The Republican Thread

[lostfan]

The "talk" is about a Value Added Tax (VAT) which much of the world uses, and it would replace a large part of the income tax structure that currently exists. For example, see this article in the Washington Post. If implemented correctly, it is a much simpler tax system.

Oh that's more or less another way of saying "flat tax," not at all what it sounds like originally. The only thing different is the actual number.

[Disco72]

Oh that's more or less another way of saying "flat tax," not at all what it sounds like originally. The only thing different is the actual number.

 

It's semantics, but a VAT is a national sales tax or a consumption tax. IMO, "flat tax" or "fair tax" are somewhat politically charged instead of the more neutral, and accurate, "consumption" tax.

[Balta1701]

Pete Visclosky (D-IN, 1st district) has disclosed that he has been subpoenaed in the investigation in to PMA (the Murtha case).

[HuskyCaucasian]

The "talk" is about a Value Added Tax (VAT) which much of the world uses, and it would replace a large part of the income tax structure that currently exists. For example, see this article in the Washington Post. If implemented correctly, it is a much simpler tax system.

the VAT is basically what Huckabee was recommending, right? He called it the "Fair Tax". I think i started a thread on that a while back. Many feel it taxes the poor too much, while leaving the rich with lower taxes.

 

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.

 

I dont like it.

Edited May 29, 2009 by Athomeboy_2000

[ChiSox_Sonix]

I dont like it.

 

My initial reaction is that I agree whole heartedly. I am willing to keep an open mind about it, however. I guess it depends on the specifics of the plan. Is a VAT designed as a replacement of sorts for income tax? If it's in addition to an income tax for the sole reason (or main reason) only to fund a national healthcare system I would vehemently oppose it. I'm just very skeptical of an additional tax that would affect every good or service I ever bought. NYS taxes 8.25% on most goods and that sucks enough as is.

[HuskyCaucasian]

My initial reaction is that I agree whole heartedly. I am willing to keep an open mind about it, however. I guess it depends on the specifics of the plan. Is a VAT designed as a replacement of sorts for income tax? If it's in addition to an income tax for the sole reason (or main reason) only to fund a national healthcare system I would vehemently oppose it. I'm just very skeptical of an additional tax that would affect every good or service I ever bought. NYS taxes 8.25% on most goods and that sucks enough as is.

ok, so let me try and flesh this out a bit. The idea is, as I understand it, to replace most... if not all... of the income tax with a VAT. Ok, fine. but the argument is that this new VAT would not only cover the existing income form the income tax, but also add money for healthcare. So, wouldnt it just be easier... from a governing stand point, to just implement some sort of a healthcare tax rather than blow up the whole thing?

[lostfan]

It would be regressive which is my biggest problem with any kind of flat or consumption tax. The higher your income, the less of your income you spend out of necessity (rent, utilities, food, clothing, car payment etc.), and it's probably close to 100% for most people. Which means the tax burden falls harder on the lower classes than anywhere else.

[NorthSideSox72]

It would be regressive which is my biggest problem with any kind of flat or consumption tax. The higher your income, the less of your income you spend out of necessity (rent, utilities, food, clothing, car payment etc.), and it's probably close to 100% for most people. Which means the tax burden falls harder on the lower classes than anywhere else.

I've seen this criticism of flat, vat or sales taxes a lot. But it can be addressed quite easily, and in fact some states and localities do exactly that - the rate can be very low or zero on things like clothing, store-bought food, necessities like that, with higher rates against other items. This is done all over. Not really an obstacle, IMO.

 

[HuskyCaucasian]

For those interested, this was our discussion on Huckabee's "Fair Tax"

[lostfan]

I've seen this criticism of flat, vat or sales taxes a lot. But it can be addressed quite easily, and in fact some states and localities do exactly that - the rate can be very low or zero on things like clothing, store-bought food, necessities like that, with higher rates against other items. This is done all over. Not really an obstacle, IMO.

Never heard that idea, but on the same hand, what about exemptions for people with kids?

 

Also, that seems like it would take out a pretty big chunk of revenue automatically.

[Balta1701]

I've seen this criticism of flat, vat or sales taxes a lot. But it can be addressed quite easily, and in fact some states and localities do exactly that - the rate can be very low or zero on things like clothing, store-bought food, necessities like that, with higher rates against other items. This is done all over. Not really an obstacle, IMO.

The real problem is that once you start exempting things from the tax...you wind up just begging it to turn in to something like our income tax. Our income tax system is ridiculously complicated not because an income tax, or even a progressive income tax is very complicated on its face...it's complicated by the shear number of deductions we've written in as a method of rewarding favored industries or adding a distortion to the economy in some way. We offer massive deductions for things like business expenses, homeownership, medical care, etc. There's simply no reason to assume that if you switched to a VAT or added in a VAT that within 5 years it wouldn't be vastly more complicated than the income tax because each Congressman gets to insert an exemption for his or her favorite campaign contributor or method to help his or her district.

 

If you want a way to think about it...ask this question...how long will it take for them to realize that giving a VAT break to ethanol production would be a big benefit to corn farmers?

[NorthSideSox72]

To clarify, I'm on the fence with concepts like VAT, national sales tax, etc. But to continue down this path...

