[Osedax]

VAT: Will the U.S. Adopt a Value-Added Tax? - EconWatch - CBS News

The U.S. should consider using a European-style value added tax to help bring the deficit down, said White House adviser Paul Volcker in response to a question from CBS MoneyWatch.com at a panel discussion in New York City Tuesday night. "We have to think about really revamping the tax system," said Volcker, who's best known for successfully beating down inflation while serving as Ronald Reagan's Federal Reserve chairman. The VAT, a levy on all the goods and services you consume, is not a "toxic idea," he added.

Until recently, discussion of a U.S. VAT had been limited to the back rooms of think tanks and cocktail hours of high-minded conferences. But nearly every other industrialized nation has one, and the idea is beginning to spread. In addition to Volcker, the head of the Senate Budget Committee, Kent Conrad (D-N.D), has mused that a VAT has "got to be on the table," and Speaker of the House Nancy Pelosi (D-Calif.) has murmured sweet nothings about it. In fact, interest in a VAT is cropping up all along the ideological spectrum (albeit more often along the leftish end).

The case for a VAT is simple: The U.S. government's fiscal gap is widening by the hour. The deficit for 2009 alone was a cool $1.4 trillion, and it's projected to hit $1.6 trillion this year. By the end of the year, the Office of Management and Budget says the gross federal debt will stand at $13.8 trillion. As Bruce Bartlett, a former Reagan economic advisor who supports a VAT, puts it, "The U.S. needs a money machine." A VAT, because it touches every transaction, is just that: The Congressional Research Service estimates that each one percent of a value-added tax would raise $50 billion. That's real money.

[mduell]

So we only need 100% VAT to close the budget gap and pay off the debt in a reasonable time period?

[Big Mac]

I'd support a VAT under the following conditions:

1. It would have to have an ironclad sunset provision after which any attempt to extend it would have to be passed again by both houses of Congress
2. Its proceeds would be guaranteed toward paying down national debt
3. Government services, including public and private entitlements, would be cut by an amount equal to or greater than the revenue brought in from the VAT

[turtle777]

You could have just said Fukc No and be done with it.

-t

[Lint Police]

Welcome to the United Liberal States of Utopia, where everything is taxed and everything is free.

Oh wait....

[smacintush]

OMG THAT'S IT! THAT'S WHAT WE NEED! MORE TAXES!

I wish that someone would have thought of that before then we wouldn't never have had a debt problem.

[mattyb]

I always thought that VAT = Sales Tax. But then your Sales Tax is a State thing and not a National thing isn't it? Hence the ability for the States to charge whatever percentage they want?

[OAW]

A Sales Tax and a Value Added Tax (VAT) are related ... but they are not necessarily the same. In short, a VAT is just one type of Sales Tax. Generally speaking, in the US a "sales tax" is a tax imposed on consumption at the retail level. However, a VAT can be levied on any/all stages of the process that brings a product to market.

Value added tax (VAT) avoids the cascade effect of sales tax by taxing only the value added at each stage of production. For this reason, throughout the world, VAT has been gaining favour over traditional sales taxes. In principle, VAT applies to all provisions of goods and services. VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government. If, however, the purchaser is not an end user, but the goods or services purchased are costs to its business, the tax it has paid for such purchases can be deducted from the tax it charges to its customers. The government only receives the difference, in other words, it is paid tax on the gross margin of each transaction, by each participant in the sales chain.

OAW

[BadKosh]

Even though the dems were there to see tax cuts stimulate the economy they never learn. The extra taxes are paid out as corruption money to such creeps as ACORN, and all the new lil acorns and of course the union thugs.