Comments on: Dems at Odds on Paying for Obamacare

By: sinz54

sinz54 — Thu, 18 Jun 2009 10:38:33 +0000

The bigger problem with a lot of these measures, like the VAT, is that they will end up taxing middle-income and even working-class people. That violates Obama's campaign pledge not to raise taxes on those making less than $200,000 a year.

If Obama is forced to raise taxes on auto workers AFTER their employers have already gone bankrupt and forced them into givebacks, he's in deep doo-doo.

By: sinz54

sinz54 — Thu, 18 Jun 2009 10:36:37 +0000

ottovbvs: The congressional proponents of VAT have come up with a solution to regressivity.

What they would do is ask you to report your income for the year (as you already do on your Form 1040), and then report your purchases of consumer goods for the year (which in these days of computerized online bills is easy to do). The difference between what you earn and what you spend would go into a formula which would provide a multiplicative factor for the VAT on your purchases. The more income that's not spent on purchases, the higher the multiplicative factor. That makes the VAT progressive.

By: ottovbvs

ottovbvs — Thu, 18 Jun 2009 10:08:48 +0000

midcon
4:51 AMA VAT is the most democratic of all taxes in that it taxes consumption.

........Actually it isn't because it's massively regressive. The guy earning $50k a year pays the same for a pair of shoes as the guy earing $150k a year. The likelihood of them introducing VAT to pay for healthare reform is zero. All that said if you want a purchase tax VAT is a sensible way to go about it and produces masses of revenue. It's not going to happen because firstly Americans are relatively lightly taxed at the income level and tweaking marginal rates would be much easier than trying to reengineer the entire tax system as would be required if VAT were introduced. It is an enormously complex system.

By: midcon

midcon — Thu, 18 Jun 2009 08:51:23 +0000

A VAT is the most democratic of all taxes in that it taxes consumption. What you pay depends on what you spend. What could be more liberating than that? If Obama wants to cut my income tax and instead impose a tax on what I choose to spend, that's just fine by me. There are many things I can do without.

If you are suggesting that lower income Americans buy more than upper income folks, I would like to see the source of the data.

If I don't want to pay the tax, I simply do not purchase that 60 inch plasma tv. Now if they want to tax long walks in the park or reading books at the library, well ok, let's talk about a revolt.

By: John

John — Wed, 17 Jun 2009 22:27:37 +0000

It is hard to imagine something hitting lower-income Americans harder than a Value Added Tax. Even if one were to exempt food, it’s nothin less than a massive, regressive tax increase. Can’t imagine it would be too popular in Chairman Rangel’s district.

By: ottovbvs

ottovbvs — Wed, 17 Jun 2009 19:34:20 +0000

It’s only in doubt in your mind.