 

Never heard that idea, but on the same hand, what about exemptions for people with kids?

 

Also, that seems like it would take out a pretty big chunk of revenue automatically.

 

You don't simply reduce taxes, you re-balance. Keep the overall burden the same, just spread it to different areas.

 

The real problem is that once you start exempting things from the tax...you wind up just begging it to turn in to something like our income tax. Our income tax system is ridiculously complicated not because an income tax, or even a progressive income tax is very complicated on its face...it's complicated by the shear number of deductions we've written in as a method of rewarding favored industries or adding a distortion to the economy in some way. We offer massive deductions for things like business expenses, homeownership, medical care, etc. There's simply no reason to assume that if you switched to a VAT or added in a VAT that within 5 years it wouldn't be vastly more complicated than the income tax because each Congressman gets to insert an exemption for his or her favorite campaign contributor or method to help his or her district.

 

If you want a way to think about it...ask this question...how long will it take for them to realize that giving a VAT break to ethanol production would be a big benefit to corn farmers?

 

Slippery slope? Only if you allow it to happen. YOU may wind up with that, but one does not HAVE to.

[Balta1701]

Slippery slope? Only if you allow it to happen. YOU may wind up with that, but one does not HAVE to.

Give me a campaign finance overhaul first and I'll be happy to believe that our Congress won't go that way. That's simply how our government works. When it can put a 50% tax on something it doesn't like and a 0% tax on something that does give it a ton of money, right now it's going to do so

[NorthSideSox72]

Give me a campaign finance overhaul first and I'll be happy to believe that our Congress won't go that way. That's simply how our government works. When it can put a 50% tax on something it doesn't like and a 0% tax on something that does give it a ton of money, right now it's going to do so

Sure, that seems likely. I didn't say this was GOING to happen, I was illustrating how it COULD be done properly.

 

[Balta1701]

Sure, that seems likely. I didn't say this was GOING to happen, I was illustrating how it COULD be done properly.

Deal. If we're going to do it properly...making it so that somehow avoiding some version of "Tax shelters" and all the other crazy things inserted in to the current income tax system is the only way that it can work. Because otherwise, it turns in to something just as complicated as the income tax system, except different people hire the tax preparers.

 

Edit: but then again, if you could somehow cut back on the loopholes and the deductions in the income tax, you pretty much make the reason for switching taxes go away anyway.

[Disco72]

Deal. If we're going to do it properly...making it so that somehow avoiding some version of "Tax shelters" and all the other crazy things inserted in to the current income tax system is the only way that it can work. Because otherwise, it turns in to something just as complicated as the income tax system, except different people hire the tax preparers.

 

Edit: but then again, if you could somehow cut back on the loopholes and the deductions in the income tax, you pretty much make the reason for switching taxes go away anyway.

 

On your edit - not entirely as the tax systems encourage different things as a result of their focus on earnings versus consumption.

[Balta1701]

On your edit - not entirely as the tax systems encourage different things as a result of their focus on earnings versus consumption.

True in the simplest form...but at a deeper level...you still need to raise x amount of revenue, which means that at some point you still pay the same taxes. If it encourages savings...hell, right now that's a terrible idea and the Fed is desperately trying to find ways to discourage saving.

[Disco72]

True in the simplest form...but at a deeper level...you still need to raise x amount of revenue, which means that at some point you still pay the same taxes. If it encourages savings...hell, right now that's a terrible idea and the Fed is desperately trying to find ways to discourage saving.

 

Agreed, but as you point out, it could change the incentive for spending.

[mr_genius]

Uh how do you define "talk"? I mean I've heard "talk" that Bush wanted to bring back the draft

 

the Democrats were the ones talking about bringing back the draft. Charlie Rangel and his pals.

 

[lostfan]

the Democrats were the ones talking about bringing back the draft. Charlie Rangel and his pals.

That statement you quoted was pure sarcasm, talking about people who hear and believe ridiculous or partially true things or just repeat some s*** someone else made up. Even still, for all the wars some people advocate as "necessary" (syria, iran, pakistan, n. Korea etc) as if th us was really that invincible, there is no way to do all that without a draft. So it wouldn't surprise me that a dem was saying that, it was republicans (at the time) blowing all that hot air about endless military intervention.

[Cknolls]

Tiller the baby killer was killed himself today in Kansas. Karma is a b****. I would be interested to hear Sebelius's comments.

[Rex Kickass]

Tiller the baby killer was killed himself today in Kansas. Karma is a b****. I would be interested to hear Sebelius's comments.

 

I believe murdered in church no less.

[GoSox05]

Its only a matter of time before the American Taliban come out in joy for the murder of Tiller. Come out in support of this terrorism.

[mr_genius]

Its only a matter of time before the American Taliban come out in joy for the murder of Tiller. Come out in support of this terrorism.

 

John Walker Lindh is an ant-abortion guy now? i did not know that. i did not know that.

[Balta1701]

Tiller the baby killer was killed himself today in Kansas. Karma is a b****. I would be interested to hear Sebelius's comments.

Impressive how tolerant of terrorism you are when it is done to someone who's politics you don't like.