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Mercnbeth -> Valued Added Tax Solution (4/8/2010 9:24:56 AM)
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Often, usually when cornered and the 'good intent' or '...think of the children' last resort arguments are employed concerning all the money wasted on entitlement programs, the accusations take on "...well you use the roads!", "...you have police and/or fire protection!", etcetera, etcetera, etcetera. More surrender than argument, but it happens.
However, its come to my attention that almost half of my fellow Americans don't pay one penny in income tax!
Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.
Well hell - do these people use the roads? Are they protected by the police and fire departments? Yeah - police & fire are local, but few, if any, States and local municipalities are not receiving any Federal Funds.
Once at a zero tax base - the comfort in knowing that contributing nothing enables you to consider only one half of the budgetary formula, you want more entitlements and free stuff! Similar to the mortgage crisis; "Yeah, I know I over bought and now can't afford my house; but those who didn't overextend have money - I want it used to pay my mortgage payment!"
The VAT is the solution to this situation. Although the first step would be to change the name. There is no 'value', at least under current conditions, in the government's social and economic redistributions programs. Also, the VAT would have to replace and not be an add-on additional source of revenue. It would be the primary, or only source outside tariffs, permits, and access fees, to generate tax revenue.
Eliminate the entire Federal income tax code on both Corporations and individuals and replace it with a 20% VAT. No exemptions, no deductions, and each and every operating entity and individual subject to paying it for each item purchased. The Corporate Jet - my next door neighbors 'VOX Mansion' listed 'Reduced to $5.5 Million', a gallon of gas, the Oxtail needed or oxtail soup; all subject to a 20% federal tax.
No filing, no cheating, no deductions; it will separate the charitable from the pragmatic when it comes to donations. It will eliminate the envy projected toward those 'tax deductable' business trips to Europe and the Vegas corporate conventions. Every penny spent would not be taken from government revenue, just the opposite - it would generate more. Who knows - manybe even enough to pay for a real national health program.
The only problem I see would be the 'underground' ecconomy. The crack dealer somehow wouldn't collect let alone send, 20% of his sales to the Fed; however he's not doing it now anyway. I guess a controversal correlary of this would be to eliminate the transfer of assets by paper or coinage and set up a National debit card - but that may be too Orwelian.
If it works - exend it locally; 1% at the State level, a fraction of a percentage at the local municipalities. No more RE taxes would offset the panic which would insue in the RE market when mortgage interest was no longer deductible.
Granted, this is purely an academic debate; Just the threat of implementing this would result in a 'Million Man March' on Washington formed by Attorneys, and Tax Accountants, and members of Congress who would lose a good portion of the special interest PAC money.
However, for personal curiosity if nothing else, are you willing to level the playing field for tax revenue? I think the handicap on the accompanying poll to have the 'NO' side favored by 47% representing the number of people not paying a penny now. I doubt they will all of a sudden decide to be altruistic and want to pay for their use of roads, police and fire. They just want their "fair share". The problem is, how do you distribute a fair share of $0.00?
PS - More interesting news on the economic front today:
The Labor Department said Thursday that first-time claims increased by 18,000 in the week ended April 3, to a seasonally adjusted 460,000. That's worse than economists' estimates of a drop to 435,000, according to a survey by Thomson Reuters. Imagine what it would have been if a few hundred thousand of census workers weren't hired.
Here's a solution - take the census every year and make those government employees permanent and give them all bureaucratic assistants and supervisors. Oh yeah right - that would require even more tax revenue from he dwindling group of 53% paying, and wouldn't net to any more revenue coming into the Federal coffers.
I makes me wonder if the Administration and Congress is aware of this when they pointed to a positive trend after all these temporary government employees came on-line during the last unemployment period?
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