Author Topic: The VAT specter raises its ugly head...again  (Read 2813 times)

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Offline warpmine

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Re: The VAT specter raises its ugly head...again
« Reply #20 on: May 04, 2012, 02:45:57 PM »
I'm not saying I pine for a VAT tax - only that as a replacement for the progressive income tax, it would be preferable by a long-shot.

I See EW's point about sales tax "punishing" the poor, but an argument is easily made that a tax that does not kick in until one chooses to purchase something is the only voluntary tax possible. The poor and about 45% of the non-poor pay no federal income tax. We are at a tipping point of democratic tyranny when a simple non-tax-paying majority can elect to perpetually pilfer from the productive class. Replacing that with a sales tax - even a VAT tax - would eliminate that poisonous dynamic, and put skin in the game for nearly everyone.

I am not convinced that it would.  I think the portion of the voting public that pays no (federal) income tax is unlikely to realize what portion of their income is "stolen" from them in sales (or value added) taxes already.  I am assuming that they just attribute costs to cost of production without realizing that they always pay a significant markup on items in tax; and while that may not be a valid assumption, anecdotally it seems to hold.

My proposal to motivate tax revolt would be to require a "Tax Facts" label, like the ridiculous "Nutrition Facts" label required on food that details what and where the tax composition of a consumer good is.  Until everybody knows, I think the economically uneducated are going to continue to vote for tyranny.

/Alternatively, we could require that all schools teach Thomas Sowell's Basic Economics...
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Re: The VAT specter raises its ugly head...again
« Reply #21 on: May 04, 2012, 02:54:20 PM »
...My proposal to motivate tax revolt would be to require a "Tax Facts" label, like the ridiculous "Nutrition Facts" label required on food that details what and where the tax composition of a consumer good is....

Excellent idea. A conservative politician advocating a simple government accountability plan like that would be carried into office in every state that isn't +5 "D" safe. Mittens should run on it. It would serve the dual function of holding DC accountable to the people by using the same ridiculous types of moronic edicts they use to stick their fingers in the eyes of liberty at every turn.

Tangentially, I noticed a couple days ago on a bottle of Dawn liquid dish soap, the label header says, "Drug Facts". Drug facts. On dish soap. I don't know who is more moronic, bureaucrats who feel the need to label dish soap as a drug, or people who would look at it and somehow come to the conclusion that it is made for ingestion.

Alternatively, we could require that all schools teach Thomas Sowell's Basic Economics...

Another excellent idea.
"A strict observance of the written laws is doubtless one of the high duties of a good citizen, but it is not the highest. The laws of necessity, of self-preservation, of saving our country when in danger, are of higher obligation. To lose our country by a scrupulous adherence to written law, would be to lose the law itself, with life, liberty, property and all those who are enjoying them with us; thus absurdly sacrificing the end to the means."

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Online Pandora

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Re: The VAT specter raises its ugly head...again
« Reply #22 on: May 04, 2012, 03:21:07 PM »
Quote
Tangentially, I noticed a couple days ago on a bottle of Dawn liquid dish soap, the label header says, "Drug Facts". Drug facts. On dish soap.

Quote
“I have experimented with crude oil in Alaska and found that by injecting and placing DAWN DISH SOAP on the surface and directly over the oil will break up the crude oil and in some instances will completely dissolve the oil,” James B. wrote from Anchorage, Alaska. “WORTH TRYING.”

The BP spokesman said the dish soap idea isn't all that far from the dispersant the company is showering over the spill in hopes of breaking it up.

LINK

Quote
As one the worst oil spills in American history continues to wreak havoc in the Gulf Coast, local birds and animals are finding themselves muddied in toxic sludge. Surprisingly, volunteers and rescue crews are using a common household ingredient to clean up the oil-coated wildlife -- Dawn dishwashing liquid.
 
The “tough on grease” dish detergent, commonly found at kitchen sinks across America, is used by animal rescue and rehabilitation teams to help gently remove oil from feathers, fur, and skin of oil-soaked critters. Procter & Gamble, which owns Dawn, has donated thousands of bottles to wildlife conservation programs over the past 30 years, cleansing more than 75,000 animals.

LINK

And, of course, inevitably ...

Quote
Is it possible that BP’s irresponsible and hazardous use of millions of gallons of toxic dispersant is now catching up to them, as it seems signs of illness are starting to show in the workers BP hired to help clean up their catastrophic oil spill?

