Obama XIII: It's all Bush's fault.

[Bill]

Re: Obama XIII: It's all Bush's fault.

Sounds like some people have a problem with people paying no taxes (unemployed, underemployed, seasonal workers, part-time, deductions etc..). the best way would be national sales tax or VAT, when everyone will be taxed, even the homeless.

A consumption/sales tax, or a flat tax, would be better than a VAT. It's too easy to hide all kinds of hidden taxes in a VAT.

 

[Tundra]

Re: Obama XIII: It's all Bush's fault.

A consumption/sales tax, or a flat tax, would be better than a VAT. It's too easy to hide all kinds of hidden taxes in a VAT.

Problem with flat tax is that some people will pay 0 taxes even without deductions and tax credits. so to make everyone pay and pay fair, it has to be a sales tax.

I think pack of cigarettes is $8.50 (40-70% is tax) and alcohol (8%? or maybe it was 10%). sure it'll hit the homeless drunks and other poor people, but they are already paying and adding national tax wont be a major burden.

Maybe start adding national sin tax (alcohol, tobacco, gambling (lotto, poker etc...) or push it up higher if we already collect them. And start adding to the list.

 

[ScottM]

Re: Obama XIII: It's all Bush's fault.

A consumption/sales tax, or a flat tax, would be better than a VAT. It's too easy to hide all kinds of hidden taxes in a VAT.

Really, how so? If every participant in a chain of goods or services has to pay a certain tax based on the value of what they contribute, how can the tax "hide"? Moreover, given the fact our economy is consumption based a VAT makes more long-term sense than shifting income taxes amongst an aging, shrinking workforce.

 

[Bakunin]

Re: Obama XIII: It's all Bush's fault.

I'm all in favor of a sales tax. Unfortunately, I doubt it'll show up to replace the income tax - it'll probably be something that is ADDED to the income tax.

 

[Tundra]

Re: Obama XIII: It's all Bush's fault.

I wonder if anyone proposed adding FFIT (federal flat[fair] income tax) and lowering the current progressive tax, instead of replacing the current system. It'll be easy to implement compared to national sale tax.

Add 10% flat tax. -10% progressive tax rate so 5 18 25 30 progressive. everyone will pay marginally more but everyone pays.

Add 5% national sales tax or VAT. -5% progressive tax so 13 20 25.
everyone will pay including illegals, tourist, unemployed etc...

 

[Bakunin]

Re: Obama XIII: It's all Bush's fault.

They'll try to add revenue, not simply go revenue neutral - which means you'd see current rates stay where they are (or increase), and have some tax slapped atop that.

 

[Bill]

Re: Obama XIII: It's all Bush's fault.

Really, how so? If every participant in a chain of goods or services has to pay a certain tax based on the value of what they contribute, how can the tax "hide"? Moreover, given the fact our economy is consumption based a VAT makes more long-term sense than shifting income taxes amongst an aging, shrinking workforce.

As the WSJ puts it:

"The allure of a VAT for politicians is that it applies to every level of production or service, rakes in piles of money, and is largely hidden from those who ultimately pay it—namely, consumers. "

 

[Patman]

Re: Obama XIII: It's all Bush's fault.

Really, how so? If every participant in a chain of goods or services has to pay a certain tax based on the value of what they contribute, how can the tax "hide"? Moreover, given the fact our economy is consumption based a VAT makes more long-term sense than shifting income taxes amongst an aging, shrinking workforce.

I think you'll see some horizontalization of companies. One way to avoid the VAT is to reduce the chain of buyers.

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pirate... how does vo-tech schools impact the number of PhDs? We have more than enough people out there wanting to do computer networking work... we don't import those... we import higher level coders for Microsoft... nothing that a votech realignment would fix. If I recall correctly the main body of coders are those with B.S. degrees... and you have to have a good handle of math to code effectively or at a level that would displace off-shoring. The advantage for these companies is that other nations are willing to accept a lower standard of living to do the same stuff we do here.

 

[unofan]

Re: Obama XIII: It's all Bush's fault.

