V-A-T spells disaster

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

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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
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corgimom
38321
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corgimom 05/07/10 - 08:05 pm
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"If you pay 50 percent on

"If you pay 50 percent on $1000000 AGI, then you pay $500000. But I'm sure you probably didn't mean AGI. "

TTT, you are flat out wrong.

And yes, it would be 50 cents, because only $1 would be taxed at 50%.

It's not clueless, it's 100% right.

I got it right away, sgraci.

corgimom
38321
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corgimom 05/07/10 - 08:08 pm
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"Chillen, they will also

"Chillen, they will also defend the president who promised that he wouldn't raise their taxes, and I quote, "not one dime.""

That would be because the President doesn't raise taxes, Congress does.

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/07/10 - 08:17 pm
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If the President doesn't

If the President doesn't raise taxes, then why did he make the promise? Now you are defending a liar?

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/07/10 - 08:20 pm
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Let me correct the

Let me correct the quote.............."your taxes will not go up one dime." You are right...he didn't say HE wouldn't raise them, but he DID say they wouldn't go up............big fat lie.

KSL
143582
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KSL 05/07/10 - 08:26 pm
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Of course it's Congress that

Of course it's Congress that controls the taxes, so why did Obam even utter that statement?

KSL
143582
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KSL 05/07/10 - 08:29 pm
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Sorry, TTT, posted before

Sorry, TTT, posted before seeing yours.

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/07/10 - 08:30 pm
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Because he is a pathological

Because he is a pathological liar. How's that GITMO closing coming? Haven't heard much about it.

gaspringwater
3
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gaspringwater 05/07/10 - 09:00 pm
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Tigger The Tiger - You need

Tigger The Tiger - You need to get your file up to date. BUSH was the pathological liar. While Obama is just a kidder!

sjgraci
2
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sjgraci 05/07/10 - 11:08 pm
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Chillen I appreciate your

Chillen I appreciate your acknowledgement that my tax problem is correct. More importantly, I'm glad you understand how a progressive tax works. However, this is not correct: "The "true" American tax rate for that couple is probably between 50-60%. This rivals any European system out there."

Please keep in mind that several states do not have sales tax and even more do not have income tax. Still, the point of my post as is a fair tax and VAT in the editorial are federal programs and that is what I am clearly refering to with the US progressive income tax. But, even if you include all the taxes you suggest in the most taxed state - CA - it would be virtually impossible for the couple to pay 50% or more of their income in taxes under ordinary circumstances.

We have already established that they are only paying 31% tax on their taxable income even though the vast majority of their income is in the 35% bracket. Still, given that their before tax gross income is very likely much more than $1,000,000, that tax burden is likely in the mid to high 20% range. Additionally, the taxes you mentioned - and others - are deductible on the couple's federal income tax which contributes to lowering their tax liability percentage.

The "fair tax" would impose a consumption tax of 23% on all new good purchases. This is much lower than what the wealthy couple is currently paying in taxes. Also, as you eluded to, they are likely to save more than most Americans because they can. When they consume less of their income on purchases, their tax percentage is lowered even further.

A middle class family with a taxable income of $100,000 is already in the 25% bracket. Sounds great but as you already know, as a percentage their tax liability is only a little more than 17%. Percentage of gross inome is even lower. Still, they are likely to spend a good portion if not all of that income on consumer goods that are now taxed at 23%.

It should also be noted that state sales taxes are exclusive. This will be the same with the "fair tax" which will in that regard be 30%. Further, a man who I disagree with 90+% of the time, George W. Bush, stated that the tax would need to be closer to 33% just to keep the government functioning and that it will be a bigger tax burden on the middle class.

It is middle class families who will be hurt the most by the "fair tax". They do not qualify for "prebates" that are nothing more than "Socialist redistribution of the wealth entitlement programs." The "fair tax" is a fraud.

carcraft
28447
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carcraft 05/08/10 - 02:53 am
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When the government passed

When the government passed the income tax Americans were promised, assured and LIED to that only the wealthy would be taxed. The Government will keep raising the VAT tax along with the income tax. When you look at other countries tax structure people ignore the fact that we also pay state income tax and in many states a local VAT tax. If we went to fair tax and dropped the income tax for corperations (they would still pay their share of the fair tax on what they bought ) we could increase good paying jobs in America because corperations would move here for the tax relief instad of leaving..IT IS NOT THE JOB OF THE GOVERNMENT TO IMPOSE FAIRNESS..I don't see it any where in the contitution..please show it to me sjgracie or any other liberal..I will wait and wait and wait...

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/08/10 - 05:35 am
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Gaspringwater.........give me

Gaspringwater.........give me a lie Bush told........and here's the kicker.......back it up with evidence.

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/08/10 - 09:56 am
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Gaspringwater, was Obama just

Gaspringwater, was Obama just kidding when he said he would close GITMO in a year? Was he just kidding when he said your taxes wouldn't go up one dime? Was he kidding when he said there would be no lobbyists on his cabinet? Was he kidding when he said he would have the most transparent admin ever? Was he kidding when he said he would post all bills for the public to read before he signed them? Or were those all bald faced lies?

