National Sales Tax Gets Fresh Look; Rahm Emanuel's brother advises 10% VAT...

Washington Post ^ | 5/27/2009 | Lori Montgomery

[GreaterSwiss]

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

[Man50D]

Fair-taxers should get it into their heads that this is never going to happen.

Oh really? Tell that to the cosponsors of The Fair Tax Act whose numbers have increased with each session of Congress since The Fair Tax Act was first introduced since 1999. The increase is a direct correlation to the growing grassroots Fair Tax movement since politicians understand they need to satisfy their constituents or risk losing their jobs.

As easy as it sounds it is ridiculous to consider that the government will be ‘prebating’ a check to everybody in the country in order to allow for a VAT or point of sale tax.

The Fair Tax Act is not a VAT! We have a VAT currently with the federal income tax. Corporations have taxes levied against their income. That tax along with associated compliance costs are costs that are factored into the price at each stage of production for every thing we purchase. It is essentially a VAT. The Fair Tax will eliminate the VAT by eliminating corporate income taxes.

It is much more likely that a flatter and fairer tax with limited deductions would be easier and much more efficient too not only sell to the American people but to enact.

The Fair Tax is a flat tax but on consumption instead of productivity since it will apply one rate only at the point of sale. We have already tried a flat tax on income and it has failed miserably. It's our current income tax code. People were taxed 1% on the first $20,000 of income and 7% on income over $500,000 when the 16th Amendment was passed in 1913. At the very least 99% of the population earned less than $500,000. It was essentially a one tiered flat tax system. Over 96 years it has morphed into the multi tiered increasingly intrusive, oppressive and complex system we have today except faster thanks to the thousands of lobbyists who didn't exist in 1913. Those lobbyists successfully lobbied Congress to impose all sorts of deductions and loopholes buried in the income tax code. Limited deductions will quickly become many with a flat tax on income.

This ignores the fact that a heavy progressive tax on income is one plank in Karl Marx's Communist Manifesto. It is so because Communists understand taxing productivity and at a gradual increasing eventually discourages people from working. They will eventually turn to the state for dependence.

[concerned about politics]

Add in the Cap and trade taxes and oh boy, is the economy ever going to soar! Right? Right?

Oboma will go down in history as one of the worst presidents this country has ever had. His name will become a common swear word.
Never before has one man done so much damage to this country in such a short time.
Bush will be considered a national hero because of this man.

[happygrl]

You know, whenever I see that pic of Rahm Emmaunuel doing a “raspberry” it depresses me to think that we have such juveniles in positions of power.

Nothing about that is cute.

http://obamaclock.org/

[Alamo-Girl]

Thanks for the ping!

[TexasRepublic]

Where does one buy a good pitchfork in a non-agrarian society?

[Smokin' Joe]

I honestly can’t see how they would say this would stimulate the economy. The FairTax, yes. Not this VAT.

You see, that is because you aren't looking at the big picture. (/sarc, sorta)

This will cause the price of everything to rise, at every level. That means that 'money' will be worth less, and people will need more.

This will cause pressure to increase prices, wages, and decrease the value of the dollar (can you say "inflation"? I knew you could.)

Now, in the long run, what that inflation does in balloon the GDP numbers (instant recovery!), inflate the stock market (more recovery!), increase wages (even more recovery!), and help people who are currently borderline on fixed debts to make the payment.

It is all a numbers game, but the bottom line is that it will take more money to buy less, and the government just keeps living off our largesse while sitting on its own.

[Man50D]

The fairtaxers I know are solidly behind the repeal of the income tax as a prerequisite of the Fairtax being put in place.

Not only are Fair Tax supporters concurrently pushing for repeal of the 16th Amendment but more importantly it is a provision in the Fair Tax Act. To quote from the bill:

SEC. 401. ELIMINATION OF SALES TAX IF SIXTEENTH AMENDMENT NOT REPEALED.

If the Sixteenth Amendment to the Constitution of the United States is not repealed before the end of the 7-year period beginning on the date of the enactment of this Act, then all provisions of, and amendments made by, this Act shall not apply to any use or consumption in any year beginning after December 31 of the calendar year in which or with which such period ends, except that the Sales Tax Bureau of the Department of the Treasury shall not be terminated until 6 months after such December 31.

[ladyvet]

"Add in the Cap and trade taxes..."

While going over finances last night I told my husband that I fear people don't understand how they will be financially raped when this goes through. The middle class will collapse.

[Frantzie]

Consumer spending died just before and after O was elected. I never saw anything like it. People are NOT spending money because anyone with an IQ about 60 has ZERO confidence in Obama. This is the dirty secret no one is talking about.

Rahm’s brother? Who the hell is he? The one who is the big agent to the stars? This family is evil.

The Dems are over reaching. If the spineless RINOs like McCain, Crist and others were not so scared and ready to sell out we could be hammering this scum. The GOP needs to get over the fears of being called racists for protecting people who pay the taxes in the country.

[Man50D]

National sales tax or income tax. I REFUSE to pay both! REFUSE!

You already pay both. Everything you purchase includes corporate income taxes at each stage of production(a VAT)that is factored into the price of all good and services.

[L,TOWM]

An extremely astute comment...

[madamemayhem]

but no one who makes less than 250,000 dollars will be paying even a dime in more taxes, right? how about that hope and change isn’t it wonderful?

[TSgt]

America has turned into the movie “Idiocracy.”

Yes, yes it has...

[concerned about politics]

The middle class will collapse.

I read Obomas training manual Rules for Radicals . His enemy isn't the rich. It's the middle class. Alinski hated the middle class. Oboma is trying to destroy them by impoverishing them. The middle class is his target. That's why he caters to them in his speeches. They believe he's there to "help" them.

[a fool in paradise]

I thought that Obama wasn’t going to raise taxes on 95% of Americans...

[MaxMax]

10% ? Hell, why not 20 or 30%, lets just go for the gusto.

[a fool in paradise]

You forget, your employer already withholds your money every pay period. If citizens all had to write one check out “paid in full” every April, there would’ve been a revolt long ago.

[GOPJ]

Liberals never met the tax they didn’t love...

[epow]

How much ya wanna bet the folks on welfare will get a special id card that will exempt them from having to pay any sales tax.

I would bet against that even with Monopoly money.

But here's an idea that will work, guaranteed by the Magic Kenyan himself. First, all Americans who are now working or operating a business just stop and let the government pay us not to work. Then the government taxes us at 100% of our welfare income and gives us everything it thinks we need free of charge. All of this government largesse will be paid for by electronically created fiat dollars of course, and then we can all live fat, dumb, and happy forever.

If the Magic Kenyan can give away $1.8 trillion electronic dollars created out of thin air, as he has in only 117 days, he shouldn't have a problem understanding the circular reasoning required to make my proposed plan work. That's what makes electronic fiat money so great, you just punch in the amount you need and then you can buy stuff without using real money and without incurring any debt. At least not any debt that you can't pass on to your G-G-Grandchildren.

[mojitojoe]

We need a revolt.
_______________
Desperately needed. I think it has started. Look at the taxes collected this year compared to last. The signs are there. When it goes to the next level is anyone’s guess.