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Value Added Tax

post #1 of 15
4/22/10 at 9:26pm
Thread Starter 
http://news.yahoo.com/s/ap/20100421/...e/us_obama_tax

Quote:
Obama suggests value-added tax may be an option

By CHARLES BABINGTON, Associated Press Writer Charles Babington, Associated Press Writer – Wed Apr 21, 7:14 pm ET
WASHINGTON – President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, "I want to get a better picture of what our options are."

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding "sense of the Senate" resolution that calls the such a tax "a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery."


For those who are unsure of what a VAT tax is:
http://www.answers.com/topic/value-added-tax

But, but Europe has it, so it MUST be good.
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post #2 of 15
4/23/10 at 3:53am
The best days of America are behind us. I am glad I am not starting out today.
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post #3 of 15
4/23/10 at 4:08am
Quote:
Originally Posted by ckblv View Post
What's wrong with it?
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post #4 of 15
4/23/10 at 4:45am
Yes we charge 17.5% tax. Is tax just automatically put on the price of your goods there, i can't remember??.

If a company isn't VAT registered though like a very small amount of our clients they don't pay it. And for businesses that have to pay VAT on goods, they can claim it back, but the average householder can't
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post #5 of 15
4/23/10 at 4:51am
Quote:
Originally Posted by Rosiemac View Post
Yes we charge 17.5% tax. Is tax just automatically put on the price of your goods there, i can't remember??.

If a company isn't VAT registered though like a very small amount of our clients they don't pay it. And for businesses that have to pay VAT on goods, they can claim it back, but the average householder can't

when i used to work in the motor trade we had a few clients that didnt have to pay it, some did then just claimed it back

i dont see a huge problem with it, but i guess its because thats all i know, i dont see the need for the dig at Europe either
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post #6 of 15
4/24/10 at 1:37pm
OK, here are just some of the problems.

1. Any sales tax affects low-income workers more than high-income workers, since the high-income workers are spending less of their money (saving and investing) and have to spend less of their money just to live.

2. The tax is ultimately paid by the consumer, and no one else in the chain.

3. Any national sales tax will reduce your spending power by that amount.

Some good points:

1. The wealthy will pay more than the poor. Five percent on a $20 Timex is a lot less than 5% on a $10,000 Rolex.

2. It will raise an immense amount of money.
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post #7 of 15
4/24/10 at 1:52pm
I don't think it's needed. Spend less, and use common sense (is there any on Capitol Hill?) in what you do spend money on.

I have no faith in the government that an added tax would help to lower the deficit when the government shows no signs at all of slowing down its spending. The added tax revenue would just continue to disappear down the black hole of bureaucratic stupidity.
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post #8 of 15
4/24/10 at 3:21pm
I don't see a problem with a value-added tax or any other national sales tax if it were a substitute for income tax, and if certain items such as basic food and prescriptions are exempted so that people who are spending most of their budgets on basic necessities aren't hit as hard by the tax. The current income tax system is very expensive for the government to administer, so a sales tax that took the same amount out of our pockets would effectively put more into the government's budget, as long as the IRS was cut back sensibly.

A trade-off that reduced income tax by some percentage and introduced a comparable percentage VAT/sales tax would also be fine by me.

What I wouldn't be happy about is a new tax materializing from thin air, especially right now. People are already struggling; can we please not make it even harder to stay afloat or get back on our feet?
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post #9 of 15
4/24/10 at 3:30pm
It will never be a substitute for income tax, its a completely different kind of tax but it should be a substitute for sales tax and not in addition to
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post #10 of 15
4/24/10 at 3:46pm
Quote:
Originally Posted by icklemiss21 View Post
It will never be a substitute for income tax, its a completely different kind of tax but it should be a substitute for sales tax and not in addition to
I think we're using the word substitute in different ways. What I mean is, I wouldn't be against something like lowering the national income tax by 5% and having a 5% national sales or value added tax. The effects on most people's purchasing power would approximately cancel out, but taxes at the cash register are cheaper for the government (one unit of paperwork per store instead of per person) and also have the advantage of automatically catching illegal income when it's spent.

The greatest savings possible, that way, would be from getting rid of national income tax (in order to completely get rid of the expense of processing it) and roll out a national tax at the cash register designed to bring in the same amount of money.
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post #11 of 15
4/24/10 at 6:01pm
I got what you meant, I just don't think they would ever get rid of income taxes and use VAT in place of it.

However, in the UK VAT is the only sales tax at purchase, the current plan is in addition to any current sales taxes
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post #12 of 15
4/25/10 at 2:33pm
Quote:
Originally Posted by icklemiss21 View Post
I got what you meant, I just don't think they would ever get rid of income taxes and use VAT in place of it.
Well, that's true. They'll never do it; it would make too much sense.
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post #13 of 15
4/25/10 at 5:50pm
Thread Starter 
Hillary Clinton got it right, a few months ago, when she said, "In the United States we tax anything that moves."

Yeah, let's throw another 10% onto people in addition to federal income tax, state income tax, state sales tax, property tax and all the other taxes we pay on gasoline, utilities, etc. That will REALLY help poor people. Not to mention it will be a huge boost for our depressed economy.
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post #14 of 15
4/26/10 at 4:47am
Seeing as how it's the private sector that creates jobs, and not the government, one of by big worries over a VAT and cap-and-trade (groan) is that added costs incurred by the private sector will not only be passed on to consumers, but that they will do serious harm to a damaged economy and job growth. Considering that things really aren't geting better, either one, or both, would be a very bad idea.
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post #15 of 15
4/27/10 at 6:53am
We don't need additional taxes in this depressed economy. What we need is for Washington to figure out how to spend less money. It is not possible to collect enough in taxes to cover what is being spent. Somebody throw out an anchor and slow them down some.
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