National Sales Tax being considered

[Steak_n_Taters]

http://www.washingtonpost.com/wp-dyn...602909_pf.html

Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look
Levy Viewed as Way to Reduce Deficits, Fund Health Reform

By Lori Montgomery
Washington Post Staff Writer
Wednesday, May 27, 2009

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."

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.

Liberals dispute that notion. "You could pay for it regressively and have people at the bottom come out better off -- maybe. Or you could pay for it progressively and they'd come out a lot better off," said Bob McIntyre, director of the nonprofit Citizens for Tax Justice, which has a health financing plan that targets corporations and the rich.

A White House official said a VAT is "unlikely to be in the mix" as a means to pay for health-care reform. "While we do not want to rule any credible idea in or out as we discuss the way forward with Congress, the VAT tax, in particular, is popular with academics but highly controversial with policymakers," said Kenneth Baer, a spokesman for White House Budget Director Peter Orszag.

Still, Orszag has hired a prominent VAT advocate to advise him on health care: Ezekiel Emanuel, brother of White House chief of staff Rahm Emanuel and author of the 2008 book "Health Care, Guaranteed." Meanwhile, former Federal Reserve chairman Paul A. Volcker, chairman of a task force Obama assigned to study the tax system, has expressed at least tentative support for a VAT.

"Everybody who understands our long-term budget problems understands we're going to need a new source of revenue, and a VAT is an obvious candidate," said Leonard Burman, co-director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, who testified on Capitol Hill this month about his own VAT plan. "It's common to the rest of the world, and we don't have it."

Seeking New Revenue

The surge of interest in a VAT is testament to the extraordinary depth of the nation's money troubles. While some conservatives have long argued that a consumption tax would provide a simpler and more efficient alternative to the byzantine U.S. income tax code, this time it's all about the money.

The federal budget deficit is projected to approach $1.3 trillion next year, the highest ever except for this year, when the deficit is forecast to exceed $1.8 trillion. The Treasury is borrowing 46 cents of every dollar it spends, largely from China and other foreign creditors, who are growing increasingly uneasy about the security of their investments. Unless Congress comes up with some serious cash, expanding the nation's health-care system will only add to the problem.

Obama wants to raise income taxes for high earners and impose new levies on business, but those moves would not generate enough cash to cover the cost of health care, much less balance the budget, and they have not been fully embraced by Congress. Obama's plan to tax greenhouse-gas emissions could raise trillions of dollars, but again, Congress is balking.

Key lawmakers are considering other ways to pay for health reform, including new taxes on sugary soda, alcohol and employer-provided health insurance. The last proposal could raise a lot of money -- nearly $1 trillion over the next five years, according to White House budget documents. But options on the table would raise a fraction of that sum. And while it might pay for health care, it would barely dent deficits projected to total nearly $4 trillion over the next five years and to grow rapidly in the future, as baby boomers draw on Social Security and Medicare.

Enter the VAT, one of the world's most popular taxes, in use in more than 130 countries. Among industrialized nations, rates range from 5 percent in Japan to 25 percent in Hungary and in parts of Scandinavia. A 21 percent VAT has permitted Ireland to attract investment by lowering its corporate tax rate.

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.
A VAT's Bottom Line

What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, "100 Million Unnecessary Returns," Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 -- about 90 percent of households -- from the income tax and would lower rates for everyone else.

And in a paper published last month in the Virginia Tax Review, Burman suggests that a 25 percent VAT could do it all: Pay for health-care reform, balance the federal budget and exempt millions of families from the income tax while slashing the top rate to 25 percent. A gallon of milk would jump from $3.69 to $4.61, and a $5,000 bathroom renovation would suddenly cost $6,250, but the nation's debt would stabilize and everybody could see a doctor.

Sales Tax Gains Momentum

Burman, who helped House Democrats craft an unsuccessful 2007 plan to repeal the alternative minimum tax, said he's received a number of phone calls from lawmakers interested in his idea, though "they can't quite imagine how to make it happen politically." Burman said the 25 percent rate has caused some sticker shock, and he's trying to figure out how to bring it down.

Graetz's proposal drew an endorsement from Volcker, who last year called it "a sensible plan for reform." (Volcker did not respond to a request for comment.) It also has piqued the interest of Conrad, the Senate Budget Committee chairman who argues that it could be modified to accommodate Obama's pledge not to raise taxes on families who make less than $200,000 a year.

"I think interest is quietly picking up," Graetz said. "People are beginning to recognize that the mathematics of the current system are just unsustainable. [No ****!]

