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."

[April Lexington]

Obama, Geithner, Paulson, Congress have sent a clear message, like Hitler to Krupp, Dr. Porsche, and other wealthy Germans, get on onboard or at least shut up....or else.

Agreed. Read 'The Arms of Krupp." Great (and thick) book that explains how the Nazis and the big corporations were tied at the hip. Special tax treatment for Krupp was veeeerrrry interesting! (apologies to Arty Johnson)

[Plutarch]

There has been an another option before Congress since 1999. It's the Fair Tax Act(HR25/S296). It is a non VAT national sales tax that will replace the Federal income tax and abolish the IRS. Fair Tax ping!

Lets all thank the Fair Tax bots for making all the arguments and laying the groundwork that the socialists will use to impose a VAT on top of the income tax. Just like what we told you.

[April Lexington]

Texas made a HUGE mistake by funding Liberal school districts with property taxes. The STATE of Texas (read Liberal Austin) now owns the land that Texans died for and rents it to rich people who can pay the rent to support the schools that are eroding Texas culture and turning it into the Massachusetts of the South. BIG MISTAKE, Y'ALL!

[CottonBall]

Unfortunately, Texas isn’t the only state with a liberal education system. I’d bet most are liberal ever since the NEA got a stranglehold on our schools. I wouldn’t mind paying property taxes so much if the money wasn’t used for the liberal indoctrination of our youth. And academics were actually taught.

That said, when we were in Corpus, the Flour Bluff Middle School that I did my student teaching at was headed by an unashamed conservative principle. He was amazing! He assumed openly that all his teachers were conservative - and I didn’t see one dispute him on that. If I had stayed in the area, I could’ve worked for him easily. (Since we moved to CA instead, I taught all of one semester and quit the ‘profession’ forever after that.)

[April Lexington]

I hear you. Schools should be funded by a broad tax like income or sales. Property tax is a wealth tax and, as most Americans hold most of their wealth in their houses, it is highly discriminatory. The Elderly and the poor get hit hardest. Only the middle aged career people don't mind property tax. But when they retire, its a mad dash to the “cheap” states with low property taxes. Consumed the big public spending to raise the kids, then run for the hills once the kids are grown.

[eleni121]

Rahm’s brother is a big proponent of socialized medicine. Like the other Pigs at the Trough they need more and always more in order to reach their goal of destroying this nation once and for all..

[tallyhoe]

They are already doing that!

[xkaydet65]

With a VAT the parasites have to pay, unlike the presently constructed income tax. But I have one question. The Constitution is pretty specific about taxation. It allows for tariffs and the 16th amendment allows for a tax on income. A VAT is a new tax that is not specifically mentioned in the Constitution. Would not an amendment be required before such a wide ranging levy could be imposed?

[Leisler]

Of all the things, the government should not, one bit, be involved with the spiritual or intellectually development of children. At all. Nothing.

No person, or family should pay any tax, direct or otherwise, until the health and development of their children is assured.

Government education, is DIS-education.

[pgkdan]

With a VAT the parasites have to pay

Yeah but they're paying with their tax payer donated dollars so what do they care?

and as to constitutional questions...that's just an outdated charter of negative rights, didn't you know that. Obama said so.

[Blood of Tyrants]

The plan is to get rid of the divide between the rich and the poor by destroying and or driving out the rich and then taxing everyone else into poverty.

[American Quilter]

It is 30%. It is stated that a product would increase in price from $1 to $1.30 they say this is a 23% tax because $130 is 23% higher than $1. The math is already disingenuous because we would all agree that .30 is 30% of $1. IE: a thirty % tax.

Absolutely right. I distrust the fair-taxers because of their denial of this physical reality. I don't think they're stupid, so I must conclude that they're either careless or disingenuous. Either possibility makes their plan a nonstarter for me.

[zot]

Value Added Tax may not be as popular with Obama supporters as even more “progressive” Income Taxes, because VAT hits people who don’t pay Income Tax.

[lewislynn]

First, it’s not 30%, it’s 23%.

No, it would be a 30% (not 23%) increase in price.

The law dictating the 23% rate was written for the business required to remit "23% of the(ir) gross payments for taxable property and services", not you the consumer. And it's not 23% "so folks can compare" either.

