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[Poll]

Valued Added Tax Solution

YES - I would support replacing the Tax Code with a 20% VAT

42% (14)

NO - I do not support replacing the Tax Code with a 20% VAT.

57% (19)

Total Votes : 33

(last vote on : 4/10/2010 5:59:28 AM)
(Poll will run till: -- )

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RE: Valued Added Tax Solution - 4/9/2010 11:31:39 AM

pahunkboy

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Butch- everything changes once we go further into the collapse. A depression. Not a recession.

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RE: Valued Added Tax Solution - 4/9/2010 11:33:01 AM

kdsub

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quote:

ORIGINAL: Archer

Huckabee is a supporter of the Fair Tax, so I guess you could call it his plan in an off hand sort of way.

But the plan predated his comming to the national scene.

I believe he is the only one who advocates meaningful change in our tax system with the power to do something about it. I think his political future is bright…or at least I hope so.

Butch

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RE: Valued Added Tax Solution - 4/9/2010 11:36:57 AM

Musicmystery

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quote:

with the power to do something about it

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RE: Valued Added Tax Solution - 4/9/2010 11:38:17 AM

Archer

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As far as presidential candidates he was I believe the only one to advocate the Fair Tax openly. But it's been a bill proposed in Congress for the past at least 6 years, always sponsored by Rep John Linder (R) GA. Last time it was HR 25 if i recall. Before Pelosi came to power it was a bi partisan bill with as many democrat co sponsors as republicans.

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Post #: 104

RE: Valued Added Tax Solution - 4/9/2010 11:38:22 AM

Musicmystery

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The Fair Tax is Flat Tax Lite. It's a huge tax cut for the wealthy.

VAT, however, based on spending, targets those with cash to blow.

And if they save and invest instead, also good.

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Post #: 105

RE: Valued Added Tax Solution - 4/9/2010 11:40:46 AM

pahunkboy

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US debt- was based on FRAUD. Therefor it does not have to be paid.

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Post #: 106

RE: Valued Added Tax Solution - 4/9/2010 12:10:03 PM

mnottertail

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fraudulently kite me a check, see if you aint gotta pay it. dont be so fucking droll.

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Post #: 107

RE: Valued Added Tax Solution - 4/9/2010 12:11:37 PM

pahunkboy

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quote:

ORIGINAL: mnottertail

fraudulently kite me a check, see if you aint gotta pay it. dont be so fucking droll.

Fine. Then YOU can pay it all.

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RE: Valued Added Tax Solution - 4/9/2010 12:12:50 PM

mnottertail

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nope, only gold and silver will have value not paper remember?, and we'll be taking yours to pay the debt.

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Post #: 109

RE: Valued Added Tax Solution - 4/9/2010 12:15:01 PM

pahunkboy

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quote:

ORIGINAL: mnottertail

nope, only gold and silver will have value not paper remember?, and we'll be taking yours to pay the debt.

LOL.

Correct.

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RE: Valued Added Tax Solution - 4/9/2010 12:52:59 PM

kdsub

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quote:

ORIGINAL: Musicmystery

The Fair Tax is Flat Tax Lite. It's a huge tax cut for the wealthy.

VAT, however, based on spending, targets those with cash to blow.

And if they save and invest instead, also good.

I have done some research on the Fair Tax and I'd like you to tell me why you think it would be a cut for the wealthy. Spending is spending and the wealthier will spend more and pay more...The poor will receive refunds to the poverty level.

The rate can and will be adjusted over the years and the government will receive a windfall from the likes of waiters and waitresses…illegal aliens…drug dealers and the like. I feel bad about including waiters and waitresses with drug pushers but lets face it a good part does not pay taxes as they should. As far as that goes the profits from all gratuity based jobs as well as side jobs will now be taxed when goods are purchased.

Butch

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Post #: 111

RE: Valued Added Tax Solution - 4/9/2010 1:04:34 PM

Musicmystery

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quote:

I'd like you to tell me why you think it would be a cut for the wealthy. Spending is spending and the wealthier will spend more and pay more...The poor will receive refunds to the poverty level.

It's slamming a flat tax into a pseudo-progressive mold.

It addresses the regressive part on the poor end, but leaves it at the wealthy end. Why do you think Steve Forbes is for a Flat Tax?

A VAT impacts only those who spend. Sheltering income doesn't let one avoid it. The only dodge is not spending, and in a nation with such poor savings, that's not a bad thing either.

Exempting necessities helps the poor. The rest are paying what they themselves have decided they can afford to spend.

I'd like to see it replace much of the income tax, all property taxes, and most sales taxes.

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Post #: 112

RE: Valued Added Tax Solution - 4/9/2010 1:18:45 PM

Mercnbeth

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quote:

I have done some research on the Fair Tax and I'd like you to tell me why you think it would be a cut for the wealthy. Spending is spending and the wealthier will spend more and pay more...The poor will receive refunds to the poverty level.

Use this example assuming food will be subject to 'Fair Tax'.

A family of four earning $50,000 spends 20% of their income on food = $10,000; subject to a 15% 'fair-tax' on their purchasers they pay $1,500. Their tax rate on food purchase is 3% of the their income

The same family of four with an income of $500,000 eats the same food, subject to the same tax paying the same amount of tax, $1,500. Their effective tax rate is 0.3%. Eating 'steak' every night or doubling their expense and the effective tax rate is 0.6%. To have the same tax rate the high income family of four would need to spend $100,000.00 annually on food.

Trust me - just because you can afford to have a shrimp appetizer, Caesar salad, steak and lobster, Opus One, with a cherries jubilee served with a fine port enjoyed while smoking an imported 'Portagas' cheroot every night - you don't do it. Sometimes - you just want a pizza.

