V-A-T spells disaster

Do you feel undertaxed? The value-added tax can help with that

  • Follow Editorials

One idea, the Fair Tax, is a grass-roots idea that has been building steam for years. The other, a value-added tax, is a European import being talked up by liberal elites as the answer to all our government's problems.

Which idea do you think will get traction in the national media?

The VAT, of course. It's so continental!

Billionaires Bill Gates and Berkshire Hathaway Chief Executive Warren Buffett, and Buffett partner Charlie Munger, recently said the European-style value-added tax -- a tax on goods at every stage of their manufacture and distribution -- is pretty much inevitable in the United States.

Wow. Grass-roots Americans can work for years on something like the Fair Tax -- a national retail sales tax that would more fairly spread the tax burden and even reduce it -- but the elites have a better idea, and that's what we'll likely get.

And consider this bone-jarring endorsement of the value-added tax from Buffett: "In the end we are not taxing enough, unfortunately, or we're spending too much, probably some of each."

Do you feel undertaxed?

Buffett and friends believe the U.S. government needs more money for the country to be more competitive in the world. Oddly enough, this editorial page believes the American people need more of their own money for the country to be truly competitive.

And consider this telling, yet tepid endorsement of the value-added tax by Munger: "The people that are against it are against it because they think it will work too well, that the politicians will get too much money and do too many dumb things with it, and there is a good deal to be said for that point of view."

Wow. We'll just let that one digest.

Buffett adds: "We've got a gap of 10 percentage points between what we're raising in taxes and what we're spending. One way or another we are going to have to close that gap in a major way, so if some of those taxes fall on me, or some fall on Berkshire, that's probably the way it should be."

Just to clarify: The people pushing the value-added tax believe the federal government desperately needs more of your money. The people supporting the Fair Tax are more concerned with the people who are paying the taxes.

Which side do you fall on?

If you're on the fence, consider: The Fair Tax -- levied just once per product, at the point of purchase -- would replace all income taxes, payroll taxes, gift taxes and the death tax on family estates, and would ultimately abolish the Internal Revenue Service. The value-added tax does none of that -- and would actually be in addition to all those other taxes.

Still on the fence?

The VAT cannot logically be argued to be superior to the Fair Tax -- from a taxpayer's point of view, that is. Therein lies the rub: The value-added tax isn't intended to help people; it's intended to shore up big government, a la Europe.

Yet, because elitists -- many of whom have made their fortunes and now want to pull up the rope -- like the idea of a VAT, the proposal is apparently going to move to the fore.

If only we could have a series of national debates and news reports comparing the two approaches.

We're pretty sure the Fair Tax camp would welcome that. Will the VAT camp?

Comments (129) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Junket831
0
Points
Junket831 05/06/10 - 11:27 pm
0
0
Excellent editorial! We

Excellent editorial! We certainly need to completely revamp the entire tax structure. A long and detailed debate should be had that involves all options and then they should either have a national vote or conduct a process similar to passing a constitutional amendment in which state legislatures would vote up or down.

But the issue isn't just the tax system. It is creating a system that is truly fair with little or no exemptions.

baronvonreich
0
Points
baronvonreich 05/06/10 - 11:47 pm
0
0
You know the tax takers,

You know the tax takers, which represent half of America, as well as those who have shunned education and training for any useful job skills will never be for a fair tax and Democrats will never be for anything that isn't progressive to implement more tax on the most successful as to keep their base happy.

The problem is spending, needless spending. From SS and Medicare to foreign aid and farm subsidies to the ridiculous eenie meenie miney mo tax laws/credits run by the IRS to the dept of corrections to all the welfare to the needless wars of aggression to the pork barrel congressional projects, spending at the federal, state, and local levels could and should be cut by 50%.

TheFederalist
1
Points
TheFederalist 05/07/10 - 12:16 am
0
0
Well said AC, but as you

Well said AC, but as you point out, the "Fair Tax" will never be even mentioned by anyone on capitol hill, because it does away with the IRS, which is counter productive to the ultimate goal of the left, which is massive expansion of the federal governement. Anything that would lead to less control of the populace by the feds, will never see the light of day, unless pushed by all Americans. Unfortunately, since you need a fair press that tells all sides of this issue, to inform the populace, the current lamestream media will never say a word. They either ignore, or completely malign anything that does not fit into their agenda, which is totally liberal. Couple that with the closed door policy which guides this administration, which was originally advertised as the most "Transparent" in history. Today we learned that all cameras have been banned by the "Debt Commisiion", as they look for ways to deal with the financial problems of our nation. Only the latest flash from Capitol Hill, that you will never hear on cnn or msnbc. Figures. I can hardly wait till November......

grouse
1635
Points
grouse 05/07/10 - 01:05 am
0
0
Yeah, I guess Bill Gates,
Unpublished

Yeah, I guess Bill Gates, Warren Buffett, these socialist elites, don't know anything. America is one of the lowest taxed countries on earth...you can look it up.

sjgraci
2
Points
sjgraci 05/07/10 - 01:54 am
0
0
Get over it chronicle, the

Get over it chronicle, the fair tax is a fraud dreamed up by millionaires so they pay less in taxes. If they pay less, guess who pays more? The middle class. Entitlements? You think they're high now, just look at the fraud tax. The only people who will be paying less towards entitlements to the poor are the rich. Wake up tea partiers you are being scammed.

