"No new taxes" for GOP -- except a national sales tax

[one...two...tree 2,762]

Republicans swear they won't raise taxes -- but Rand Paul and Paul Ryan want to tax everything you buy

By Joe Conason

Can you guess which tax is bad, bad, bad when suggested by Democrats but perfectly acceptable when proposed by Republicans? Listening to Rand Paul and Paul Ryan, among others, the answer is a national sales tax or value-added tax, known in Europe as a VAT. While Republicans argue ferociously to preserve the Bush tax cuts for America's wealthiest families, the notion of a new federal tax on goods and services - which would disproportionately penalize working consumers -- is becoming fashionable among their party's most prominent figures.

The Kentucky Republican Senate candidate made headlines yesterday when he proposed a national sales tax to replace the income tax, but Paul is scarcely alone in preferring a tax that falls most heavily on the middle class, workers and the poor. Rep. Ryan's budget "roadmap," released earlier this year to much fanfare in the conservative and mainstream media, relies on an 8.5 percent "business consumption" tax -- yet another name for what Europeans call a VAT. From Arizona to Maine, Republican candidates seem increasingly eager to impose a national sales tax -- and although they usually say this new tax would "replace" the income tax and abolish the IRS, such fantasies aren't contemplated by Ryan, the ranking Republican on the House Budget Committee.

Regressive taxation is a perennial enthusiasm among conservatives. But whatever happened to "no new taxes" and the Taxpayer Protection Pledge popularized by Grover Norquist? Ryan and Paul are both among the signatories of the Norquist pledge, a document that forbids any "changes in tax deductions or credits that increase the tax burden on Americans," as a national sales tax or VAT would inevitably do -- especially if it doesn't replace income and wage taxes. Evidently the Wisconsin Republican believed he could get away with sneaking a VAT into his budget plan (which is one of several reasons that the Ryan roadmap would increase the tax burden on most American families while lavishing new tax breaks on the wealthiest few).

This right-wing sales-tax vogue represents not only a departure from conservative orthodox but an embarrassing plunge into political hypocrisy. Soon after health care reform passed last spring, dire predictions of an "Obama sales tax" to pay for the program blared from the likes of the Republican National Committee, RedState, and Norquist himself, who warned that any promises to replace the income tax should be considered worthless. The anti-tax crusader remarked disdainfully last summer that "VAT is French for big government," while RNC chairman Michael Steele denounced the idea as an example of the despised "European-style" policies favored by the president. (Of course, many conservatives simply adore European ideology as long as the authors are Austrian and ultra-right, but that's another flavor of hypocrisy.)

Yet now at least some Republicans are promoting the same tax proposal they warned us against six months ago. So perhaps the section of the midterm Pledge to America that vows to "permanently stop all job-killing tax hikes" should carry an asterisk, at least for Paul, Ryan and all the other advocates of a sales levy (which would surely reduce employment in the retail sector). And perhaps that foreign stigma could be removed by renaming the VAT. From now on, let's just call it "the Ryan tax."

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Edited October 13, 2010 by El Buscador

[Obama 2012 1,714]

*gasp* a tax that everyone pays. Oh no. We can't have that.

Hey stupid. If you eliminate the income tax and add a sales tax instead, then badda bing, badda boom! everyone pays! like it should be!

[Azzudiin 26]

The problem is they will pass this tax saying it will eliminate income tax, but then turn around and not eliminate income tax. Then everyone is screwed.

[Peikko 1,575]

Yeah, I'm so gullible I really believe the GOP have plans to eliminate income tax

[Danno 1,228]

The problem is they will pass this tax saying it will eliminate income tax, but then turn around and not eliminate income tax. Then everyone is screwed.

Thats the exact reason I am against the Flat-tax.

There would have to be a Constitutional amendment preventing it..... or else the next time things swing Left, the existing tax structure would start coming right back.... on top the the VAT tax, Flat tax or Sales tax model.

[^_^ 5,021]

Yeah, I'm so gullible I really believe the GOP have plans to eliminate income tax

I don't think that is being argued here at all. There are broad ideas that have high levels of popularity among the base of the Democratic and Republican parties. For Democrats, a good example is universal healthcare. For Republicans, eliminating the income tax and substituting it with a national sales tax of some kind has long been an idea that has excited their base. Of course, those are just ideas, intended to give the independent voter a glimpse into where the party's "heart" is. It is well understood by all but but the most uninformed that once in a position of being able to pass legislation, there are any number of hurdles that have to be passed through. These range from the practicalities of having enough votes - no party is a monolith and each member is (this is a good thing) answerable to his or her own constituents to procedural hurdles posed by parliamentary procedure. You take a broad idea (say, healthcare for all) and put it through this process and what comes out is often quite different from what was initially proposed. This is, of course, due to the fact that what passes must be law and not just an idea and must therefore by much more detailed. The contradictions inherent in many ideas have to be resolved in legislation. So yes, the GOP base would love to see no income tax and a sales tax instead. But what if a Republican House and Senate and a Republican President (it will happen eventually) decide they wish to actually move on this? What will come of it will be very different and Azzuddin may very well be correct. We may very well end up with the current income tax in addition to a new national sales tax.

