Volcker Calls for National VAT

[KD in CA]

Good thing the public is preoccupied with their outrage over an airline charing $40 for a carry-on bag.

 

[DC Tom]

Good thing the public is preoccupied with their outrage over an airline charing $40 for a carry-on bag.

 

 

On the bright side, we no longer have any sort of manufacturing industry to kill with this idea. My biggest complaint about a VAT is that Congress would create it in addition to income tax, rather than implement it instead of.

 

What would a VAT ultimately do to the dollar's value?

[meazza]

On the bright side, we no longer have any sort of manufacturing industry to kill with this idea. My biggest complaint about a VAT is that Congress would create it in addition to income tax, rather than implement it instead of.

 

What would a VAT ultimately do to the dollar's value?

 

Assuming less consumption, USD will be less in demand.

[/dev/null]

Assuming less consumption, USD will be less in demand.

Less consumption = More tax incentives and subsidies to encourage consumption (Homebuyers Credit, Cash For Clunkers, Cash For Caulkers, etc)

[DC Tom]

Assuming less consumption, USD will be less in demand.

 

I'd figured...but then I'd thought that greater tax revenue = less debt = greater value for the USD.

 

Of course, it's not like the government would reduce the debt anyway...they'd just invent new "if we don't do this, we're all gonna die" programs to spend it on.

[Chef Jim]

I'd figured...but then I'd thought that greater tax revenue = less debt = greater value for the USD.

 

Of course, it's not like the government would reduce the debt anyway...they'd just invent new "if we don't do this, we're all gonna die" programs to spend it on.

 

 

Holy !@#$ing **** Tom, did you think before you wrote that?

[meazza]

I'd figured...but then I'd thought that greater tax revenue = less debt = greater value for the USD.

 

Of course, it's not like the government would reduce the debt anyway...they'd just invent new "if we don't do this, we're all gonna die" programs to spend it on.

 

Would depend on the increase in tax revenues from low elasticity goods compared to decreased consumption and tax revenues from high elasticity goods.

 

But most likely, yes it would reduce the debt.

[Chef Jim]

It's on like Donkey Kong.

 

10-20 percent??!!

 

So you buy a $40k car in CA you'll be paying nearly $10 in taxes?

[DC Tom]

 

Holy !@#$ing **** Tom, did you think before you wrote that?

 

Less FEDERAL debt. Of course, the rest of us will still be in hock up to our eyeballs, paying for health care with a 20% VAT tacked on to it.

 

And of course...no matter how much money the government brings in, Congress will still spend more than that. Hell, given the way procurement works, the government would end up taxing its own purchases, thereby driving up their expenditures 10-20%.

[keepthefaith]

Less FEDERAL debt. Of course, the rest of us will still be in hock up to our eyeballs, paying for health care with a 20% VAT tacked on to it.

 

And of course...no matter how much money the government brings in, Congress will still spend more than that. Hell, given the way procurement works, the government would end up taxing its own purchases, thereby driving up their expenditures 10-20%.

 

And they'll create 500,000 new Federal jobs for the purpose of collecting and policing the tax.

[meazza]

Less FEDERAL debt. Of course, the rest of us will still be in hock up to our eyeballs, paying for health care with a 20% VAT tacked on to it.

 

And of course...no matter how much money the government brings in, Congress will still spend more than that. Hell, given the way procurement works, the government would end up taxing its own purchases, thereby driving up their expenditures 10-20%.

 

I wonder if they even bother estimating the loss of tourism/foreign consumption, that would now have less incentive to travel and make purchases to the US.

[Magox]

What would a VAT ultimately do to the dollar's value?

That's hard to say. So many different variables, it is almost impossible to determine. If the VAT was implemented, and we miraculously began to cut spending in a meaningful way, then it would probably strengthen the dollar over the long haul. We'd most likely lose some jobs, slow growth but none the less, it would most likely help out with our deficits. However, considering that our elected leaders have no will or have shown the inability to be fiscally prudent with tax payer revenues, it would undoubtedly be more money for these bafoons to spend. It's not a coincidence that the states with the highest tax rates are the states that are in the worst fiscal shape, it just goes to show you that a lack of tax revenues aren't the problem but that spending binges from these states is what needs to be addressed. Look whats happening in Europe, they tax their society higher than we do, yet they are deeper in the red (Debt to GDP) than we are. Why? Because of the size of government and the entitlement mentality that they 've grown acustomed to.

