Economics

The Coming VAT Tax?

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Reuters' James Pethokoukis reports on "Obama's not-so-secret plan to raise taxes" via a European-style value-added tax (VAT):

Even after the recession, there might be a 6 percentage point difference between what Uncle Sam spends as a percentage of GDP and what it takes in. Liberals like Krugman have no problem with making up that difference purely through higher taxes, even though that translates into raising the national tax burden by at least a third. And that, even though such a massive hike might well have a crushing effect on growth.

Obama wants a VAT? First, it should be part of broader tax reform, including getting rid of capital gains and corporate taxes. Second, it should accompany an Economic Bill of Rights much like Ronald Reagan used to suggest. Its elements: a) a balanced budget amendment, b) a line-item veto, c) a spending limit such as inflation plus population growth, d) and a two-thirds vote in the House and Senate for any tax increases. (Reagan also wanted a prohibition on wage and price controls. That would likely kill ObamaCare.)

And come to think of it, let's cut spending and streamline government before cash-strapped, wealth-reduced taxpayers are forced to pony up a penny more, OK?

More here.

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  1. The libs blame supermajorities being needed for tax hikes for all of CA’s problems – I don’t see them going along w/ one on a national scale, and I don’t see it mattering w/ Barak “its not a tax unless I say its a tax” Obama in the White House.

    1. Requiring a supermajority for tax hikes is a good start, but we should also require a supermajority for the state to take on any debt or run a deficit.

      -jcr

  2. “The Coming VAT Tax?”

    *Another* tax on a tax?!

  3. European-style VAT? Hell no. If, on the other hand, the FairTax proposal passes, that would replace all federal taxes with a one-time sales tax on all goods and services. It would save us a fortune in compliance costs alone.

    -jcr

  4. Obama is pissing in the wind on this one. He is going to run out of time. He has healthcare and cap and theft to try to ram through before this and he only has a few months to do it. Come next summer, the election will be appraoaching and no one will want to vote for the largest tax increase in history. Once the Dems get killed in 2010, all these dreams will be dead on arrival.

    But it does show the danger of bitching about the deficit as opposed to spending. You can always fix the deficit by raising taxes. And bitching about the deficit and not spending just gives statist an excuse to do so.

  5. uh good ideas except line item veto has been declared unconstitutional by the SCOTUS.

    1. Hence the Amendment part.

      1. sorry, I thought they were talking about just passing legislation called an economic bill or rights, I didn’t realize they were talking about actually amending the constitution.

  6. If Obama says this isn’t a tax increase on people earning less than $250,000 a year, then it isn’t. Right, Tony?

  7. What a wasted opportunity for a Fallout 3 pun in the article title. Tsk, tsk.

  8. I’ll go get the money to pay this from the ATM machine.

    1. You remember your PIN number?

    2. Looks like someone’s coming down with RAS Syndrome.

  9. I find it difficult to think in this new format.

    1. I’m discombobulated.

      1. I’m, I’m, weakened. This format change is like Libertate kryptonite!

        Just kidding, Mike. Look forward to seeing the finished product–blink tags and all ?

        1. I am uncomfortable with this and I have lots of questions:
          Do I need to quote someone when I reply to them? My other questions are more or less follow-ups to that.

          1. I’m not sure this works for me very well. I appreciate the hard work that Mike and, I assume, others have put into the format change, but this threaded comments business makes it harder for me to track a thread, not easier. Maybe it’s my aging brain.

            Are we losing access to the HTML tags we had previously, like blockquotes? That would make me sad.

            1. When we reply to other comments, will the page keep getting wider and wider as we reply?

              1. And how can I find that out? Do I have to keep replying to myself?

                1. Never mind. The question has been answered.

          2. I am uncomfortable with this and I have lots of questions:

            Are any tags working?

            1. Italics still work.

  10. And come to think of it, let’s cut spending and streamline government before cash-strapped, wealth-reduced taxpayers are forced to pony up a penny more, OK?

    Come to think of it, Where the fuck’s my PONY?