You have to do something. And a VAT has got to be on the table if you want to do something big and serious."

Still, the Senate Finance Committee declined to include a VAT among the options it is considering to pay for health reform. And even VAT supporters doubt the tax will find a place among the tax-reform proposals the Volcker panel has been asked to produce by Dec. 4.

Though the nation's fiscal outlook is grim, Burman said "the situation will have to get more desperate" before lawmakers are likely to consider a new levy aimed directly at the pocketbooks of every one of their constituents.

Most lawmakers are still looking for "a painless source of revenue" to overhaul the health-care system and dig the nation out of debt, Burman said. "Who knows?" he added. "Maybe the tooth fairy will bring that to them."

"I will not raise taxes on anyone earning less than $250,000 per year."

[SB_Stong]

I am willing to pay higher taxes to pay down the defecit, not an extra trillion dollars in healthcare expansion.

[Steak_n_Taters]

I am willing to pay higher taxes to pay down the defecit, not an extra trillion dollars in healthcare expansion.

That's one of the things that's so troubling about this: on the one hand they say it's to balance the budget. On the other it's to pay for more massive expansion of the government. They can't do both, unless they want the tax to be ridiculously high. When taxes get too high, people are going to flat out leave.

Here's an idea: CUT SPENDING.

If you want to see how wonderfully high taxes and high spending works, look no further than the fiscal paradise of California.

[1devil]

http://www.washingtonpost.com/wp-dyn...602909_pf.html



"I will not raise taxes on anyone earning less than $250,000 per year."

I hate the idea. The sales tax is a completely unfair tax that impacts lower income individuals in a much more significant manner.

[SaviorSix]

You're supposed to either have a national income tax, or a higher sales tax. One or the other. Not ****ing both.

These asshat politicians....

[Steak_n_Taters]

I hate the idea. The sales tax is a completely unfair tax that impacts lower income individuals in a much more significant manner.

This.

I mean what about states (like Texas, and many others) that already have a sales tax (it's the main tax revenue for our state - we don't have any state income tax). With a national sales tax rate of 10%, our total sales tax rate will all the sudden jump to almost 20%! And that's on top of national income tax.

Can you imagine if all the sudden everthing you bought cost 20% more?

Also, what about the elderly on very fixed incomes?

[El Gilbro]

This is sickening.

[YUL]

You're supposed to either have a national income tax, or a higher sales tax. One or the other. Not ****ing both.

These asshat politicians....

yea, wtf? i mean you'll need to set up a whole new administration and **** for the new "increased" VAT and still keep the old income tax system in place

double fail imo

[AronP24]

List of Taxes we have in this country:

TAXES:
Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax (42 cents per gallon)
Hunting License Tax
Inheritance Tax Interest expense (tax on the money)
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
Road Usage Taxes (Truckers)
Sales Taxes
Recreational Vehicle Tax
Road Toll Booth Taxes
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and
local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer Registration Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax





If the DC thuggery continues and they implement this, the time for rebellion would be long overdue...though, I have little faith in the people anymore that they would be willing to turn off American Idol, put down the corn chips and give a damn about anything other than being 'comfortable'.....

[blancmange]

Churchill:

"For a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle."

[Spetsnazos]

"Not one of these taxes existed 100 years ago and our nation was the most prosperous in the world, had absolutely no national debt, had the largest middle class in the world and only one parent had to work to support the family."

.

rofl the US being the most prosperous nation in the world at 1908...ROFL

[Viking22]

If the DC thuggery continues and they implement this, the time for rebellion would be long overdue...though, I have little faith in the people anymore that they would be willing to turn off American Idol, put down the corn chips and give a damn about anything other than being 'comfortable'.....

And those that do will be villified in the liberal media as racist and homophobic

Wait, that already happened with the tea parties.

[El Gilbro]

And those that do will be villified in the liberal media as racist and homophobic

Wait, that already happened with the tea parties.

I'll just bitterly cling to my guns and religion then.

[HoosierBoy]

How long before the concept of the "state" becomes confined to the history books?

"I used to live in Nevada, now I just live in the United States."

[AronP24]

rofl the US being the most prosperous nation in the world at 1908...ROFL

wasn't my quote...it was part of the post listing the taxes....
however, that has nothing to do with the amount of taxes that exists....
quote or no quote..this IS a problem

[Spetsnazos]

wasn't my quote...it was part of the post listing the taxes....
however, that has nothing to do with the amount of taxes that exists....
quote or no quote..this IS a problem

but see if part of your quote is bull****, the whole quote must be bull****. There isnt enough time to be sifting through bull**** around here

[Steak_n_Taters]

but see if part of your quote is bull****, the whole quote must be bull****. There isnt enough time to be sifting through bull**** around here

o'rly?

