VAT Tax - anyone for it?
Posted By: Backwards typist on 2009-05-30
In Reply to:
Any takers here? My feeling is that this tax would be added and we would get no relief from the other taxes. A $5,000 bathroom remodel would cost $6,250? (shaking my head). The consumer/taxpayer always loses.
Definition from Answers.com (too long to post here):
http://www.answers.com/topic/value-added-tax
From the Washington Post: "A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families.
The VAT has advantages: Because producers, wholesalers and retailers are each required to record their transactions and pay a portion of the VAT, the tax is hard to dodge. It punishes spending rather than savings, which the administration hopes to encourage. And the threat of a VAT could pull the country out of recession, some economists argue, by hurrying consumers to the mall before the tax hits "
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052602909.html
From the Corpus Christi Caller Times:"The advantages are that it can be relatively simple to administer, hard to evade and it raises an absolute ton of money. Also, in theory it would allow us to do away with large parts of the income tax.
“The Post” cites a paper published in the “Virginia Tax Review” that says a 25 percent VAT, a level common in Western Europe, would raise enough money to balance the budget, pay for health-care reform, exempt millions of families from the income tax and allow the top income tax rate to be slashed to 25 percent.
With other ideas for major revenue raisers, like the cap-and-trade scheme for greenhouse gases, losing momentum, the VAT will likely start to pick up tacit support in Congress. But, even assuming it could be sold to the voters, the VAT makes sense only as part of broad-scale tax reform and simplification. Otherwise, we could end up with the worst of all: three taxes — the income, the alternative minimum and the value added." (My emphasis).
http://www.caller.com/news/2009/may/30/national-value-added-tax-gains-ground/
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