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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Soul Crusher on April 07, 2010, 05:06:49 AM
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Updated: Wed., Apr. 7, 2010, 4:36 AM
Bam man pitching national sales tax
By GEOFF EARLE in Washington and TONY DAVENPORT in NY
www.nypost.com
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Acknowledging it would be a highly unpopular move, White House economic adviser Paul Volcker said yesterday the United States should consider imposing a "value added tax" similar to those charged in Europe to help get the deficit under control.
A VAT is a national sales tax that, like state and city sales taxes, would be collected by retailers.
Volcker, at the New-York Historical Society, told a panel on the global financial crisis that Congress might also have to consider new taxes on carbon and energy.
The VAT suggestion was immediately met with outrage by Republicans.
"It shouldn't surprise anyone that the Obama White House would advocate a European-style tax to help finance their European-style government health-care plan," said Brian Walsh, a spokesman for the National Republican Senatorial Campaign Committee.
"When you hear things like this, though, it's almost as if the Democrats think the American people will forget that we're in this situation because of their reckless spending agenda."
Volcker, a former chairman of the Federal Reserve, told the global economic panel that a VAT is "not as toxic an idea as it has been in the past."
He added, "If, at the end of the day, we need to raise taxes, we should raise taxes."
The tax has long had backing from House Speaker Nancy Pelosi (D-Calif.), who last year said it is "on the table" for dealing with the country's fiscal woes.
Some say the tax can be a good way to raise money because -- depending on how it's imposed -- the burden does not have to fall on the consumer alone.
A VAT can also be imposed down the line on manufacturers, producers and any other business that adds value -- as well as retailers.
Presumably, each could be asked to pay a smaller amount, since the burden would be spread out.
Also, since the government would be collecting at each step of the manufacturing process, if a retailer cheated, the taxman wouldn't be left completely in the cold, because levies would have been collected at earlier steps leading up to the sale.
A major reason the tax is so hated is that it does not eliminate sales taxes, but is charged on top of them.
It's a quick way for governments to raise cash, but the tax could wind up being a burden on the poor, critics say.
The VAT idea has percolated in Washington over the years, but lawmakers have always resisted it.
The US budget deficit is expected to reach $1.5 trillion in fiscal 2010. With Reuters
geoff.earle@nypost.com
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I hope you idiots who voted for this communist admn are the first to lose your jobs and become beggers in the street for what you have unleashed on us.
John McCain: "We have nothing to fear from an Obama Admn"
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I like how there is ZERO mention of cutting the obscene amount of govt. spending.
No, just tax hikes!
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Remember that bogus lie that the idiots like Straw, Benny, Blacken et al ate up like cake?
SUCKERS! ! ! ! ! ! ! ! !
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'I like how there is ZERO mention of cutting the obscene amount of govt. spending.'
I agree. however, cutting spending means cutting jobs. Politically, the repubs would have a field day gloating that 'obama just put 50,000 people out of work by slashing this program!" instead of saying "about time he cuts some spending.
that's why neither party will actually cut spending - both dems and repubs are big spenders.
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'I like how there is ZERO mention of cutting the obscene amount of govt. spending.'
I agree. however, cutting spending means cutting jobs. Politically, the repubs would have a field day gloating that 'obama just put 50,000 people out of work by slashing this program!" instead of saying "about time he cuts some spending.
that's why neither party will actually cut spending - both dems and repubs are big spenders.
No, most republicans want govt cut to the bone. Only the liberal cradle to gravers want more govt jobs.
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I am more pissed off at our fellow citizens who are so ignorant, naive, and dumb to not have thought this was coming as Kraut said as Obama's spending binge could and will never be paid for.
Sure I cant stand Obama and he is a communist pofs asswipe. But I blame those who voted for him, support him, and kneepad for him, since we were all warned many many times prior to the election that this was going to happen.
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Mark Steyn: U.S. business could be cooked in a VATBy MARK STEYN
2010-03-26 10:29:34
May I be boring? Or, if you're a regular reader, more boring than usual?
Bear with me. There's some eye-glazing numbers and whatnot.
In 2003, Washington blessed a grateful citizenry with the Medicare prescription drug benefit, it being generally agreed by all the experts that it was unfair to force seniors to choose between their monthly trip to Rite-Aid and Tony Danza in dinner theater. However, in order to discourage American businesses from immediately dumping all their drug plans for retirees, Congress gave them a modest tax break equivalent to 28 percent of the cost of the plan.
Fast forward to the dawn of the Obamacare utopia. In one of a bazillion little clauses in a 2,000-page bill your legislators didn't bother reading (because, as Congressman Conyers explained, he wouldn't understand it even if he did), Congress voted to subject the 28 percent tax benefit to the regular good ol' American-as-apple-pie corporate tax rate of 35 percent. For the purposes of comparison, Sweden's corporate tax rate is 26.3 percent, and Ireland's is 12.5 percent. But just because America already has the highest corporate tax in the OECD is no reason why we can't keep going until it's double Sweden's and quadruple Ireland's. I refer you to the decision last year by the doughnut chain Tim Hortons, a Delaware corporation, to reorganize itself as a Canadian corporation "in order to take advantage of Canadian tax rates." Hold that thought: "In order to take advantage of Canadian tax rates" – a phrase hitherto unknown to American English outside the most fantastical futuristic science fiction.