If a business has to remit 23% of their gross they'd have to TAX YOU 30% on the sale.

I've been posting on Fairtax threads for over 10 yrs. I already know the lies and the rhetoric... it hasn't changed.

[lewislynn]

The 23% would not be added to the retail price at the store, it would be imbedded in the price.

You're right 23% wouldn't be added it would be 30% added. And the law specifically states the tax to be "separately stated and charged", not "embedded" in the price...Besides why would anyone, especially a Fairtax advocate, think having a tax embedded in the price is a good thing?...It makes no sense.

You're being lied to and you're falling for it.

[Ghost of Philip Marlowe]

Everyone please bear in mind that when fiscal conservatives floated the idea of a national sales tax, it was discussed solely in conjunction with an Amendment abolishing the income tax and stating that there could never be both an income tax and national sales tax.

I am sure the plan of these Stalinists is to impose a national sales tax ON TOP OF INCOME TAXES...WHILE INCREASING THOSE INCOME TAXES.

[olivia3boys]

I voted in the recent CA elections and I think the reason all the initiatives were shot down is that only the few conservatives left in CA showed up to vote. It was a ghost town. No cool black guy to vote for. . .

[pleikumud]

The FairTax Rate: a 23% tomato or a 30% tomato?
05/31/2007

As the FairTax gains more national attention, questions have again arisen about whether the FairTax rate is 23 percent or 30 percent. In the toxic environment that often accompanies public policy debates, FairTax.org has even been accused by some of misleading the public, even though full descriptions of “tax-inclusive” and “tax-exclusive” calculations abound on our Web site. We hope the following explanation puts all such questions to rest — at last.

Let’s use an example to illustrate the difference between tax-inclusive and tax-exclusive tax rates.

Assume there is a worker named Joe who earns $125 and spends all of his earnings. Let’s further assume that the government requires him to pay $25 in taxes.

If the government put a tax on Joe’s income, he would earn $125 before tax and would have $100 after tax to spend at the General Store. Thus, Joe has to earn $125 to have $100 to spend. Joe would also have to file an income tax return.

If the government put a tax on what Joe spends, he would earn $125 and would have $125 to spend at the store. Of the $125 paid by Joe to the storekeeper, $100 would be for the goods he bought at the store and $25 would be taxes that the storekeeper would send to the government. Joe would not have to file a tax return, as the storekeeper sends the tax in to the government.

Either way, Joe pays $25 in taxes and the government gets $25 in taxes. With a tax on income, Joe pays the $25 directly to the government, and with the tax on spending (sales tax), he pays the $25 in taxes indirectly when he buys something from the General Store. The General Store sends the tax that Joe paid to the government.

We may report the tax rate as $25/$125 = 20 percent, which is the tax-inclusive rate (meaning that the tax is included in the base). Alternately, we may think of the tax rate as $25/$100 = 25 percent, which is the tax-exclusive rate (meaning the tax is excluded from the base). The 23 percent FairTax rate set out in HR 25/S 1025 is a tax-inclusive rate, as is the current personal income tax, whereas most state-level sales taxes are quoted on a tax-exclusive basis. For ease of comparison, FairTax.org gives the tax rate both ways. Both rates are relevant, since the FairTax is replacing an income tax system, and 23 percent correctly represents the tax burden compared to the current system.

To review some of the research that determined a 23% (inclusive) rate is correct, please read Taxing Sales Under the FairTax: What Rate Works? This paper is a collaborative effort of 5 respected and independent economists.

http://www.fairtax.org/site/News2?news_iv_ctrl=1541&page=NewsArticle&id=8248

[Ghost of Philip Marlowe]

I read a study a few years ago that said when you add up all your taxes accruing until the day you die you end up paying over 75% of everything you earn to the government one way or another. I am not sure whether that study was made before the reduction in the “death tax” (inheritance tax) or after. If after, that would only nudge the 75% total a little not a lot.

[SunkenCiv]

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.

Or maybe a federal property tax that applies even to R.E.'s home in Illinois? How about just getting the tax-evaders in the Obama administration to pay up? That would help.