[mawilson 2,133]

Yeah, I'm so gullible I really believe the GOP have plans to eliminate income tax

They may have plans, but unfortunately it's not gonna happen.

[^_^ 5,021]

They may have plans, but unfortunately it's not gonna happen.

If they are ever in position to try, it will look nothing like that plan when it emerges as a final product. The legislative sausage machine at work.

[Heracles 417]

The fair tax alone is simply not feasible nor practical. Hence, pretty-much no one else is using it. Surely countries that are renowned for tax and modern tax structures would have implemented it by now.

I'll purchase everything from overseas, so the tax will be avoided. I'll grow everything at home etc etc etc.

Now what does work, is income tax combined with a federal [GST/VAT].

[Jenn! 918]

The elimination of income tax in favor of sales tax, i.e. the fair tax, includes a prebate that reimburses everyone for taxes paid on necessary goods at poverty-level consumption. Effectively, anyone earning below the poverty-level would pay negative taxes, and no taxes at the poverty level. Of course, that is, unless they purchase non-essential goods, which is how it should be IMO. This makes the fair tax non-regressive.

[^_^ 5,021]

The fair tax alone is simply not feasible nor practical. Hence, pretty-much no one else is using it. Surely countries that are renowned for tax and modern tax structures would have implemented it by now.

I'll purchase everything from overseas, so the tax will be avoided. I'll grow everything at home etc etc etc.

Now what does work, is income tax combined with a federal [GST/VAT].

Well, that depends on what kind of government you want. If you want the conservative vision of government then you don't need much tax revenue because government wouldn't do much. Government would basically be in a role somewhat analogous to that of a modern corporate IT department - all services are provided by external vendors and all you need to do is manage the relationships and projects. They may not realize it, but they really want to transform Federal Government into a project management CoE.

The elimination of income tax in favor of sales tax, i.e. the fair tax, includes a prebate that reimburses everyone for taxes paid on necessary goods at poverty-level consumption. Effectively, anyone earning below the poverty-level would pay negative taxes, and no taxes at the poverty level. Of course, that is, unless they purchase non-essential goods, which is how it should be IMO. This makes the fair tax non-regressive.

Is that how it will end up after going through the legislative process? I doubt it. Note the glee on the right at the idea of "everyone paying taxes". This will never work without enough conservative support, because it is after all, their idea.

[Heracles 417]

The fair tax does not explain what happens when people slow spending or stop spending, like during a recession. You would have to close down the government, as there would be not enough revenue available to pay for these services. Income on the other hand, even during a recession, there are people earning money.

Calling it a fair tax is also disingenuous, as it's just a label designed to fool someone into think it's somehow fair.

[^_^ 5,021]

The fair tax does not explain what happens when people slow spending or stop spending, like during a recession. You would have to close down the government, as there would be not enough revenue available to pay for these services. Income on the other hand, even during a recession, there are people earning money.

Calling it a fair tax is also disingenuous, as it's just a label designed to fool someone into think it's somehow fair.

Income tax revenue goes down during recession because wages flatline or go down and people lose jobs.

Sales tax revenue would go down during a recession too because people would spend less as a result of their wages flatlining or going down and people losing their jobs.

But people will still spend. Of course, if we exempt essentials then sales tax revenue may plummet a lot more than income tax revenue does during a recession.

[Hilarious Clinton 452]

*gasp* a tax that everyone pays. Oh no. We can't have that.

Hey stupid. If you eliminate the income tax and add a sales tax instead, then badda bing, badda boom! everyone pays! like it should be!

So simple. But the libs want both.

Edited October 13, 2010 by John Galt

[Heracles 417]

Well, that depends on what kind of government you want. If you want the conservative vision of government then you don't need much tax revenue because government wouldn't do much.

I agree with the Repubs with quite a few things, just not fiscal policies. Actually where my opinion turned is when I realized the same people who have been preaching fiscal responsibility, did not bother funding two wars. Not to mention, the $1 trillion wasted annually on BS masqueraded as protecting America.

Government would basically be in a role somewhat analogous to that of a modern corporate IT department - all services are provided by external vendors and all you need to do is manage the relationships and projects. They may not realize it, but they really want to transform Federal Government into a project management CoE.

And that is exactly how the government is run in so many countries Repubs consider socialist. There are actually more services that are private operated in AUS, than there are in most states here. The problem with so many Repubs here is that they are small blue-collar businesses or simply naive. So while they cling on to cliches and bandwagon ideologies, like libs do with rights rubbish, they don't have any real world ideas in implementing them.

I actually believe the government should function like a business, with the goal of maximizing its return and stock price for its shareholders - the American people. They generate revenue, by means of taxation and other investments. They then re-invest these dividends back into their business [local, state or Federal], in order to grow the business. These new investments generate more revenue and the cycle goes on and on; with the end result being higher prosperity for all Americans.

Edited October 13, 2010 by Heracles