Article

2010-04-07 Economy

Volcker: Taxes likely to rise eventually to tame deficit

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by Steve White 2010-04-07 00:00|| || Front Page|| [8 views ] Top

#1 And they think consumer spending is low now?

Posted by Cheresh Black7582 2010-04-07 02:12|| 2010-04-07 02:12|| Front Page Top

#2 More trail baloons from the bafoons. Bend over, here it comes again (BOHICA)!

"Value Added" WHERE? Yes indeed, the Germans love their 20% VAT! Try adding another $5k to $7.5k on to the price of a moderately priced new or used automobile and see where car sales end up. We'll then have state and local sales tax, and a Federal VAT as well (followed by State and City VATs later of course). What's not to like about that?

Posted by Besoeker 2010-04-07 04:59|| 2010-04-07 04:59|| Front Page Top

#3 As the sign in the STD clinic reads, "Erections Have Consequences."

Posted by Black Bart Ebberens7700 2010-04-07 06:49|| 2010-04-07 06:49|| Front Page Top

#4 VAT is a tax on incomes. It's probably also the worst possible tax if you're "progressive" as it tends to tax the poor a lot more than the rich as a %age of salary.

Posted by Bright Pebbles 2010-04-07 06:50|| 2010-04-07 06:50|| Front Page Top

#5 Anticipating hyperinflation? When you have too much money floating around, one way to reduce it is by higher taxing to move it out of circulation. Now why would we be facing hyperinflation Paul? /rhet question

Posted by Procopius2k 2010-04-07 07:23|| 2010-04-07 07:23|| Front Page Top

#6 VAT is a tax on consumption, not income. That is why it is not progressive.

We don't have a tax problem, we have a spending problem.

If we got our spending under control, I wouldn't mind a VAT, even a progressive VAT, i.e. 1% on Items under $10, 3% on Items $100-$100, 5% on Items $100-$1,000 etc.

Paul Ryan's Roadmap for American includes a VAT disguised as a Business Sales Tax. If enacting a VAT would allow the elimination of the Income tax, including repeal of the 16th amendment, I would be all for it.

More here via Instapundit. The hot topic today.

Posted by Nimble Spemble 2010-04-07 09:26|| 2010-04-07 09:26|| Front Page Top

#7 Would it be accurate to say that the FairTax is essentially a VAT with a "prebate" check payment system in place to attempt to eliminate any regression?

Posted by ExtremeModerate 2010-04-07 10:23|| 2010-04-07 10:23|| Front Page Top

#8 VAT is still the worst kind of tax. It lowers the purchasing power of your income.

The "fair" tax is probably the worst name going.

Best Tax is a Land Value Tax. Adam Smith & David Ricardo both give it a thumbs up.

Posted by Bright Pebbles 2010-04-07 10:55|| 2010-04-07 10:55|| Front Page Top

#9 unfortunately no other taxes will be reduced and no corresponding spending cuts will ever happen.

Liberals will more likely do VAT tax like this:
FOXnews +15%, CNN -5%
Toyota +15%, GM -5%
Cigarettes +25%, Marijuana 0%
Republican Voter registration +15%, Tea Party +25%, Democrat -20%
American +15%, Illegal Alien -5%

Posted by airandee 2010-04-07 11:55|| 2010-04-07 11:55|| Front Page Top

#10 VAT? No. If they are going to impose a consumption tax then just impose a sales tax so EVERYONE can see what they are paying, right then and there, to the government.

Same goes for income tax - no more withholding, just a bill every month for estimated income tax, like a credit card bill, and you have to pay it off either monthly or in a lump sum at the end of the year when you file.

Let people realize explicitly how much the Government takes from them.

Posted by Beldar Threreling9726 2010-04-07 13:37|| 2010-04-07 13:37|| Front Page Top

#11 I agree with beldar on the sales tax but the monthly billing? What if you don't pay? Debtors prison? Or hard labor camps?

Posted by chris 2010-04-07 14:24|| 2010-04-07 14:24|| Front Page Top

#12 VAT is a much better consumption tax than the USA's current sale taxes. Although, beware that it will be federally administered and hence they get to chose which states get the revenues. Left of center governments will screw states enacting right of center policies. We have exactly this problem in Australia at the moment, where the federal Labor government has made a huge cut in GST (VAT) revenues going to Western Australia, the only Liberal (right of center) governed state.

Think of a federally adminstered VAT as welfare for badly run states.

Sorry NS, but a progressive VAT isn't possible. It would result in a washing machine being sold in 500 pieces to attract the lowest level of tax.

Posted by phil_b 2010-04-07 21:44|| 2010-04-07 21:44|| Front Page Top

#13 phil - the VAT will not replace sales tax. It will be in addition, for sure

Posted by Frank G 2010-04-07 22:08|| 2010-04-07 22:08|| Front Page Top

#14 phil - the VAT will not replace sales tax. It will be in addition, for sure

Canada tried that for a while and is now in the process of converting provincial sales taxes into provincial GST (VAT).

The problem with provincial (US state) VAT is it opens up widescale fraud, already a big problem in Europe where EU countries levy different VAT rates.

Which removes one of the big advantages of a VAT - fraud is difficult (with a uniform rate).

Posted by phil_b 2010-04-07 23:06|| 2010-04-07 23:06|| Front Page Top

23:43 JosephMendiola
23:36 JosephMendiola
23:32 JosephMendiola
23:26 Redneck Jim
23:24 trailing wife
23:13 JosephMendiola
23:11 JosephMendiola
23:07 JosephMendiola
23:06 phil_b
23:04 Phiter Stalin5608
22:48 Barbara Skolaut
22:43 trailing wife
22:39 Redneck Jim
22:33 Asymmetrical Triangulation
22:26 gromky
22:08 Frank G
22:08 Barney Frank
21:44 phil_b
21:25 Pappy
21:19 JosephMendiola
21:11 ryuge
21:03 Thains Untervehr9750
20:56 Frank G
20:41 Kelly