Tax the rich like the wealthiest want! The fairest tax is a progressive tax. Move the highest tax brackets back to where they were under President Clinton, 36% and 39.6%, and create new brackets for higher incomes. Tax Warren Buffet's income from dividends higher than 15%! He agrees!

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 04:28 am
0
0
The fairest tax is a

The fairest tax is a progressive tax? Really? A tax that is at a higher percent on some than on others is fair? Without using wealth envy, sjgraci, please attempt to explain that. Incredible.

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 04:48 am
0
0
The more I read that, the

The more I read that, the more laughable it gets. Taxing people at different rates, is by its very nature, unfair. Just because you and even Buffet think they can afford it, doesn't make it any more fair. It's wealth envy, plain and simple.

Trey Enfantay
9
Points
Trey Enfantay 05/07/10 - 04:48 am
0
0
Greece!

Greece!

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 05:04 am
0
0
That's a fine example,

That's a fine example, Trey....but the left won't let facts and history get in the way of their agenda.

bettyboop
7
Points
bettyboop 05/07/10 - 05:23 am
0
0
Check out the Euro lately?

Check out the Euro lately?

Ga Values
27
Points
Ga Values 05/07/10 - 06:14 am
0
0
We have a SPENDING problem

We have a SPENDING problem not a tax collection problem. Both parties are for BIG GOVERNMENT & BIG SPENDING.

johnston.cliff
2
Points
johnston.cliff 05/07/10 - 06:26 am
0
0
Why is it that the most

Why is it that the most ignorant and easily fooled people like the VAT and informed and educated people like the FAIR TAX? Coincidence? I think not. The current political leaders of this country seem determined to destroy America. Their every move seems aimed and crushing the economy and enslaving the populace. Can you imagine the mindset that wishes to live here without a chance at the American dream?

HTN007
19
Points
HTN007 05/07/10 - 08:00 am
0
0
Actually, neither is correct

Actually, neither is correct as a solution. What we need is the Steve Forbes Flat Tax!

Chillen
17
Points
Chillen 05/07/10 - 08:29 am
0
0
I say Buffet & Gates donate

I say Buffet & Gates donate 100% of their wealth to the tax cause they are so worried about. Their money would make a huge dent in our national debt. Lets see them put their money where their mouth is.

The Fair Tax will never be chosen by politicians over a VAT tax. Politicians much prefer the sneaky tax method so that the dumb masses here in America will not even know they are being taxed.

Thanks to Obama & company the Eurofication of America continues. Oddly enough it comes at a time when Europe's model is failing. Boy are people dumb.

Harrisburg Homeowner
0
Points
Harrisburg Homeowner 05/07/10 - 09:00 am
0
0
For those of you who oppose

For those of you who oppose the VAT tax and believe that the Fair Tag is a better alternative, go to http://www.fairtax.org and join the cause. There is also a link there where you can send a petition to your congressional representatives opposing this progressive nightmare. Also, just so that you know Saxby Chambliss wrote me a letter stating that he introduced S.296 "The Fair Tax Act." Here is an excerpt of the letter he sent me:

"This bill, if enacted, would uproot our current unjust progressive tax code and replace it with a simpler, fairer one by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax....The Fair Tax is a consumption tax - the more you buy, the more you pay....And lastly, under this bill, every American would receive a monthly rebate check equal to spending up to the federal poverty level set by the Department of Health and Human Services guidelines. This rebate would ensure that no American pays taxes on the purchase of necessities."

I don't know about you, but I certainly would love to do away with filing income taxes every year! It would do away with our current system of withholding money from our paychecks. And all those people who currently get paid "under the table" will be paying their fair share of federal taxes (illegal immigrants, drug dealers, prostitutes, and the like).

The main drawback is that I believe our burgeoning Federal government will have more money with which to play.

ohhsweetconcord
3
Points
ohhsweetconcord 05/07/10 - 09:21 am
0
0
The VAT tax and fair tax are

The VAT tax and fair tax are pretty similar creatures. I think the AC sees the main difference as one is "American" and the other "European." All that means is that at the very least the VAT has been tried in Europe and is pretty popular there while the Fair Tax has never been attempted. Doesn't it make sense to use a proven tax system?

Another big problem with this Fair Tax is that the income divide in America is continuing to grow. Enacting a more regressive tax at this time is only going to make the problem worse for poor and middle class Americans. More fair = more regressive.

Also, what do people mean by the failure of the European system? Some European countries are doing better than America right now. It is mostly the southern, poorer PIGS (Portugal, Italy, Greece, and Spain) who are facing up to their profligate ways. All the north European countries are doing better than America right now and they all seem to like their VAT taxes.

The strongest arguement against the Fair Tax is pretty simple: it is unproven. The VAT has worked for many years and overall is pretty similar to the Fair Tax. Their both consumption taxes at their core.