Apply the number to any 'necessity' purchase and you see the fault in the concept. Trying to fix it, by setting up minimums, or exceptions accounting for circumstances, and the end result wouldn't be anyh different from the status quo.

'Fair' is a place you ride rides and buy cotton candy and popcorn, and does't exist when taxes are involved under any existing circumstance.

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RE: Valued Added Tax Solution - 4/9/2010 1:47:15 PM

Archer

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Merc, I'll have to debate you on this aspect.

The fair tax has no exceptions everything gets taxed they handle the poverty level thing with a prebate.

Family of 4 poverty level spending = (number pulled out of left ear) $23,000 a year.
Every family of 4 in the country thus gets a prebate of $5290 per year in the form of a monthly check for $440.80 to cover the taxes up to the poverty level of spending.
Thus the prebate will negate much of the regressiveness that every consumption tax tends to have.

I can tell you generaly speaking the wealthy will buy a better cut of meat every time they can overall. When I'm buying a sirloin they are buying porterhouse. and they will pay more tax because they buy more expensive things. They also buy more new things. It's not just food, it is rent vs new houses, it's new cars vs old beaters, it's spending on vacations vs staying home. The wealthy spend more total dollars per capita on new goods and services. because they can afford to do so.

The poverty rate spending of food shelter and such will be exceeded by most people, and it is that part that exceeds the poverty level that will have a net tax consequence.

That $50,000 family, that spends $10,000 on food has not reached the point where the food has any tax effect at all, since poverty level is at $23K in fact they have $13,000 left to spend on housing and other nessesities before they have a net tax at all.

There is a tendancy in the US to pretty much spend what you make, our savings rate is horrid.

So the $50K family will spend their entire 50K on something, but lets look at it closely

They can spend 23K with no tax consequences at all (prebated)
Thus they have 27K to spend on things that will have thier life above and beyond the poverty level.
Figure they buy a new car or a used one ? I'd guess used, thus no tax consequences
The thing about the Fair tax system is that you almost set your own tax rates based on the lifestyle you choose to live.
How far above the poverty level do you want to live? With that lifestyle how many things are you willing to buy used?

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RE: Valued Added Tax Solution - 4/9/2010 1:50:24 PM

slvemike4u

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Loved the fair/carnival line merc...very entertaining.

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RE: Valued Added Tax Solution - 4/9/2010 1:55:08 PM

mnottertail

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welll, I want to know more of the vat. so are raw goods vat? or is the tax in the value added?

that is, nothing for farm goods, veggies mushrooms oranges eggs milk ....but then processed foods are added value and then taxed on that? same with bomber clothing, and the gavinchi suits and pravda bags and cartier diamonds?

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Post #: 116

RE: Valued Added Tax Solution - 4/9/2010 1:55:23 PM

Archer

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MM all those pros you stated for the VAT are also pros that apply to the Fair Tax.

The Fair Tax is a consumption tax, it only applies to new goods So as you said about the VAT it only applies to those who spend.

It has no income checks at all, it taxes spending on all new goods. and thus the only two shelters are not spending and only spending on used goods.

The prebate does the same thing that the exemptions do to keep the poor from being hammered, except it keeps the lobbie from trying to get their industry exempted. It keeps the tax code very simple. If it is a new good or service it's taxed.

And it replaces not only the Income tax but all payrole taxes which are regressive as well.
It replaces Income tax, Social security tax and medicare tax.

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RE: Valued Added Tax Solution - 4/9/2010 2:08:53 PM

Mercnbeth

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quote:

Merc, I'll have to debate you on this aspect.

Archer,
I'm not going to be a good adversary - you got my best shot, admittedly given me when I took the other side of the argument with others over the course of time. I think it has some merit worthy of consideration.

When the gap is not as great as the example I gave the argument is weaker; however, when the 'tax the rich!' people begin to vocalize the focus will be more pointed on the +$250k types. The tax impact disparity there, as a percentage of income, will be the rallying cry to generate negative reaction. The benefit, even with the considerations you give at the 'poverty' level will not be as critical.

I also start to have problems when any fair tax discussion starts to create 'exceptions' and thresholds. Accounting for them all, considering the 'special interest' factors coming into play, and the end result is only a different version to what you have now.

Unfortunately the US is not homogeneous when it comes to cost of living. A family of four making $50k in rural Arkansas compares favorably to a family of four making $150k in LA. Setting a national dollar amount threshold does not level the field when it comes to the tax burden on the family.

In my opinion, VAT accounts for that condition and would be more equitable if applied on a national scale. However, I would only support it as a replacement method serving also to streamline, and bring efficiency to both the tax calculation and collection processes.

As stipulated, I'm not a good source for argument against a flat tax, because if it was given as a option to the current system, I'd advocate for it. However, I point to the first hurdle such an initiative would need to overcome.

Actually the 2nd - the first would still be the 'Million Attorney March' on Washington.

quote:

Loved the fair/carnival line merc...very entertaining.

Full credit to beth on that line. I stole it. her kids grew up with that response to "MOM - that's NOT fair!"

< Message edited by Mercnbeth -- 4/9/2010 2:13:58 PM >

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RE: Valued Added Tax Solution - 4/9/2010 2:19:01 PM

slvemike4u

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Tell Beth I loved it...only wish I had it while I was raising mine.

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Post #: 119

RE: Valued Added Tax Solution - 4/9/2010 2:28:28 PM

Archer

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Oh certainly Merc it merits examination. You are piointing to the idea that the Fair Tax, like any other consumption tax is going to be regressive to some extent.

Where that regressiveness really starts and ends is certainly something that can be debated.

Does it start when the first reasonable sized group of folks don't spend everything they make? (some will say that is the point hwere everything under that is pretty equal)

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