDERATION TAX CODE

August 10, 2000

 

Alexander Chmelev and Evgeny Astakhov

Baker & McKenzie, Moscow Office

 

Sent by BISNIS, U.S. Department of Commerce, http://www.bisnis.doc.gov

Judith_Robinson@ita.doc.gov, Tel: 202-482-2293.  BISNIS sends this report as a courtesy to the U.S. business community. This is not to be construed as endorsement or sponsorship of any information or group.

On August 5, 2000, Russian Federation President Vladimir Putin signed into law four chapters of Part Two of the Russian Federation Tax Code and Federal Law No. 118-FZ ôOn the Implementation of Part Two of the Russian Federation Tax Code and Amendments to Certain Federal Laws on Taxationö (the "Implementation Law").  The chapters of the Tax Code signed into law by the President are Chapter 21 - VAT, Chapter 22 - Excise Taxes, Chapter 23 - Personal Income Tax, and Chapter 24 - Unified Social Tax.  These four Chapters and the Implementation Law were officially published in Rossijskaya Gazeta on August 10, 2000, and, with few exceptions, will become effective on January 1, 2001.

The most sweeping changes introduced into the Russian tax system by this new legislation are as follows:

1.         VAT (Chapter 21 of the Tax Code)

Although Chapter 21 of the Tax Code does not change VAT rates or the general VAT structure, it contains numerous provisions, which will significantly affect most businesses in Russia.  Most notably, Chapter 21 substantially modifies the "place of service" rules, which generally determine whether for VAT purposes a particular transaction has occurred in Russia and is, therefore, subject to Russian VAT.  Effective from July 1, 2001, Chapter 21 also will treat export sales to CIS countries in the same way as sales to all other foreign countries, and will exempt them from VAT.  On the downside, Chapter 21 will repeal a number of long-standing and important VAT exemptions, including an exemption for license fees for the use of intellectual property (such as, patents, copyrights, and trademarks), and will significantly narrow the VAT exemption for pharmaceuticals.

2.         Personal Income Tax (Chapter 23 of the Tax Code)

 

Chapter 23 of the Tax Code will replace the current progressive tax rates ranging from 12% to 30% with a flat tax rate of 13%.  This 13% rate will apply to almost all categories of income earned by individuals who are Russian tax resident.  A 30% rate will apply to dividends, and to any Russian source income received by individuals who are not Russian tax resident.  A 35% rate will apply to income from gambling, lottery prizes, deemed income from low-interest or interest-free loans, certain insurance payments, and excessive bank interest.

3.         Unified Social Tax (Chapter 24 of the Tax Code)

Chapter 24 of the Tax Code will replace the existing employersÆ contributions to four separate social benefit funds (which currently are imposed at an over-all rate of 38.5%) with one unified social tax.  This unified social tax will have a regressive tax scale from 35.6% to 2% of an employee's salary with the lowest rate applicable to the portion of an employeeÆs annual salary in excess of 600,000 Rubles (approximately US$22,000 at the current exchange rate). It should be noted that under the Implementation Law, as a transition rule, the lower rate of this tax will be 5% rather than 2% during 2001.

4.         Excise Taxes (Chapter 22 of the Tax Code)

As a countermeasure to reducing rates of other federal taxes, Chapter 22 of the Tax Code provides for an increase in excise tax rates for gasoline and other oil products by almost 300%.  It also provides for a less dramatic increase of excise tax rates for tobacco products and certain passenger cars.