A quick rundown of three cases of BP workers and citizens in the area who seem to have been sickened by Corexit provides a clear picture.

LINK

Voila!  Drug facts on Dawn dish soap.
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Offline EW1(SG)

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Re: The VAT specter raises its ugly head...again
« Reply #23 on: May 04, 2012, 05:51:31 PM »

A sales tax only is the cleanest tax, eliminate food, basic clothing, doctor/prescription medication and housing sales tax and the poor are exempted from penalty.

One reason that I personally do not like sales taxes is that they make every entrepreneur into an agent of the government.  (Admittedly, so does income tax on wages.)  Having grown up in a sales tax free state, I still have not shed my annoyance at having to calculate the addition necessary to get something at the store, so the irksome value is also a factor.  

But most of all, sales tax is a tax on consumption, which I think is the wrong end of the marketplace to put it on.  I think it depresses production and innovation, where a flat rate income tax on wages would not.  Income tax is the successor to property tax, when property tax in an agrarian society was actually a tax on income potential.

The best solution is of course to reduce the government back to its constitutionally mandated functions, then see just how much revenue is necessary to accomplish those functions.  Then we could figure out if a simple tax structure would be sufficient to carry the day.
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charlesoakwood

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Re: The VAT specter raises its ugly head...again
« Reply #24 on: May 04, 2012, 06:25:53 PM »

Quote

The best solution is of course to reduce the government back to its constitutionally mandated functions, then see just how much revenue is necessary to accomplish those functions.  Then we could figure out if a simple tax structure would be sufficient to carry the day.


I can appreciate your resentment at having to calculate every transaction.
Having resided for some time in an income tax free (sales tax) state the
idea of paying two income taxes is revolting.  It is my choice whether I want
to pay tax or not.  If I want it I pay, if I do not want it I don't and I don't
pay any tax.

Offline EW1(SG)

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Re: The VAT specter raises its ugly head...again
« Reply #25 on: May 04, 2012, 06:41:22 PM »

Quote

The best solution is of course to reduce the government back to its constitutionally mandated functions, then see just how much revenue is necessary to accomplish those functions.  Then we could figure out if a simple tax structure would be sufficient to carry the day.


I can appreciate your resentment at having to calculate every transaction.
Having resided for some time in an income tax free (sales tax) state the
idea of paying two income taxes is revolting.  It is my choice whether I want
to pay tax or not.  If I want it I pay, if I do not want it I don't and I don't
pay any tax.


That is actually what bothers me about it:  your economic choices in the market have been circumscribed by the perceived tax penalty that you are unwilling to pay, and a vendor in the market is penalized for it!
My doctor told me to start killing people.  Not in those exact words, she said I had to reduce the stress in my life.

Same thing.

Offline trapeze

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Re: The VAT specter raises its ugly head...again
« Reply #26 on: May 04, 2012, 09:29:32 PM »
I agree that VAT is stupid in that it is a compounding sales tax. But it really is six of one or half a dozen of another because the state will set a simple sales tax at a rate that will (supposedly) meet the needs of revenue regardless if the tax is one way or another.

And yeah, it's pretty much true that government in general needs to be put on a diet...a machete diet where several limbs are hacked off would be a good start.

Here's the other thing about the income tax that is inherently unfair: It allows government to pick winners and losers via deductions and credits. This is no small thing because it gives legislators the power that they crave. These people need to be (figuratively) castrated...separated from this power. There is always a lot of talk about the need for term limits but if there was not as much power associated with being a legislator then maybe there would be less of an incentive to make a lifelong career out of it.

An elimination of income taxes (federal and state) in exchange for sales taxes seems to me to be a pretty good deal in a great many ways. Oh yeah, there would need to be a ban on "fees," too.
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Online Pandora

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Re: The VAT specter raises its ugly head...again
« Reply #27 on: May 04, 2012, 10:02:37 PM »
Revenues need to be raised in some manner, but the government requiring a cut of every sales transaction pisses me off.

The government's nose in my financial business as regards income pisses me off.

Please, no lectures about it's one way or the other.  As I wrote, a certain amount of revenue is necessary, but the collection methods of each are intrusive and they piss me off.  I'm tired of the government in my business.
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Offline trapeze

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Re: The VAT specter raises its ugly head...again
« Reply #28 on: May 05, 2012, 12:07:49 AM »
Please, no lectures about it's one way or the other.

