Posted on 10/07/2005 8:39:52 AM PDT by SolidSupplySide
Jharkhand, the latest state to announce its decision to switch to the State VAT, must be commended. Despite being a BJP-ruled state at a time when the BJP leadership is preventing its states from joining the Vat regime, Jharkhand has chosen to do the sensible thing. It indicates either a change in the stance of BJP’s leaders, or some creditable independence on the part of Jharkhand’s leaders. This leaves six major states out of the system — Rajasthan, Chhattisgarh, Madhya Pradesh, Gujarat, Tamil Nadu and UP. Talks have been taking place with political leaders to get them to join in.
By staying out of the State Vat regime, the BJP has a political point to make. But what is UP’s excuse? The arguments against the State Vat are, in any case, getting weaker by the day. The performance of state revenues in the first five months of 2005 — April to August — has been encouraging. Revenues have grown at 16 per cent — higher than the 12 per cent historical average. Some states like Karnataka, Punjab and Delhi, have witnessed even stronger revenue growth at 25 per cent. The resistance that was to be expected from the trader community, which now cannot evade taxes as easily as it could under the earlier system [of sales taxes], has been a token one. This is also because of many sensible changes made to the VAT rules which ensured that small traders did not get unnecessarily burdened under the new administration. The self-assessment system in the State VAT also reduced the scope for harassment of traders by sales tax officials. An information network, allowing states to cross-check payment information has been put to trial and is expected to improve compliance and reduce evasion further. The Central Sales Tax (CST), which has to go by 2007, will now be reduced from 4 per cent to 2 per cent in the next fiscal year. Moreover, the Centre has assured any state worried about revenue loss of compensation. With Jharkhand and Uttaranchal joining in, the case in favour of the VAT has been further strengthened. It is important that all states join the system, otherwise the unscrupulous could exploit the differences in the tax regime between states. This would be unfair to all honest tax payers.
Also, we need to remember that the State VAT is an intermediate step towards the proposed Goods and Services Tax, which is a value added tax on all goods and services produced in the country. When 130 countries, including India’s neighbours like Pakistan, Bangladesh, Sri Lanka and China, have implemented the VAT, making their manufacturing more competitive, we need to join up or get left behind.
The so-called "Fair Tax" has a non-tax-inclusive rate of 30%. This is double the rate that any country has found sustainable due to evasion. Because of sales tax evasion, those countries are converting their sales taxes to VATs.
So the solution is to steal the money a little at a time and at numerous places. We sure as hell don't want people figuring out how to NOT pay taxes, do we?
VAT's are always a bad idea, if only because they're invisible. Socialists love them because they tax the cost of production. Adam Smith would recoil!
So the selling point on VAT is that it allows the gov't to raise taxes higher than under a sales tax regime because there is less tax evasion? Do you see something wrong with that picture?
So the selling point on VAT is that it allows the gov't to raise taxes higher than under a sales tax regime because there is less tax evasion? Do you see something wrong with that picture?Actually, the way I see it, the selling point of a VAT is that it can generate the same revenue as a sales tax with a lower rate. I don't see anything wrong with that picture.
when gov't tax collection becomes more efficient, is the natural tendency of politicians to increase or decrease taxes as a result. Put another way, when from time to time, various states run budget surpluses, does that usually result in the gov't cutting taxes in order to eliminate the surplus or in the gov't keeping tax rates the same and spending the surplus on things the gov't deems to be worthy causes?
I disagree. A VAT is paid at each "increase in value" with the true amount never being shown to the consumer. Congress long ago figured that the best way to steal us blind is to steal from a hundred small places instead of one big one.
Whatever your stance on the NST, it WILL do several positive things.
First, it will finally reveal to the average person just how much the federal government is stealing from you.
Second, it will remove the power of the government to silence churches on politics (as if clergy have no freedom of speech).
Third, it just might cause the people to FINALLY throw out the same old parties who promise fiscal responsibility but never deliver.
Fourth, the IRS will become a much smaller and less powerful department with less ability to screw people over by having their own special courts with their own pet judges.
I disagree. A VAT is paid at each "increase in value" with the true amount never being shown to the consumer. Congress long ago figured that the best way to steal us blind is to steal from a hundred small places instead of one big one.You are mistaken about the visibility of a VAT. Let me explain:
A credit-invoice VAT works like this: All businesses charge the VAT on their sales, but they get a credit for what they've paid. They only remit the difference of what they paid from what they received. This process ends up taxing the retail price (that's what the retail price is - the sum of all the "values added"). In fact, a VAT at the same rate as a NRST would generate the same revenue (all other things being equal). Here is an example:
VAT
Payment
Credit
(Tax - Credit)Raw Materials Manufacturer Wholesaler Distributor Retailer
The Retailer sells his product for $100 and adds a 20% tax at the register and the government collects $20 on a $100 sale, just like a NRST. There is no difference to the customer. It's fully visible and there is no extra tax burden to any producer down the chain.
Second, it will remove the power of the government to silence churches on politics (as if clergy have no freedom of speech).A church can discuss politics right now, they just have to pay taxes like everyone else. If they don't want the benefits of being a tax-free organization, they don't have to be one. The FairTax avoids this issue by making all churches pay taxes like everyone else regardless if they are involved in politics or not. Which do you think churches would prefer?
Evidently none of them have traveled to countries where the VAT is printed on every receipt. Whatever. The Fair Tax has zero chance of ever becoming Law.
That is the biggest opposition to both the VAT and the NST. Like I said, politicians DO NOT want you knowing how much all their taxes are costing you.
You say that it isn't unconstitutional to link a person or organizations NATURAL RIGHTS to obedience to some arbitrary law. BTW, the law was passed by DEMOCRATS in 1953 because they believed that politics from the pulpit had at least in part been the reason for the defeat of Stevenson. It was punishment, pure and simple.
You say that it isn't unconstitutional to link a person or organizations NATURAL RIGHTS to obedience to some arbitrary law. BTW, the law was passed by DEMOCRATS in 1953 because they believed that politics from the pulpit had at least in part been the reason for the defeat of Stevenson. It was punishment, pure and simple.This is a separate issue. The point was that a church can discuss whatever they want now, they just have to pay taxes. Under the FairTax, a church would pay taxes, regardless.
No, it is definitely part of the issue. The majority of a church's outflow of money goes to salaries, building upkeep, and other charaties. The effect on churches would be minimal.
No, it is definitely part of the issue. The majority of a church's outflow of money goes to salaries, building upkeep, and other charaties. The effect on churches would be minimal.Salaries wouldn't be taxable, but building upkeep would be (as would the actual construction of the building) and "charities" might be depending on what you mean.
Coming soon to a cash register near you.
Well, most countries with a VAT or sales tax also keep their income tax.
I'm sorry but I don't follow your reasoning that Churches would have to pay taxes under a fair tax or a VAT.
What kinds of things would a Church pay taxes on with a fair tax or VAT?
Utilities?
Churches usually take donations from members. Currently churches must claim 503C status to be exempt from income taxes on donation revenue. However, should they venture to discuss life, health and happiness and mix such discussion with policy and law, they may be accused of political influence and lose their tax exempt status. This is disturbing.
Under a fair tax or VAT there would be no threat of an income tax on donation revenue or donated items.
So where would a fair tax or VAT show up with respect to a church, specifically what items?
TIA.
So where would a fair tax or VAT show up with respect to a church, specifically what items?Anything they bought that wasn't for resale; to produce, provide, render, or sell taxable property or services; or in furtherance of other bona fide business purposes. So just about everything they buy would be taxable (e.g., hymn books, Bibles, buildings, utilities, stained-glass windows, etc.).
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