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

[FreakinDJ]

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

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).

A VAT could be a useful part of a larger reform. For example, in his book, 100 Million Unnecessary Returns, Columbia law professor Michael Graetz proposes a 10 to 14 percent value-added tax, but earners making less than $100,000 would pay no income tax at all, and other income and corporate taxes would be reduced. That's just one idea. Press the buttons of almost any tax wonk in Washington and a different plan spits out; a VAT is part of most of them.

http://www.cbsnews.com/8301-503983_162-20001918-503983.html

The current state of the Economy makes 1 thing perfectly clear - "The US can not continue to reward Corporations with lucrative Tax Breaks for outsourcing American Jobs". Taxing Off Shore Corporate profits has increased the incentives to move jobs and production away from America. While a "Territorial Corp VAT would level the playing fields between US based Corporations and MultiNational Corps operating off shore. It would equally close the gap between American and Foreign Labor cost

[Marnie]

1. Any tax on purchssed goods is regressive.

So by all means let's come up with another word for taxing the lower middle class and poor the highest percentage of their income and letting the wealthiest off easy.

[FreakinDJ]

2. Tax loopholes the encourage Outsoursing Jobs is equally regressive

and that is what has driven jobs out of this country

Some economist believe the only way to stem the flow of jobs and manufactures OUT of the country is implement a Corp VAT equally applied to Foreign and Domestic companies

http://www.conservativemonitor.com/finance03/49.shtml

[Peter1x9]

3. VAT is just more of shifting the tax burden on the poor

We really need to gut all the friggin loopholes in the system, eliminate the payroll tax, and raise taxes on the super rich. Everything else is just more of the same. Our current tax system is good at two things: hindering small business and shifting the burden away from the wealthy.

[Warpy]

4. My income taxes are chump change compared to what his VAT

would cost me and that VAT is paid up front. His percentages are ridiculously high, also. Usually the VAT is assessed at each step of a manufacturing process and tracks the value added from mining to finished object on a shelf. It's low for agricultural produce and high for complex things like cars (and Lear jets).

The only way I'd accept one is if it were excluded from the general fund by constitutional amendment, to be applied to a universal health insurance program.

Don't kid yourself, this is a heavy, regressive tax aimed exclusively at people who must spend their entire incomes to live.

[Art_from_Ark]

6. You are right

VAT is a heavily regressive tax which imposes the biggest burden on those who have the least to spend.

[FreakinDJ]

7. A Territorial Corporate VAT system to replace Corp Income Tax

Leave the Individual Income Tax system alone.

A Corporate VAT that would address Foreign Corporations selling products or operating on US territory. Do away with "Foreign Profits Tax" but capture taxes on Foreign Corporations importing to America

[golfguru]

5. VAT tax is a given because the government

needs the money. The rich refuse to pay more so they
will install a regressive tax.