A collection of lectures one way or the other is the nature of discussion or debate or argument. The above is my opinion and point of view. Others' mileage may vary.
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charlesoakwood

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Re: The VAT specter raises its ugly head...again
« Reply #29 on: May 05, 2012, 12:08:10 AM »

When you pay state tax via sales they don't know
anything about your business.

Offline trapeze

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Re: The VAT specter raises its ugly head...again
« Reply #30 on: May 05, 2012, 12:35:21 AM »
Good point.
In a doomsday scenario, hippies will be among the first casualties. So not everything about doomsday will be bad.

Online Pandora

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Re: The VAT specter raises its ugly head...again
« Reply #31 on: May 05, 2012, 01:18:52 AM »
Please, no lectures about it's one way or the other.

A collection of lectures one way or the other is the nature of discussion or debate or argument. The above is my opinion and point of view. Others' mileage may vary.

So I noted already, my comment was not related to yours, and I don't need a reminder.  More in line with EW's comment.  ::saywhat::   ::curtsy4::
« Last Edit: May 05, 2012, 01:57:29 AM by Pandora »
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Re: The VAT specter raises its ugly head...again
« Reply #32 on: May 05, 2012, 01:31:35 AM »

When you pay state tax via sales they don't know
anything about your business.


Never said that was the piss-off point for me as to sales taxes:

Quote
Revenues need to be raised in some manner, but the government requiring a cut of every sales transaction pisses me off.

By what authority do they claim a piece of every transaction in each state?  Because they "need" the money?  None of this is their business.
« Last Edit: May 05, 2012, 01:47:00 AM by Pandora »
"Under certain circumstances, profanity provides a relief denied even to prayer." - Mark Twain

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Offline EW1(SG)

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Re: The VAT specter raises its ugly head...again
« Reply #33 on: May 05, 2012, 04:30:08 AM »
Right now attempts to reform revenue generation by taxation are hampered by a persistent belief that the "poor" are owed something by the "wealthy."

As LadyVirginia pointed out, the poor have just as much an obligation to fund the legitimate activities of government as anyone else.  In other words, the most "just" or "fair" taxation policy requires that the poor pay the same tax bill (for the same level of service) as anyone else.  It is arguable that some individuals or entities consume a higher level of service than others, and that their taxes should be proportionate~leading to the conclusion that a sales or income tax probably is inefficient in recouping those costs.  It may be that there are other more equitable ways to levy taxes than either a consumption or an income tax.

But until we overcome the socialist notion that others are "entitled" to a portion of the national wealth that they did not contribute to, we will not be able to explore alternatives.
My doctor told me to start killing people.  Not in those exact words, she said I had to reduce the stress in my life.

Same thing.

Online Weisshaupt

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Re: The VAT specter raises its ugly head...again
« Reply #34 on: May 05, 2012, 08:20:00 AM »
The original federal government was supported by tariffs - but international and inter-state. Most goods that came from overseas were  finished luxury goods- and the founders wanted to encourage local manufacturing. So in effect our original taxation system was a tax on the "rich" - those who could afford to move large amounts of goods over the borders the Federal government controlled - and those goods, because of the extra tariff, often were the goods purchased by the "Rich"

If you read Madison's notes on the Constitutional Convention  you will find that the Founders did feel that the rich should bear a larger portion of the burden of government - because the primary goal of that Government was to protect property. The Rich had more property to protect, and therefore should be paying a higher proportion of the cost.

Now the government doesn't protect that wealth, it redistributes it. Its a criminal enterprise where the productive are extorted under threat to provide for the beneficiaries of the syndicate. We pay you off, you elect us and we rinse and repeat.