Ask yourself this: If you impose a sudden 35 percent tax on something, are you likely to get as much of it? Go on, take a wild guess. On the day President Barack Obama signed Obamacare into law, Verizon sent an e-mail to all its employees, warning that the company's costs "will increase in the short term." And in the medium term? Well, U.S. corporations that are able to do so will get out of their prescription drugs plans and toss their retirees onto the Medicare pile. So far just three companies – Deere, Caterpillar and Valero Energy – have calculated that the loss of the deduction will add a combined $265 million to their costs. There are an additional 3,500 businesses presently claiming the break. The cost to taxpayers of that 28 percent benefit is about $665 per person. The cost to taxpayers of equivalent Medicare coverage is about $1,200 per person.
So we're roughly doubling the cost of covering an estimated 5 million retirees.
Now admittedly the above scenario has not been, as they say, officially "scored" by the Congressional Budget Office, by comparison with whom Little Orphan Annie singing "The Sun'll Come Out Tomorrow" sounds like Morrisey covering "Gloomy Sunday." Incidentally, has the CBO ever run the numbers for projected savings if the entire CBO were laid off and replaced by a children's magician with an assistant in spangled tights from whose cleavage he plucked entirely random numbers? Just a thought.
This single component of "health" "care" "reform" neatly encompasses all the broader trends about where we're headed – not just in terms of increased costs (both to businesses and individual taxpayers) and worse care (for those retirees bounced from company plans into Medicare), but also in the remorseless governmentalization of American life and the disincentivization of the private sector. As we see, even the very modest attempts made by Congress to constrain the 2003 prescription drug plan prove unable to prevent its expansion and metastasization. The one thing that can be said for certain is that, whatever claims are made for Obamacare, it will lead to more people depending on government for their health arrangements. Those 5 million retirees are only the advance guard. And, if you're one of those optimistic souls whose confidence in the CBO is unbounded, let's meet up in three years' time and see who was correct – the bureaucrats passing out the federal happy juice, or the real businesses already making real business decisions about Obamacare.
Can we afford this? No. Even on the official numbers, we're projected to add to the existing $8 trillion in debt another $12 trillion over the next decade. What could we do? Tax those big bad corporations a bit more? Medtronic has just announced that the new Obamacare taxes on its products could force it to lay off 1,000 workers. What do those guys do? Well, they develop products such as the recently approved pacemaker that's safe for MRI scans or the InterStim bladder control device. So that's a thousand fewer people who'll be working on new stuff. Well, so what? The public won't miss what they never knew they had. So, again, the effect is one of disincentivization – in this case, of innovation.
If existing tax structures can't cover the costs, what can we do? Start a new tax! The VATman cometh. VAT is Euro-speak for "value added tax."
Americans often carelessly assume it's merely a sales tax, but, in fact, it's far more cumbersome than that, being levied at each stagethat "value" is added to a product or service. The consumer can't claim back the VAT, but intermediate businesses in the production chain can. So self-employed individuals with relatively modest income wind up both charging VAT to their clients (25 percent in Scandinavia) and then claiming back the VAT they spent on the stamp and stationery they used to mail out the invoice. This is yet another imposition on businesses, taking time away from wealth creation and reallocating it to government paperwork. If the Democrats hold Congress this fall, I would figure on VAT sooner rather than later.
All of the above is pretty much a safe bet. What about the imponderables? Even Obama hasn't yet asked the CBO to cost out, say, what happens to the price of oil when the Straits of Hormuz are under a de facto Iranian nuclear umbrella – as they will be soon, because the former global hyperpower, which now gets mad over a few hundred housing units in Jerusalem, is blasé and insouciant about the wilder shores of the mullahs' dreams. Or suppose, as seems to be happening, the Sino-Iranian alliance were to result in a reorientation of global oil relationships, or the Russo-Iranian friendship bloomed to such a degree that, between Moscow's control of Europe's gas supply and Tehran's new role as Middle Eastern superpower, the economy of the entire developed world becomes dependent on an alliance profoundly hostile to it.
Which is to say that right now the future lies somewhere between the certainty of decline and the probability of catastrophe. What can stop it? Not a lot. But now that your "pro-life" Democratic congressman has sold out, you might want to quit calling Washington and try your state capital. If the Commerce Clause can legitimize the "individual mandate," then there is no republic, not in any meaningful sense. If you don't like the sound of that, maybe it's time for a constitutional convention.
©MARK STEYN
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'No, most republicans want govt cut to the bone. Only the liberal cradle to gravers want more govt jobs'
I dunno... Any republican working a state or federal job isn't gonna want ot join the unemployment line, to help the budget.
And since repubs work and libs stay home all day, it's safe to say slashing a ton of fedeal spending - and federal jobs - will put a lot of repubs out of work.
Elections are close. ANY sector laid off because of the slashing by a president will defintely vote for the other guy (who will of course promise a job to him).
It's why nobody slashes spending, and nobody will. Sorry. Romney, pawlenty, whoever. They might stop NEW projects, but they ain't cutting pork. Just won't happen.