  11. Liberals talk about the deficit as if spending were not a part of it. We only have deficits because we are undertaxed. I forget who, but some nitwit on the WAPO editorial page a few weeks ago said the problem with California is that it “wants to be taxed like libertarians and spend like socialists”. California has some of the highest tax rates in the country.

    Expect that to be the memme in the MSM over the coming months. We are all under taxed, that is why we have a deficit. And when the government finally goes belly up, it will be those evil tax payers fault for only being willing to fork over 20% of their wealth to support the government. The government wasting and stealing trillions of dollars over decades will have nothing to do with it.

  12. In addition to carping about the lack of a “remember me” function, let me also bitch about the loss of the ability to go straight from one post to the next. Now I have to go back to the Hit ‘n’ Run main page and scroll down.

    Since when are upgrades supposed to decrease usability?

  13. So, with threaded comments, if someone replies, it won’t show up at the bottom. That means one has to look at the whole thread to see new comments, right? That seems problematic for our longer threads.

  14. “So, with threaded comments, if someone replies, it won’t show up at the “bottom. That means one has to look at the whole thread to see new comments, right? That seems problematic for our longer threads.”

    Very much so. You are better off having just a long running comment thread.

  15. one has to look at the whole thread to see new comments, right? That seems problematic for our longer threads.

    Just wait ’til MaunderingNannyGoat shows up. I predict clusterfuckery.

    Threaded comments are, you know…

    *whispers*

    Fascist.

  16. And what’s the deal with the double-clutch fade out, fade in when the comment appears after submit?

    Warty, is that you?

    There’s no point in typing my spoof email address if nobody can see it.

  17. And what’s the deal with the double-clutch fade out, fade in when the comment appears after submit?

    Be happy with that flare instead of glitter and blink fonts, wouldja?

  18. A prohibition on wage and price controls? We already have that; it’s called the Constitution. A lot of good it’s done.

  19. Oooh, a VAT, just what I asked Saint Obama for Christmas!

    These liberals that think we don’t pay enough, are lunatics. Most are already fooled into thinking that they don’t pay much at all in taxes. You ask anyone in lower middle class with a couple kids how much they paid in taxes last year, and they’ll usually say they got a rebate. They don’t have a clue.

    As for the new format, I’m not sure I like it.

  20. I agree, aelhus. If I could change only one thing about our tax system, it might just be getting rid of withholding altogether.

    Make people write a fucking check to the feds for income, Medicare, and SSI, and their attitude toward big government would probably change overnight.

  21. Obama wants a VAT? First, it should be part of broader tax reform, including getting rid of capital gains and corporate taxes.

    Good luck with that. Countries that have established a VAT normally does it without changing any of the other taxes very much. It is also a highly regressive tax.

  22. in addition to writing a check, I’d like to see companies put the embedded taxation that they have to pay on their price tags and receipts. If you were going out to but a TV, and the price tag said $699.99 + 237.54 federal tax + 70.35 state sales tax = total/1007.88, people would absolutely be angry about it. Instead, too many are angry at corporations.

  23. Here in California, the Governor’s much-touted commission has recommended a VAT, and Schwarzenegger is said to be pushing for legislation “within the year” that implements the recommendations.

    Ya know, if I wanted to live in Europe, I would already be there. But no! Self-styled reformers seem determined to bring Europe to ME.

  24. Obama wants a VAT? First, it should be part of broader tax reform, including getting rid of capital gains and corporate taxes.

    My bro and I argue about this all the time. I don’t trust any reform that doesn’t explicitly lower or get rid of existing taxes before adopting a new system of assessment. Even before you can honestly get started on that you must also deal with spending, or else you are left with revenue neutral options like the fair tax idea.

    He is a Boortz Republican with quite a bit of supply side thrown in, so it is difficult to reason with him on these points.

  25. Just wait ’til MaunderingNannyGoat shows up. I predict clusterfuckery.

    Are you suggesting that we didn’t have clusterfuckery already??

    Escpecially when MisterNotGonnasayhisname was about???

    Throw my vote in with the ones who don’t like the visual threading.

  26. The only way I would support a federal VAT is if it included a repeal of the 16th amendment.

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