I have asked liberals why they don't split their dinner checks in the same fashion? Why do they not add up the earnings of everyone at the table and demand that they pay a fair share based on their percentage? I also asked how often he would expect his "rich" friends to go to dinner with "poor" friends, knowing that every time they would pay 98%  of the bill?  Than I ask about other people at the restaurant-- why don't they demand that the bill be split across every patron in the house the same way? After all, its not like you are friends with every taxpayer?  And why not across every Restaurant in the city?  And they why not every citizen - even if they didn't choose to go to a restaurant that night. You will find quickly that in their own transactions, Liberals define "fair" as "paying for what they consume" if they are the one paying - its only when they are "getting something for nothing" that "fair" is suddenly defined as ability to pay- regardless of actual consumption.  They will then usually argue that "they pay taxes too" and they don't get any return when the poor are helped.  I usually point out that it is THEY who want to help the poor using government programs, where I know that only 30% of every dollar goes to help anyone, 30% is wasted in fraud, and I choose to give to organizations where 90% gets where it is going, but I can't - because they just forced me to support it THEIR way by force.  What they get is THEIR WAY - without having to bear the full  cost of it. Its not different than ordering caviar and expensive wine  at the restaurant, and then demanding the a rich man across town, eating at home,  pay the majority of the cost of his meal.Of course liberals are  "happy to pay their  taxes"  - they get what they want, this fabulous  meal, but they get it at 1/10 the price because they force others to subsidize it. The rich man across town who pays, consumes none of it - he gets nothing HE wants - he is paying for what you want, and  are unwilling to pay the full cost of  yourself.

Taxation is required in any case. The compliance costs are probably the most important thing to look at - because they create millions of monkey jobs that don't  actually contribute to wealth production. You pay a guy to do you taxes,  and what is produced? Its Make-Work.  You are digging holes to fill them in again. They are cost centers for the society.  A flat income tax with no deductions is going to have the lowest compliance costs. Then a Graduated flat tax.   A flat vat tax will be the next lowest - for while it requires millions to become tax collectors, again the calculation is simple and collection is simple.

The IRS just sent us a tax bill for $70K. We failed to file a form. They in actuality owe use $400. Was was the cost of trying to enforce the tax code here? MichelleO spent nearly a day figuring out our mistake. What  other production could she have been engaged in. How much time did the IRS spend finding the mistake, and how much time will it take for them to enter and approve of the correction? What if they don't? What if we go to court over it? The costs are huge - and they produce NOTHING anyone can use.

In a properly functioning government, I think the Founder's principle still holds - that the rich "consume" more of the protective services, the courts, etc, than the poor will, and therefore SHOULD pay more.  A sales taxes takes care of that implicitly - the rich buy more of and more expensive goods.   I do not think the cost of government to the poor should be zero. They should pay something. And if they don't - you should get no vote. If you can't pay your own way in life , then you are not grown up or responsible  enough to vote.  Say that to a liberal and watch their face go red.


(edited by IDP to eliminate 6 inches of white at the bottom of post)
« Last Edit: May 05, 2012, 09:27:41 AM by IronDioPriest »

Online IronDioPriest

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Re: The VAT specter raises its ugly head...again
« Reply #35 on: May 05, 2012, 09:26:16 AM »
I must admit I'd not looked at sales tax from the angle EW does - that in addition to placing the decision about whether to incur tax on the consumer at the point of purchase, the decision to avoid tax by not purchasing dampens commerce and harms the private sector. Simple logic. I'd be ashamed for not seeing it if not for the enjoyment of expanding my point of view on taxes.

 ::hat-tip::
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Offline BMG

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Re: The VAT specter raises its ugly head...again
« Reply #36 on: May 05, 2012, 10:24:00 AM »
The compliance costs are probably the most important thing to look at - because they create millions of monkey jobs that don't  actually contribute to wealth production. You pay a guy to do you taxes,  and what is produced? Its Make-Work.  You are digging holes to fill them in again. They are cost centers for the society.

That 'cost of compliance' works out to 300-500 BILLION dollars spent each year with our current tax code according to the last stats I read.

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Online Weisshaupt

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Re: The VAT specter raises its ugly head...again
« Reply #37 on: May 05, 2012, 11:02:56 AM »
I must admit I'd not looked at sales tax from the angle EW does - that in addition to placing the decision about whether to incur tax on the consumer at the point of purchase, the decision to avoid tax by not purchasing dampens commerce and harms the private sector. Simple logic. I'd be ashamed for not seeing it if not for the enjoyment of expanding my point of view on taxes.

 ::hat-tip::

Any tax is going to dampen commerce.  Tax income, and I have less to invest to buy stuff with, and less incentive to earn the next dollar.  Tax sales, and I am less inclined to purchase. Tax activities and I am less likely to engage in those activities.