5.         The Implementation Law

a.         Turnover Taxes

Effective from January 1, 2001, the Implementation Law repeals the Housing Fund Tax of 1.5% and reduces the Road Users Tax from 2.5% down to 1% and completely repeals the Road Users Tax effective January 1, 2003.   These taxes are imposed on gross sales and have been among the most onerous taxes on business in Russia. 

b.         Regional Tax Concessions

The Implementation Law reconfirms the right of regional authorities to provide tax exemptions for the regional portion of federal taxes retroactive to April 1, 1999. This reconfirmation resolves an issue that arose in 1999 as to whether the regional portion of profits taxes could be reduced pursuant to regional incentive laws.

c.         Profits Tax Rate

Apparently in compensation to local budgets for the cancellation of turnover taxes, the Implementation Law authorizes municipal governments to introduce an additional "municipal" profits tax of up to 5% of a taxpayer's taxable profits.  Thus the maximum overall profits tax rate may be increased from 30% to 35%.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)

 

Just like all FLAT INCOME TAXES ARE:

 

The flat tax is a VAT. None other than the father of the flat tax, Robert Hall of Stanford University (along with Alvin Rabushka), in his 1995 Ways and Means Committee testimony said, "The Hall-Rabushka flat tax is a value-added tax."

Which was pointed out again in additional hearings in April of 2000:

http://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm

"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"

"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."

The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka

In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write.

Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive.

To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following:

Total revenue from sales of goods and services

less

purchases of inputs from other firms

less

wages, salaries, and pensions paid to workers

less

purchases of plant and equipment

The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances.

FLAT TAX, VAT TAX, ANYTHING BUT THAT TAX; Duke Law Magazine, Spring 96:

• "The flat tax is essentially a VAT, with a personalized element for wages. Thus, the business tax allows deduction of all purchases -- as does a VAT -- but also allows deduction of wages. The wage income that is taken out of the VAT base, however, is also taxed, but is assessed against the individual wage-earner, not against the business."

 

Concerning Proposals for a Flat-Rate Consumption Tax
Before the Joint Economic Committee, Statement of Robert S. McIntyre
Director, Citizens for Tax Justice May 17, 1995

• The Hall-Rabushka flat tax, and its Armey and Specter variants, would replace the current personal and corporate income taxes with a new tax that is conceptually identical to a "subtraction-method" value-added tax, a version of a national sales tax, with two major modifications: First, imports would be exempt from the flat tax, while exports would be subject to tax. Second, to mitigate the regressivity of the VAT, cash wages, pensions received and other cash earned income would be taken out of the VAT base (i.e., deducted by businesses) and taxed directly to individuals, with exemptions. Thus, structurally, the flat tax is exactly equal to a value-added tax with an import incentive, an export disincentive and a personal rebate based on a percentage of a capped amount of cash wages, pensions and other earned income.Businesses compute a typical "subtraction-method" value-added tax by adding up their taxable gross receipts and subtracting the cost of previously taxed items. Thus, in computing the VAT, businesses deduct their purchases from other businesses, whether for supplies, services, machines, land or whatever. (In another, more common form of a value-added tax, known as a "credit-invoice" VAT, businesses get a tax credit for taxes paid on purchased items. In general, this produces the same result as a "subtraction-method" VAT.) Ultimately, the total tax base for a VAT is equal to retail sales of taxable items, and a VAT is thus equivalent to a retail sales tax. As noted, however, the flat tax base differs from a usual VAT, however, in that wages are deducted by businesses, and taxed at the personal level

CONSUMPTION TAX PROPOSALS; 1996 Deloitte & Touche LLP

• One concern associated with the flat tax is whether the low advertised rates will produce the same amounts of revenue as the current income tax. A June 7, 1995, Treasury Department analysis of a flat-tax plan similar to the Armey proposal, concluded that a rate of at least 22.9 percent would be needed to make the plan revenue neutral, that is, it would allow the government to raise as much revenue as is currently raised. Although the proposal is designed to raise less revenue than present law, the extent of the shortfall will concern policymakers.

• The Armey bill, H.R. 2060, would replace the current corporate income tax with a tax on business activities equal to 20 percent (17 percent after 1997) of business taxable income. The tax would apply to every person engaged in a business activity, whether an individual, partnership, corporation, or otherwise. Taxable business income would be gross active income (that is, income other than investment income) reduced by an array of business deductions.

