25% national sales tax would pay for universal health care, balance the budget and exempt most Americans from the income tax

[w¡n9Nµ7 §£@¥€r 123]

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

...

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families.

...

White House Budget Director Peter Orszag ... has hired a prominent VAT advocate to advise him on health care: Ezekiel Emanuel, brother of White House chief of staff Rahm Emanuel and author of the 2008 book "Health Care, Guaranteed." Meanwhile, former Federal Reserve chairman Paul A. Volcker, chairman of a task force Obama assigned to study the tax system, has expressed at least tentative support for a VAT.

...

Conservatives have long argued that a consumption tax would provide a simpler and more efficient alternative to the byzantine U.S. income tax code.

...

The VAT [is] one of the world's most popular taxes, in use in more than 130 countries. Among industrialized nations, rates range from 5 percent in Japan to 25 percent in Hungary and in parts of Scandinavia. A 21 percent VAT has permitted Ireland to attract investment by lowering its corporate tax rate.

The VAT has advantages: Because producers, wholesalers and retailers are each required to record their transactions and pay a portion of the VAT, the tax is hard to dodge. It punishes spending rather than savings, which the administration hopes to encourage.

...

What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, "100 Million Unnecessary Returns," Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 -- about 90 percent of households -- from the income tax and would lower rates for everyone else.

And in a paper published last month in the Virginia Tax Review, Burman suggests that a 25 percent VAT could do it all: Pay for health-care reform, balance the federal budget and exempt millions of families from the income tax while slashing the top rate to 25 percent. A gallon of milk would jump from $3.69 to $4.61, and a $5,000 bathroom renovation would suddenly cost $6,250, but the nation's debt would stabilize and everybody could see a doctor.

http://www.washingtonpost.com/wp-dyn/conte...2602909_pf.html

[spookyturtle 9,466]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

[w¡n9Nµ7 §£@¥€r 123]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

[spookyturtle 9,466]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

And that is Obama's fault too. Just ask VW.

[w¡n9Nµ7 §£@¥€r 123]

VW won't be logging on till later. Let's wait till then to make every thread about her.

[Chica Yeyé 41]

[My Name Is Nobody 3]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

Yes, Under the assumption all other taxes would be eliminated.

Edited May 27, 2009 by cyclops10

[I AM NOT THAT GUY 5,715]

Perhaps we could just go back to the original Constitution, and let the Feds go begging to the states for money, instead of the other way around.

...direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers...

Personally, being a retailer, I like sales taxes. I get free use of the tax money for 90 days. The down side is, if I don't collect the tax, I still have to pay it.

[w¡n9Nµ7 §£@¥€r 123]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

Yes, Under the assumtion all other taxes would be eliminated.

Yes, because the poor are precisely the people you want to burden the most.

[My Name Is Nobody 3]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

Yes, Under the assumtion all other taxes would be eliminated.

Yes, because the poor are precisely the people you want to burden the most.

They would pay very little in taxes since they have little money to buy products to consume. All they need to buy is food which is not taxed.

[JimVaPhuong 4,863]

If a VAT replaced the federal income tax, and all of the deductions and credits that go along with it, how many people would lose their homes because they lost the mortgage interest deduction?

[Mr. Big Dog 10,747]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

Yes, Under the assumtion all other taxes would be eliminated.

Yes, because the poor are precisely the people you want to burden the most.

They would pay very little in taxes since they have little money to buy products to consume. All they need to buy is food which is not taxed.

Instead of rolling on the floor, perhaps you should work on improving your reading comprehension.

To quote from the original article.

A gallon of milk would jump from $3.69 to $4.61...

Or are you suggesting that milk is somehow not food?

[Peikko 1,575]

In most countries that implement VAT, food is 0 rated not exempt. Effectively for the consumer that means no sales tax on food. Of course, there is a question of what is and isn't food. Clearly, milk is but the potatoe chip isn't . Why would the US want to put VAT on food? States do not.

[GaryC 7]

If a VAT replaced the federal income tax, and all of the deductions and credits that go along with it, how many people would lose their homes because they lost the mortgage interest deduction?

Without a federal income tax there isn't any need for deductions. You wouldn't pay tax on the interest to begin with. It's the whole point of the VAT.

[My Name Is Nobody 3]

Except if it was done here it would just go on top of our current taxes, not eliminate them. You know those damn Dimocrats, they have to pay for all that spending somehow.

Conservatives are the ones who have wanted a consumption tax.

Yes, Under the assumtion all other taxes would be eliminated.

Yes, because the poor are precisely the people you want to burden the most.

They would pay very little in taxes since they have little money to buy products to consume. All they need to buy is food which is not taxed.

Instead of rolling on the floor, perhaps you should work on improving your reading comprehension.

To quote from the original article.

A gallon of milk would jump from $3.69 to $4.61...

Or are you suggesting that milk is somehow not food?

No, I said a consumer and or flat type tax would be supported if they eliminated all other taxes. The $3.69 to $4.61 is a tax on top of other taxes.

I would say get ready because this is where things are going to help pay for all the entitlements coming down the pike. The poor will be hit even harder.

Edited May 27, 2009 by cyclops10