Friday, April 30, 2010

David Ignatius Thinks You're Not Taxed Nearly Enough

...And he's got the fix; a magic fix that will repair the economy, erase the Federal deficit, unsour the milk and cure yaws: a nice fat Value-Added Tax.

Sure looks to me like it subtracts value, which is the usual way of such names.

Srsly, who's giving these fools typewriters? And how come none of them remember what it is like to live from paycheck to paycheck?

13 comments:

Jim said...

There's a lot to be said about a VAT, mostly "No," but to get a real feeling for its impact there's no substitute for a few days in Europe. It came home to me one evening in Galway when I stepped into a shop to buy a Bic lighter and stepped out about $4 poorer.

Turk Turon said...

I wouldn't mind a national sales tax if the 16th Amendment were repealed and replaced with an amendment banning income taxes. Bearing in mind that 50% of Americans pay no federal income tax at all, a sales tax would "bring them back into the fold" with all of us other tax-paying, and tax-hating, citizens. Folks who work in the so-called "cash economy" would no longer escape, either. It would make more anti-tax voters. No annual returns to fill out.

But a VAT? No! Or sales tax on top of income tax? No!

D.W. Drang said...

Turk: We can haz XVII Repeal, too?

wv: dration. If you didn't like C's...

Nathan said...

Amendment

Section 1. The sixteenth article of amendment to the Constitution of the United States is hereby repealed.

Section 2. Congress shall make no law regarding the imposition of any direct or indirect tax or levy upon the personal or business income of any citizen or legal resident of the United States.

Section 3. All previous Federal law imposing taxes or levies such as described in Section 2 is hereby declared null and void.

Have away!

Tam said...

Turk,

As unlikely economist Frank Zappa pointed out, replacing the National Income Tax with a National Sales Tax would make such disparate groups as churches, drug dealers, and defense contractors into stars of the federal tax base. What's not to like about that? (Assuming we take a need for federal taxes as arguendo.)

John A said...

Ignatius implies a VAT would have prevented Greece from its current problems? Uh, search "GREECE+VAT" shows Greece has a VAT. As of 2005 at 19 percent.

And we already have the equivalent [no, not income tax, goods taxes], which of course would not be done away with. Now, my State has a sales tax - but it does not apply to food. But of the dollar-and-a-half a loaf of bread costs at the supermarket, about a dollar-thirty or more is taxes, fees, etc. that applied every time the ingredients changed hands or form.

Borepatch said...

So now we see that "Progressives", having grown Leviathan beyond the bounds of what can be supported by a "progressive" tax structure, now propose a regressive tax structure.

But I'm sure there are wicked smart justifications why this won't sock the poor, like gas taxes, tobacco taxes, alcohol taxes, and Social Security taxes currently do.

Oh, wait ...

Brigid said...

I have limited space, but I'm stocking up even more now.

If they add this on to all the other taxes, even the poor are going to feel the pinch.

The Jack said...

Little faith.

A regressive poor-hurting tax plain just fine with the Progs.

It shows the dire, dire need of massive subsidies to help the poor.

You see there's no problem caused by big gov that can't be solved by bigger gov.

It's like watching them release wolves to kill the cats they released to kill the rats they released to eat the snails.

They'll make us all beggers, because beggers are easier to please.

Sarah said...

What if the fed.gov just...stopped taking on extra-Constitutional activities and authority? Gosh, wouldn't they need a LOT fewer dollars if that happened?

Blackwing1 said...

- "What's yaws?"

- "Thanks, I'll have a beer."

(Hey, nobody else bit on it)

perlhaqr said...

Sarah: A lovely fantasy picture you paint there. I'd love to live in it, but my hopes aren't high.

TJP said...

My guess is that this guy never took on an accounting task more complicated than installing a piece of software to balance his checkbook. That's okay, since the problem can be simplified so even a D. Ignoramus can understand.

Even if we set aside for a moment the implications of adding more burden to the already tremendously complex task of business accounting, there is a limit to what the tax pigs can consume. When taxes exceed a certain point, I have to eliminate expenses:

1. If I stop buying clothes or eating, I'm dead and therefore no longer a taxpayer.

2. If I ditch my car, then I need a job within walking distance. Since I won't be able to travel or haul things, this will undoubtedly be a lower-paying job.

3. Either from the income loss above, or alternatively ditching the house, my tax contribution will be significantly lower because I'm either paying less income tax, or less property tax--likely both.

4. Doing either of the above will make me a high-risk borrower, which means I'm going to be stuck in the situation for a decade or more (provided that businesses are still offering work), and no sanely-managed bank will ever make a loan to me, except in small amounts, with high interest rates and with collateral.

5. Since my credit and mobility will be severely limited, my paltry disposable income will only help small, local businesses.

6. Since I won't be alone in this predicament, thousands of other businesses will suddenly lose sales, pay less in taxes, and fire people. There will be a chain reaction of financial failure across the country.

7. This has already happened to minority of the population, some of whom were deadbeats anyway, and this small blip has thrown every level of government into budget deficit. I'll type this slowly for the D. Ignoramuses of the nation: this means less tax is actually being collected.

We're past of the point of diminishing returns. Right now we're being taxed to pay for the tax owed on property backed by credit accounts which no one will service. The "solution" is therefore to collect tax, to pay the tax that is being collected to pay the tax that is owed on property backed by credit accounts which no one will service. Adding more either does nothing, or has a negative effect. "I keep cutting this board, but it's not getting any longer."