[Nanker]

That's hard to say. So many different variables, it is almost impossible to determine. If the VAT was implemented, and we miraculously began to cut spending in a meaningful way, then it would probably strengthen the dollar over the long haul. We'd most likely lose some jobs, slow growth but none the less, it would most likely help out with our deficits. However, considering that our elected leaders have no will or have shown the inability to be fiscally prudent with tax payer revenues, it would undoubtedly be more money for these bafoons to spend. It's not a coincidence that the states with the highest tax rates are the states that are in the worst fiscal shape, it just goes to show you that a lack of tax revenues aren't the problem but that spending binges from these states is what needs to be addressed. Look whats happening in Europe, they tax their society higher than we do, yet they are deeper in the red (Debt to GDP) than we are. Why? Because of the size of government and the entitlement mentality that they 've grown acustomed to.

 

That's the stopper right there, isn't it.

[Booster4324]

That's hard to say. So many different variables, it is almost impossible to determine. If the VAT was implemented, and we miraculously began to cut spending in a meaningful way, then it would probably strengthen the dollar over the long haul. We'd most likely lose some jobs, slow growth but none the less, it would most likely help out with our deficits. However, considering that our elected leaders have no will or have shown the inability to be fiscally prudent with tax payer revenues, it would undoubtedly be more money for these bafoons to spend. It's not a coincidence that the states with the highest tax rates are the states that are in the worst fiscal shape, it just goes to show you that a lack of tax revenues aren't the problem but that spending binges from these states is what needs to be addressed. Look whats happening in Europe, they tax their society higher than we do, yet they are deeper in the red (Debt to GDP) than we are. Why? Because of the size of government and the entitlement mentality that they 've grown acustomed to.

 

Really? I knew Greece was, how many other countries are? Sincere question.

[Chef Jim]

Really? I knew Greece was, how many other countries are? Sincere question.

 

I know it's Wiki....

[Booster4324]

I know it's Wiki....

 

 

Hmm cool. Thanks, sorta embarrassing I didn't find that as I am usually somewhat of a wiki fan. The talk page indicates the article was off in the past, but no one is bitching now. It MIGHT be accurate. Some discrepancy between the estimates too.

[Booster4324]

Did a little reformat of the table with just CIA Factbook compared year to year. It is here http://en.wikipedia.org/wiki/User:Booster4324

 

Yeah it is a bump because IMO the figures are scary crazy. Like a 15% increase in overall public debt in a 1 year period.

[taterhill]

I guess it could be worse.....

 

During the Great Depression and World War II, the top income tax rate rose from pre-war levels. In 1939, the top rate was 75% applied to incomes above $5,000,000 ($75 million 2007 dollars). During 1944 and 1945, the top rate was its all-time high at 94% applied to income above $200,000.

[Booster4324]

I guess it could be worse.....

 

During the Great Depression and World War II, the top income tax rate rose from pre-war levels. In 1939, the top rate was 75% applied to incomes above $5,000,000 ($75 million 2007 dollars). During 1944 and 1945, the top rate was its all-time high at 94% applied to income above $200,000.

 

Just out of curiosity, did they actually have to pay that tax rate on their total income?

[Nanker]

Just out of curiosity, did they actually have to pay that tax rate on their total income?

Oh no. It was progressive. Each bracket of income was taxed at the appropriate rate. So, for the first $199,999 the rates in the brackets were lower. What's not apparent in those rates was the fact that so few people actually paid them. Every skievy tax dodge imaginable (remember Billy Sol Estes? - perhaps not, well look him up) was in vogue. Kennedy actually helped straighten out some of that mess by flattening the brackets, lowering the rates and eliminating many of the dodges (which got Mr. Estes and his pal Lyndon in hot water).