[Carlhole]

Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look

$this->bbcode_second_pass_quote('WaPo', 'W')ith 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.

[Quinny]

Why is it not a good idea to have both?

[vision-master]

Get ready for the costs of all goods and services to skyrocket.

[Carlhole]

$this->bbcode_second_pass_quote('Quinny', 'W')hy is it not a good idea to have both?

[Daniel_Plainview]

$this->bbcode_second_pass_quote('', 'T')he 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.

[Armageddon]

A consumption tax would be the best way, but it won't stop this current economic collapse. This entire global system is going to collapse.

[mcgowanjm]

That has been the basic problem of the global economy for the past three decades. Low wages even in boom times have landed the world in its current sorry state of overcapacity masked by unsustainable demand created by a debt bubble that finally imploded in July 2007. The whole world is now producing goods and services made by low-wage workers who cannot afford to buy what they make except by taking on debt on which they eventually will default because their low income cannot service it.

All the stimulus spending by all governments perpetuates this dysfunctionality. There will be no recovery from this dysfunctional financial system. Only reform toward full employment with rising wages will save this severely impaired economy.

How can that be done? Simple. Make the cost of wage increases deductible from corporate income tax and make the savings from layoffs taxable as corporate income.

I agree with Henry Liu, unless we get wage increases across all OECD nations, I wouldn't count on a sustained global economic recovery, or on the hyperinflation we've seen in the past.

http://www.nakedcapitalism.com/

Default the debt. But then the Power shifts. And the Powers will
hold on with a death grip.

[vision-master]

$this->bbcode_second_pass_quote('Armageddon', 'A') consumption tax would be the best way, but it won't stop this current economic collapse. This entire global system is going to collapse.

[AAA]

I still think a large gasoline tax is needed badly in this country.

[Carlhole]

$this->bbcode_second_pass_quote('AAA', 'I') still think a large gasoline tax is needed badly in this country.

[odegaard]

One of the advantages or disadvantages (delicate cough) with a VAT tax is it's next to impossible to cheat.
As for income taxes, if you have deep pockets to hire good tax lawyers I'm quite sure they can find some good loopholes for you.......An offshore account in the Cayman Islands perhaps? (another delicate cough)

[AAA]

$this->bbcode_second_pass_quote('Carlhole', '')$this->bbcode_second_pass_quote('AAA', 'I') still think a large gasoline tax is needed badly in this country.

[dunewalker]

$this->bbcode_second_pass_quote('Carlhole', '
')Hmm... A VAT tax in general, coupled with an income tax for high earners?...

[MarkJ]

$this->bbcode_second_pass_quote('', '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.

[Plantagenet]

Obama will never allow a VAT tax to be enacted......remember, Obama promised over and over again that he wouldn't raise taxes on anyone earning under $250,000.

[Carlhole]

$this->bbcode_second_pass_quote('Plantagenet', 'W')hat happened to Obama's promise that he wouldn't raise taxes on anyone earning under $250,000?

[mattduke]

Let's simplify this mess. Let's just force citizens to work as slaves to the government for 4 months out of the year and eliminate all taxes.

[Plantagenet]

.....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 tax is sneakier then a sales tax. You don't see the VAT being added to the total on the receipt after the purchase. The VAT is already added into the price of the item when it is sold.

Everything on the menu in a restaurant and everything in stores just costs 20% more. It keeps the rubes from realizing how heavily they are being taxed.

[heroineworshipper]

Just closed another $2,300,000 mortgage today without planning on paying it off, so U'd better start paying more taxes, U slaves.

[odegaard]

$this->bbcode_second_pass_quote('mattduke', 'L')et's simplify this mess. Let's just force citizens to work as slaves to the government for 4 months 6 months out of the year and eliminate all taxes.