KSL
143582
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KSL 05/08/10 - 10:12 am
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Well, a lot of us knew he was

Well, a lot of us knew he was "kidding" when he said taxes wouldn't go up. We knew there was no way that he could promise and deliver on all he was campaigning on and not raise taxes. Obama is either really very stupid or he thinks the American people are. With his education background, I suspect the latter.

gaspringwater
3
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gaspringwater 05/08/10 - 12:57 pm
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Tigger The Tiger - I knew he

Tigger The Tiger - I knew he was kidding when he said taxes wouldn't go up. But I knew Bush was lying when he said his tax cuts for the wealthy would create jobs. And maybe it's impossible to find a political lawyer who hasn't been a lobbyist or took their money. Obama has released more into the public domain than Bush ever did. Bush and Chaney ran a secret society and they set a new record for classifying junk. They even tried to classify the White House visitors log. You'll recall the healthcare reform bill was posted on the internet and that's probably a first!

gaspringwater
3
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gaspringwater 05/08/10 - 01:06 pm
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Tigger The Tiger - I agree

Tigger The Tiger - I agree that closing Gitmo is coming along rather slowly. Bush and the Republicans accumulated that menagerie and the solution is obvious. The should be turned loose in the Red States. Texas is a good place. Don't you think that would be fair and appropriate? They were never guilty of anything anyway! No fair trial will convict them of anything and furthermore the government can't put them on trial. Because torture will get discussed in public.

gaspringwater
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gaspringwater 05/08/10 - 01:21 pm
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Tigger The Tiger - I need not

Tigger The Tiger - I need not say more than this. Colin Powell had an honorable and distinguished career until that fool delivered Bush's lies at the UN. Before the whole world too!

KSL
143582
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KSL 05/08/10 - 01:35 pm
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Gasping, you say the

Gasping, you say the prisoners at Gitmo were never guilty of anything. So how do you explain so many of them returning to the battlefield after being released.

gaspringwater
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gaspringwater 05/08/10 - 01:49 pm
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KSL - If I'd been captured

KSL - If I'd been captured and tortured; I'd get my pound of flesh when I got out. They may have been guilty of nothing in the beginning but we've harden them. We're good at creating enemies! And it's very necessary for our politicians to have booger-boos to scare the public.

KSL
143582
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KSL 05/08/10 - 01:49 pm
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Gasping, In reference to

Gasping, In reference to your statement "You'll recall the healthcare reform bill was posted on the internet and that's probably a first," it took me a maximum of 2 minutes to find this site and read about it. If you want to maintain your credibility, it would behoove you to do a little research before spouting out your assumptions. http://thomas.loc.gov/home/abt_thom.html

KSL
143582
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KSL 05/08/10 - 02:23 pm
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I don't guess you heard some

I don't guess you heard some were captured on the battlefield.

gaspringwater
3
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gaspringwater 05/08/10 - 02:25 pm
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KSL - Excuse me but the bill

KSL - Excuse me but the bill was printed out and put on display in the Columbia county library. An ominous stack of papers too. You don't have to read that much to pass college English. Or physics either.

KSL
143582
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KSL 05/08/10 - 02:40 pm
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Gasp, you stated that posting

Gasp, you stated that posting the health care bill on line was probably a first. I fired back at you that it took less than two minutes to find out that there has been a site posting bills online since 1995. I don't know what that has to do with the Cola County Library printing out the ridiculous health care bill.

Oh, and I have easily had to read over 2000 pages to pass many of my college English Lit courses. Had to read the entire works of Mark Twain in one course just for one term paper.

gaspringwater
3
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gaspringwater 05/08/10 - 02:58 pm
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KSL - Without a doubt the

KSL - Without a doubt the military rounded up some miscellaneous people and roughed them up with righteous zeal. Set them to GITMO for more thorough roughing up. And the Republican politicians said - See what we did! We're saving the world and protecting you. Ain't we doing good! Peddled the prisoners for all the mileage they could get out of them and then turned them loose quietly around the world. Washington has to bribe places to take them. Some countries get millions for accepting a "dangerous" GITMO prisoner. Guilty of nothing but being in the vicinity when the military galloped up.

KSL
143582
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KSL 05/08/10 - 04:10 pm
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And you get this information

And you get this information from where? Sources, please.

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/08/10 - 05:48 pm
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I notice you never offered

I notice you never offered any evidence of a lie that Bush told. Typical.

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/08/10 - 08:13 pm
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chirp, chirp, chirp, chirp

chirp, chirp, chirp, chirp

corgimom
38321
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corgimom 05/09/10 - 04:53 am
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Watch out, TTT will demand

Watch out, TTT will demand that you provide a quote from a book that you don't own, didn't own, and never will own- as in a library book. *snort*

Tigger_The_Tiger
0
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Tigger_The_Tiger 05/09/10 - 07:58 am
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Yeah....it sucks when people

Yeah....it sucks when people ask that you back up what you say with proof...........drives people crazy.

KSL
143582
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KSL 05/09/10 - 08:02 am
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Gee, Gasp, if they are so

Gee, Gasp, if they are so innocent (guilty of nothing but being in the vicinity when the military galloped up) why won't other nations take them? You say they are innocent. Again, where is your backup for that statement? How do you know?

Kitten35
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Kitten35 05/09/10 - 10:49 am
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"Tap danced around, kitten,

"Tap danced around, kitten, but failed to answer."

Nope, just didn't want to develop carpel tunnel syndrome from typing the same things I already typed. Just go back and read the posts, it's already explained.

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