  There may be different degrees to which different methods affect growth, but I suspect those differences lie mostly in the additional compliance costs inflicted by those methods, and not so much is specific items that are taxed.  The point is you want to collect only the amount required for the services to be delivered ( and the redistribution  of wealth and "charity" are not services - or at least not services that we agreed to or that are in line with the principles of freedom. Once the government collects a tax for the not the general welfare, but for the  specific welfare of an individual or group and the expense of others, its indentured servitude - because that group becomes entitled by law to a share of my labor - they own it, legally. )

We could easily run the Federal government on current revenues if we had no entitlement systems, subsidies,  or handouts. Too bad  the only way such things will be eliminated is by the collapse of the system.



 

Online IronDioPriest

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Re: The VAT specter raises its ugly head...again
« Reply #38 on: May 05, 2012, 02:08:38 PM »
I must admit I'd not looked at sales tax from the angle EW does - that in addition to placing the decision about whether to incur tax on the consumer at the point of purchase, the decision to avoid tax by not purchasing dampens commerce and harms the private sector. Simple logic. I'd be ashamed for not seeing it if not for the enjoyment of expanding my point of view on taxes.

 ::hat-tip::

Any tax is going to dampen commerce....

Right, and I understood that. What I hadn't thought through was the idea that placing the decision of under what conditions tax is paid into the hands of consumers related to each purchase, would result in a direct negative impact on the likelihood of commerce even taking place, on each purchase at the point of each sale.

With flat income tax or even our current crappy progressive system, the negative effect is in real dollars remaining after tax, but not in your face at the point of sale. So while each purchase is impacted by the reality of available dollars, each decision to purchase doesn't hinge on whether one wishes to pay the particular tax at that particular moment. It would seem to favor the "out-of-sight, out-of-mind" ideal of a percentage of income, if only to aid in the perception of unfettered commerce at the point of sale.

Whether that is right or wrong thinking is not my point - only that I had not considered it before. I had always assumed that a sales tax would be superior because it would give consumers the most control, and put skin in the game for everyone. That other angle is something I had not looked at.

"A strict observance of the written laws is doubtless one of the high duties of a good citizen, but it is not the highest. The laws of necessity, of self-preservation, of saving our country when in danger, are of higher obligation. To lose our country by a scrupulous adherence to written law, would be to lose the law itself, with life, liberty, property and all those who are enjoying them with us; thus absurdly sacrificing the end to the means."

- Thomas Jefferson

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Re: The VAT specter raises its ugly head...again
« Reply #39 on: May 05, 2012, 02:40:48 PM »
I must admit I'd not looked at sales tax from the angle EW does - that in addition to placing the decision about whether to incur tax on the consumer at the point of purchase, the decision to avoid tax by not purchasing dampens commerce and harms the private sector. Simple logic. I'd be ashamed for not seeing it if not for the enjoyment of expanding my point of view on taxes.

 ::hat-tip::

Any tax is going to dampen commerce....

Right, and I understood that. What I hadn't thought through was the idea that placing the decision of under what conditions tax is paid into the hands of consumers related to each purchase, would result in a direct negative impact on the likelihood of commerce even taking place, on each purchase at the point of each sale.

Not just if so or not, but if so, then where?

Brick and mortar = pay the sales tax, and one county's tax is higher/lower than another's.

Online = weigh S&H as opposed to sales tax, and maybe pay both.

Quote
With flat income tax or even our current crappy progressive system, the negative effect is in real dollars remaining after tax, but not in your face at the point of sale.

No, not at the point of sale in this context, but often at the point where the cost of selling one's labor results in net loss of income.  People who are aware of where they are on the tax-bracket table will decide against a second income due to the tax implications, as will they keep overtime hours worked within a certain number.

Quote
So while each purchase is impacted by the reality of available dollars, each decision to purchase doesn't hinge on whether one wishes to pay the particular tax at that particular moment. It would seem to favor the "out-of-sight, out-of-mind" ideal of a percentage of income, if only to aid in the perception of unfettered commerce at the point of sale.

Whether that is right or wrong thinking is not my point - only that I had not considered it before. I had always assumed that a sales tax would be superior because it would give consumers the most control, and put skin in the game for everyone. That other angle is something I had not looked at.

This comes as such second nature to some it's almost subconscious.  The sales tax on a new vehicle in NJ (or NC) is prohibitive enough that some folks will opt for a used one instead for just that reason.  (I know my parents always did.)
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