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 09:31 am
0
0
Why must we consider an

Why must we consider an income gap, a problem? Why must we use a progressive tax to "fix" something that isn't a problem? Being successful while others are not is NOT a crime.

sjgraci
2
Points
sjgraci 05/07/10 - 11:14 am
0
0
OK you fair taxers, let's ask

OK you fair taxers, let's ask a simple math question. In a progressive tax system the highest bracket is 50% on taxable income above $999,999, how much tax would a someone pay on a taxable income of $1,000,000?

ohhsweetconcord
3
Points
ohhsweetconcord 05/07/10 - 10:04 am
0
0
Tigger, if the American

Tigger, if the American economic system isn't creating increased wealth for the poor and middle class then that is a problem. The average American family is poorer now than they were 10 years ago. The middle class is stagnant.That's a problem. America has the one of the lowest social mobility rates in the world. Another problem. Income gaps are a symptom of larger problems with the American system and they're also problems in themselves. People feel like they're being left behind.

No, I don't think its a crime to be successful in America. In fact, I think successful people like Bill Gates and Warren Buffett deserve every penny they have made. But we also live in a society and the successful have benefited most from the American system and they are also the most able to pay. Progressive taxation is the best method to get that payment.

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 10:08 am
0
0
No one should answer sjgraci

No one should answer sjgraci until he/she answers, without using wealth envy, how taxing people at different rates is fair.

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 10:15 am
0
0
Ohsweetconcord, America has

Ohsweetconcord, America has the richest poor people in the world.

ohhsweetconcord
3
Points
ohhsweetconcord 05/07/10 - 10:29 am
0
0
Tigger, that simply isn't

Tigger, that simply isn't true when you factor in all the costs of living. In other industrialized countries, the poor receive health care, public transportation, generally universal higher education, some countries offer child services for single mothers, etc. The list goes on and on. And it isn't just the poor that receive these services. Everyone does.

lsmith
105
Points
lsmith 05/07/10 - 10:29 am
0
0
The goal of government should
Unpublished

The goal of government should be to tax their people no more than is needed to run government. Our govenment constantly looks for more ways to spend money and then new and invasive ways to collect taxes to pay for it. I honestly don't know how anyone who works a 40 hour work week can take a look at their take home pay and be not be supportive of anything that makes their tax burden less. It goes without saying that the Fair tax is the best of all proposals. When millionaires spend their millions they'll pay all along the way. Those of us who have little money to spend will certainly benefit from that. Can you imagine having NO taxes taken out of your paycheck?

ohhsweetconcord
3
Points
ohhsweetconcord 05/07/10 - 10:30 am
0
0
Anyways, we're getting off

Anyways, we're getting off target. The topic at hand is the VAT. If its an efficient way to collect taxes then what exactly is the problem?

Kitten35
0
Points
Kitten35 05/07/10 - 10:42 am
0
0
"The fairest tax is a

"The fairest tax is a progressive tax? Really? A tax that is at a higher percent on some than on others is fair? Without using wealth envy, sjgraci, please attempt to explain that. Incredible."

Not wealth envy but practicality.

Here's why many feel it's fair.

Say you are a teacher, making $30K a year. Say, just for an example to be easily computed, that the universal tax is 15%. So you are really only making $25.5K a year.

You're a doctor making $200K a year. You get taxed 15% also. You still make $170K a year.

It is practically speaking, a whole heck of alot easier to live on 170K than 25.5K.

IT's not wealth envy--in fact, the teacher has probably gone to school for a master's as well, and, probably chose the profession. It's not her fault the profession isn't valued enough by taxpayers to fund it better (zing!).

It's fair to tax the dr one or two percent more, in order to maintain the community things that make a city, etc., as he will still have more than enough to live on and the teacher may fall below the poverty line.

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 10:42 am
0
0
The poor in America get free

The poor in America get free food, free housing, free health care, free cell phones, free education, and a check to boot. Who else gets so much?

Trey Enfantay
9
Points
Trey Enfantay 05/07/10 - 10:45 am
0
0
ohsweet - The major (and

ohsweet - The major (and only) difference y'all need to comprehend is that The Fair Tax replaces many existing taxes and abolishes the IRS. The VAT is 100% an additional tax. If that can't be comprehended, I can't help.

Kitten35
0
Points
Kitten35 05/07/10 - 10:44 am
0
0
And, personally, if you don't

And, personally, if you don't like paying taxes, you can move to an island somewhere. That's how the government works, and comparatively speaking, Americans collectively are taxed a whole lot less than other countries' citizens.

So move to an island, build a shack and live there, if you want to keep every red cent you make. Otherwise, welcome to society.

Tigger_The_Tiger
0
Points
Tigger_The_Tiger 05/07/10 - 10:47 am
0
0
It is wealth envy. If you

It is wealth envy. If you want to make what a doctor makes then become a doctor.Don't sit around complaining about how he makes more and should therefore be punished for it.

Kitten35
0
Points
Kitten35 05/07/10 - 10:50 am
0
0
And if you really want that

And if you really want that free cell phone, free housing, and free education, why don't you quit your hard-earned job and go ask for it?

Back to Top

Search Augusta jobs