Really, how so? If every participant in a chain of goods or services has to pay a certain tax based on the value of what they contribute, how can the tax "hide"? Moreover, given the fact our economy is consumption based a VAT makes more long-term sense than shifting income taxes amongst an aging, shrinking workforce.

The VAT is essentially a hidden sales tax, since it's built into the sticker price that the final consumer sees. If we're going to go that route (which I'm against), then at least make it a traditional sales tax so it "hurts" more.

Companies get refunded for all portions of the VAT tax they pay in the process of production. Ultimately, then, the consumer pays the entire amount.

I think you'll see some horizontalization of companies. One way to avoid the VAT is to reduce the chain of buyers.

Not quite. It just eliminates the intermediate collection points. The VAT still gets paid at the end of the line.

 

[Patman]

Re: Obama XIII: It's all Bush's fault.

The VAT is essentially a hidden sales tax. If we're going to go that route (which I'm against), then at least make it a traditional sales tax so it "hurts" more.

Companies get refunded for all portions of the VAT tax they pay. Ultimately, then, the consumer pays the entire amount.

I wonder if this will also allow for some social agenda manipulation... certain industries won't have to add on a VAT portion... example: "green" companies. It would be an easier base to manipulate.

No, it doesn't. It just eliminates the intermediate collection points.

tomato, tomatoe... buyers in my case means the chain which you'd have to go through to produce something.

 

[unofan]

Re: Obama XIII: It's all Bush's fault.

tomato, tomatoe... buyers in my case means the chain which you'd have to go through to produce something.

You still don't avoid the tax...the only thing consolidation solves is eliminating some paperwork and money shuffling. Even without any consolidation, the intermediate buyers would get a refund/credit on whatever VAT they pay anyway.

 

[Patman]

Re: Obama XIII: It's all Bush's fault.

You still don't avoid the tax...the only thing consolidation solves is eliminating some paperwork and money shuffling. Even without any consolidation, the intermediate buyers would get a refund/credit on whatever VAT they pay anyway.

ok... I think you're right... oh... value ADDED... bah

I'm thinking of it as "tax tacked on at each step"... not... "on the difference".

Yeah, its a sales tax and it'll act like one.

 

[dxmnkd316]

Re: Obama XIII: It's all Bush's fault.

You still don't avoid the tax...the only thing consolidation solves is eliminating some paperwork and money shuffling. Even without any consolidation, the intermediate buyers would get a refund/credit on whatever VAT they pay anyway.

I'm not an expert by any means on the topic of a VAT, but the underlined portion doesn't make sense except to create another layer to the bureaucratic mess that is the IRS. Maybe I'm not seeing it right.

 

[Patman]

Re: Obama XIII: It's all Bush's fault.

I'm not an expert by any means on the topic of a VAT, but the underlined portion doesn't make sense except to create another layer to the bureaucratic mess that is the IRS. Maybe I'm not seeing it right.

hence the 1099 issue... the goal is to pass a tax which will... well... pass. The bureaucratic mess is just a cost to get the tax.

edit: just like with the stimulus containing the death panel stuff (sorry, health rationing), the health care bill contains parts of the next marker.

 

[Red Cloud]

Re: Obama XIII: It's all Bush's fault.

The VAT is essentially a hidden sales tax, since it's built into the sticker price that the final consumer sees.

So are corporate taxes, technically, since they get paid out of revenue.

 

[Tundra]

Re: Obama XIII: It's all Bush's fault.

So are corporate taxes, technically, since they get paid out of revenue.

No. it's paid out of income. that's why 60% of corporations pay 0 corporate income tax, mostly the cyclical companies that go thru boom/bust cycle or because of deductions and tax credits like multinational oil companies.

I still can't get over exxon making record earnings and paying 0 federal corporate tax. there is something wrong with our tax scheme. And the shocker is that there is more outrage over poor people not paying "fair" share.

So maybe taxing revenue might be the correct solution. something like 10% flat tax on revenue and reduce corporate income tax rate down to -10 to 15%. I like this idea since we'll collect taxes on overseas revenue too.

 

[unofan]

Re: Obama XIII: It's all Bush's fault.