How is a factual list of taxes BS?

[byates5637]

What else can they tax after this? Sales tax, income tax, inflation tax...

Maybe a federal property tax will be next?

[blancmange]

What else can they tax after this? Sales tax, income tax, inflation tax...

Maybe a federal property tax will be next?

before the revolution the French tried to tax celibacy

[Steak_n_Taters]

What else can they tax after this? Sales tax, income tax, inflation tax...

Maybe a federal property tax will be next?

Actually, that wouldn't surprise me.

That and probably huge inheritance taxes.

Oh and health benefit taxes are being considered as well.

Basically anytime there is ownership or transfer of ownership of anything... it will be taxed.

Soon there will be a tax on taxes. You owe 15% of all the money you paid in taxes for a tax tax. You are wealthy enough to pay taxes, you need to be taxed for that! Pay your fair share of tax taxes!

[El Gilbro]

but see if part of your quote is bull****, the whole quote must be bull****. There isnt enough time to be sifting through bull**** around here

Link showing that the statement in his post is bull****?

Because all we have is your ROFL'ing over the statement. For all we know, you could be wrong.

[gixxer0.6g]

And so it begins.

[Steak_n_Taters]

And so it begins.

lol. aware.

[AronP24]

but see if part of your quote is bull****, the whole quote must be bull****. There isnt enough time to be sifting through bull**** around here

the list of taxes is not a quote...nor is it bullsh*t...it is what is law. fact. period. done.

[OatsandSteak]

Explain something to me, I'm from Canada so this seems "normal" to me.

In Canada we have GST/PST(Goods and Services Sales Tax/Provincial Sales Tax), Alberta is the only province that has no PST and the sales GST is 5%, Alberta is a huge exporter of oil, which gives it less of a tax burden because of no deficit. The rest of the provinces have a combined sales tax of 10-15.5%. This is how it has been since I can remember. My question is: In the states do you have State Sales Taxes(our PST)?

[El Gilbro]

Explain something to me, I'm from Canada so this seems "normal" to me.

In Canada we have GST/PST(Goods and Services Sales Tax/Provincial Sales Tax), Alberta is the only province that has no PST and the sales GST is 5%, Alberta is a huge exporter of oil, which gives it less of a tax burden because of no deficit. The rest of the provinces have a combined sales tax of 10-15.5%. This is how it has been since I can remember. My question is: In the states do you have State Sales Taxes(our PST)?

Most states do. (Delaware doesn't) And different items are taxable in different states.

[st_jimmy]

We need healthcare reform, not this.

[YUL]

Most states do. (Delaware doesn't) And different items are taxable in different states.

yea, I remember Quebec, 8% sales tax and GST of 7%. People just consume less, which is good

But here in PA, sales tax is only 6% and there's no tax on clothing. Makes overconsumption easy! plus, gas, tobacco and alcohol is dirt cheap!

[Steak_n_Taters]

Explain something to me, I'm from Canada so this seems "normal" to me.

In Canada we have GST/PST(Goods and Services Sales Tax/Provincial Sales Tax), Alberta is the only province that has no PST and the sales GST is 5%, Alberta is a huge exporter of oil, which gives it less of a tax burden because of no deficit. The rest of the provinces have a combined sales tax of 10-15.5%. This is how it has been since I can remember. My question is: In the states do you have State Sales Taxes(our PST)?

Some states have it. In states like Texas, there is no state level income tax, so they get most of their tax money from sales tax.

What we don't want is national income tax + state sales tax + national sales tax.

[jwbeeler]

I am willing to pay higher taxes to pay down the defecit, not an extra trillion dollars in healthcare expansion.

Would you change your mind if you paid $45k in taxes last year? The idea that "everyone has to do his/her part" is complete lunacy. Additional taxes will not be used to pay down the deficit, they will be used for "programs" and "free money" give aways (read: welfare). It should start with making those who expect something for nothing begin to WORK for OUR money...

With a flat tax, YOU would have control over the amount of tax you pay. If you don't want to pay a tax, you simply don't buy the goods. It's simple. Those who make more money would pay more taxes as they would spend more than those who did not.

Take a look at your paycheck. Look at the Gross - would you like to have all that money every two weeks? Then, paying 10% more for something with a flat tax would not be so bad, would it? What percentage tax is taken from your check? I guarantee it's more than 10%.