• This business activity tax resembles a VAT computed by subtracting the costs of inputs from gross receipts, except that H.R. 2060 allows a deduction for cash wage expenses. Note that, under the bill, cash wages are subject to tax at the individual level at the same flat rate applicable to business profits. Thus, the combination of the business activities tax and the individual tax is roughly equivalent to a VAT. In addition, taxing wages at the individual level allows a generous personal exemption that makes the personal tax more progressive. To ensure that compensation is taxed once, tax-exempt entities that pay compensation other than as cash or retirement plan contributions would be subject to an excise tax.

The Flat Tax is a VAT even as the current income/payroll tax structure now in place is a subtraction method VAT, in that it is a levy imposed on businesses at all levels of production, it is passed on to the consumer hidden in the price of goods and services.

As long as government is able to play a shell game with hiding taxes from the Voter(i.e. individual) it can rely on the old maxim:

A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw

and keep right on growing without bound.

[Timesink]

I find it VERY hard to believe that WND would be the first - if not only - news organization to discover that a giant VAT was hidden in this bill.

[rwfromkansas]

I want some proof that a VAT is in this tax package. Not one, except some nut from WND, has mentioned this.

[rwfromkansas]

Also, where is this guy's proof that the President pushed for this lower plan; he ended up giving in to it, but he pushed for a bigger plan?

Where is his proof that Bush is determined to introduce a VAT (or even a NRST, which I would like in place of the income tax)?

[finnman69]

What VAT...articles like these and Pat Buchanan old cranky man rants are why I dont bother with WND any more....

Nothing but a bunch of

[PatrioticAmerican]

WorldNutsDaily.

I stopped reading their trash when they became like newsmax.com, both had more advertising than articles and few truthful articles. There is no VAT in the tax bill, and there is no comparison between the NRST and VAT.

[Southack]

World Net Daily continues its high-speed drive for the irrelevent world of supermarket tabloids, I see (except, the National enquirer has at least broken two big stories that turned out to actually be true)...

[Taxman]

George, this article is rubbish. I cannot fathom why a person would even write such a "The sky is falling" article, unless they were committed to keeping the evil Marxist progressive income tax in place. Therefore, methinks the lady doth profit by the evil Marxist progressive income tax, and is committed to keeping it in place.

I have no doubt that the tax system will be reformed. I am working to ensure that it will happen during W's second term, and I am working to ensure that it will be a National Retail Sales Tax.

As to your absurd comment that the NRST is designed to "hurt" the middle class and benefit the wealthy, George, let me remind you that Communist Manifesto was written for the express purpose of killing off the (then) nascent Middle Class that was being made possible by the industrial revolution.

As "steeply progressive income tax" (the second plank of the Communist Manifesto) virtually guarantees that rising tax rates on income will be a barrier against income mobility. The other nine planks of the Communist Manifesto precipitate ongoing and continuous class warfare, hatred and envy.

There is no doubt in my mind that the Communist Manifesto is purposely designed to ensure that no Middle Class arises in any society that adopts the Communist Manifesto as its "operating plan." It also ensures that there is misery for the people and luxury for the government poohbahs!

I am also committed to ending the vicious Marxist inspired class warfare and envy that has so paralysed civil discourse in the US (and all over the world, for that matter) since 1847.

Your choice, George, is to lead, follow or get out of the way, because your cherished Communist Manifesto is dead!

Can you you hear me George?

COMMUNISM IS DEAD!

CAN YOU HEAR ME NOW, GEORGE? COMMUNISM IS DEAD!

[rdb3]

Maybe Russia today is a better place to raise your children.

Well, what are you waiting on? Leave!

After all, there is no salida ilegal here. You are more than free to go.

Doing bad things to bad people.

[Bloody Sam Roberts]

Under the current tax system, mortgage interest and charitable contributions are deductible. These will have to be sacrificed to provide the government with a greater and constant income stream.

Perhaps true, but in the new tax package...will they? This author needs some more facts before goimng off half cocked.