I'm not an expert by any means on the topic of a VAT, but the underlined portion doesn't make sense except to create another layer to the bureaucratic mess that is the IRS. Maybe I'm not seeing it right.

No, you're seeing it right.

At least how it works in Europe...each step gets taxed on the "value added" and the seller at each step collects the total VAT of the product at that step. Each seller also gets a credit for VAT already paid to whoever it bought goods from when it turns the money into the tax agency.

Timber company cuts trees and sells them to lumber company for X (price of timber) and Tx (VAT on timber). It then sends Tx into the government.

Lumber company turns timber into lumber. It then sells lumber to furniture maker. It collects X+Y (price of lumber) as well as Tx + Ty (total VAT so far). It then takes a credit for having paid Tx to the timber company, and turns Ty into the government.

The furniture company sells the furniture to the consumer. It collects X+Y+Z (price of furniture) and Tx +Ty +Tz (total VAT from timber to furniture). It takes a credit for Tx and Ty, and turns Tz into the government.

Note how the consumer pays the entire tax. Businesses have an added layer of paperwork. In theory, the government benefits from taxing at every step by: 1) getting its money quicker, especially on slow-moving retail items, as well as 2) lowering the chance for complete tax evasion since at some point the good or its intermediaries probably got taxed somewhere.

 

[St. Clown]

Re: Obama XIII: It's all Bush's fault.

I still can't get over exxon making record earnings and paying 0 federal corporate tax. there is something wrong with our tax scheme. And the shocker is that there is more outrage over poor people not paying "fair" share.

That's odd because according to their officially submitted financials, the total taxes paid by Exxon in 2009 - just north of $75billion.
Page 38 - http://thomson.mobular.net/thomson/7/3095/4222/document_0/XOM_SAR09.pdf

Summary Statement of Income
(millions of dollars) 2009
Revenues and Other Income
Sales and other operating revenue(1) 301,500
Income from equity affiliates 7,143
Other income(2) 1,943
Total revenues and other income 310,586
Costs and Other Deductions
Crude oil and product purchases 152,806
Production and manufacturing expenses 33,027
Selling, general, and administrative expenses 14,735
Depreciation and depletion 11,917
Exploration expenses, including dry holes 2,021
Interest expense 548
Sales-based taxes(1) 25,936
Other taxes and duties 34,819
Total costs and other deductions 275,809
Income before income taxes 34,777
Income taxes 15,119
Net income including noncontrolling interests 19,658
Net income attributable to noncontrolling interests 378
Net income attributable to ExxonMobil 19,280
Earnings per Common Share(3) (dollars) 3.99
Earnings per Common Share – Assuming Dilution(3) (dollars) 3.98

While 2010 has likely been a down year for Exxon, I somehow doubt they've completely relieved themselves of their tax burden.

 

[dxmnkd316]

Re: Obama XIII: It's all Bush's fault.

Anyone else catch the Howard Dean appearance on Morning Joe? One of the guys at the desk brought up an idea that I support but Dean didn't regarding social security. He (the guy at the desk, don't know his name) wanted to stop people who don't need social security (i.e. Warren Buffett) from collecting it. Dean pointed out that the Republicans would then attack it successfully.

My question, mostly for the conservatives and moderates out there (but liberals can weigh in as well): Would you support stopping those who clearly do not need SS from collecting it? Even if it meant they still had to pay into the program as they normally would before retirement? I'm talking the richest of the rich. How you would determine that, I have no idea. Just curious.

 

[LynahFan]

Re: Obama XIII: It's all Bush's fault.

That's referred to as "means testing," and has been discussed extensively.

I am almost 100% certain that Dean DOES support it, but knows that getting it would be a Pyrrhic victory. Most people think of Social Security as a retirement savings plan rather than an insurance plan that guards against being completely destitute during retirement. If the government implemented means testing, the program that middle-to-upper class people are now contentedly thinking of as a retirement savings plan would be clearly "exposed" as the insurance plan that it actually is. This would lead to lots and lots of people who think they won't need it to prefer not to buy it, so there would be a massive backlash against the entire program and it might result in cutting the program back much farther than liberals want.

Dean wants it, but knows it's a political landmine so he's choosing to avoid it.