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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Tigger_The_Tiger
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Tigger_The_Tiger 05/09/10 - 11:24 am
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tap, tap, tappity, tap

tap, tap, tappity, tap tap........dodge.

Tigger_The_Tiger
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Tigger_The_Tiger 05/09/10 - 11:25 am
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The progressive tax system is

The progressive tax system is explained over and over........nowhere is it explained how taxing someone at a different rate is "fair."

Kitten35
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Kitten35 05/10/10 - 08:22 am
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"tap, tap, tappity, tap

"tap, tap, tappity, tap tap........dodge.
The progressive tax system is explained over and over........nowhere is it explained how taxing someone at a different rate is "fair.""

That requires a 'connect the dots' approach. Thinking.

Tigger_The_Tiger
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Tigger_The_Tiger 05/10/10 - 04:10 pm
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dodge, parry, spin,

dodge, parry, spin, thrust...........still no answer.

libertarianvoter
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libertarianvoter 05/12/10 - 12:12 pm
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Correct me if I'm wrong, but

Correct me if I'm wrong, but I thought the Fair Tax was a sales tax. If you are poor, shouldn't that also mean that you're spending less than the Warren Buffets of the world? That means if you're poor that you're paying less taxes still, right? Why on Earth would someone making 25k a year buy more stuff than someone making 100k a year?

I don't understand the complaint with this. To me, it seems the only people it would hurt are the people that abuse the current entitlement system. (people that get welfare, but still somehow find the money to buy expensive, luxury items)

Also, their website says this: " The FairTax actually eliminates and reimburses all federal taxes for those below the poverty line."

If someone could correct me about the Fair Tax, I would appreciate it. I also think that spending needs to be cut back drastically. (no more unnecessary wars or entitlement programs for those that do not deserve it)

Trey Enfantay
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Trey Enfantay 05/12/10 - 12:17 pm
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Considering the Fair Tax

Considering the Fair Tax books were written by a Libertarian (Neal Boortz). I would "assume" that everybody who claims such an association would be familiar with www.fairtax.org to answer all the questions on how it works. You are welcome.

libertarianvoter
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libertarianvoter 05/12/10 - 12:22 pm
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I am familiar with most

I am familiar with most Libertarian views. I only claim them because I know all too well what Republicans and Democrats stand for, and my ideas usually fall in line with less government across the board (which is the stance of the Libertarian Party). My user name was created to avoid the "Why don't you go watch Hannity" or "Why don't you go watch Olberman" comments b/c I'm neither Democrat nor Republican.

libertarianvoter
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libertarianvoter 05/12/10 - 12:24 pm
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I also think I understand the

I also think I understand the Fair Tax, but some of these comments calling it regressive do not make sense to me. I was hoping someone from the opposing side could "correct me if I'm wrong." I don't assume to know everything about a topic, so I'm always open to corrections. I hope that makes sense.

Trey Enfantay
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Trey Enfantay 05/12/10 - 12:45 pm
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libertarianvoter - It's all

libertarianvoter - It's all good. I merely provided the link in case you were not already familiar with it. It has a Q&A section that answers all of the ignorant challenges to it. It is a carefully researched plan. It is having trouble gaining traction on Capitol Hill because it reduces the power of the Imperial Government. Also, it pays to listen to and read all sides, I used to tune into Air America on occasion. It's better to know thy enemy.....

Trey Enfantay
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Trey Enfantay 05/12/10 - 12:46 pm
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