If anyone wants to see the results of this "consumption tax" just look north of the border. Canada introduced this tax(goods and services tax) in early 90's. Their dollar lost 20% and hasn't recovered. Small business owners got killed since everyone of them is a tax collector for the federal government as well as provincial. The consumer refuses to pay this tax so small businesses have to "eat" it just to stay afloat. Just think every time you go to restaurant, anything you buy has this tax. The Canadian standard of living has dropped because of this. Also bear in mind the rational behind this tax is you are not to pay any other tax. Well , well do you think governments are going to get rid of personal taxes or corp taxes no way. So you end up paying tax on EVERYTHING. Look at Australia they introduced this tax. It killed their dollar. They're in the dumps. Every country that introduced this tax went into the shithouse. America you don't need more taxes. You need governments that don't throw money at citizens of other countries and expect the poor taxpayer to keep shelling out.
Another thing, the Swiss bankers and all other off shore banking operations are celebrating. If this eventually goes through and once they start talking about it, it's on it's way. It will be like New Zealand, Canada , Australia etc. rich people will move huge amounts of their money to off shore banks. And if one reads up on these other countries many of their politicians (especially those who introduced this rotten tax) have been accused of owning Swiss bank accounts but because the Swiss are so professional nothing can be proven. Ask small business owners in Sydney and Montreal. Politicians are the one's "who only pay cash"
Tax reform and simplification are complicated by the need to have a transition period. Unfortunately, the big government/high tax politicians of both parties ( although almost all Dem's fall in this category) will use any transition period as a chance to impose both taxes permanently. A consumption tax makes a lot of sense, provided you repeal the income tax at the same time. Otherwise, forget it. Remember the income tax was originally sold on the basis that it would only be 2 or 3 % max. Any federal VAT or consumption tax will be 15-20% before you can sneeze, just as in Europe and Canada. Take a look at the breakdown of your telephone/isp bill. Mine is about 40% tax.
That's my point. Governments DO NOT eradicate income taxes which is the theory behind consumption tax. One can see how Democrats are so against any kind of tax cuts. That is how they maintain voters, they throw money at them. The main thing about "liberals' is they want to be compassionate , only though they want to be compassionate with OTHER PEOPLE'S MONEY. So I really don't see any repeal of income taxes.
Oh, I see... this democratic "compassion" seems VERY UNLIKE the compassion that the bush administration has for the people of iraq... so Bush can take MY GODDAMN tax dollars and show compassion for the POOR, OPPRESSED people of iraq.. i'd rather have MY TAX DOLLARS spent on compassion for AMERICANS than the IRAQIS
I really did not want to get involved in this thread. But I am stuck not trading, (home sick), and am bored enough to say just this: REGRESSIVE TAXES are a tax on the POOR! VAT fits in perfectly with the reduction in income taxes for the top 1%. This is NOT a Dem/Rep. issue. It is a rich screwing the poor issue. It MAY be a Lib/Cons. issue to a degree. But truly it benefits rich liberals and hurts poor conservatives. So I am not sure there are not a tremendous amount of crossovers on this issue. One thing for certain. Doesn't take a genius to know that a guy that makes $50k a year and Bill Gates have close to the same budget on socks and underwear (I guarantee that Gates doesn't buy Versace underwear). Why will they pay the same tax? This is just an exaggerated sales tax that hurts those that can least afford it. And helps those that are not impacted by their spending at all. Peace, rs7
exactly - this is just an additional tax in different clothes. either bring it in with a reduction in the existing income tax rates, then gradually raise the income tax back to current rates, or introduce it with a phase-in period then eliminate the phase-in, leaving both. net effect is to raise the sales tax without raising the "sales tax," and to let the feds get in on the sales tax action. wonder if this proposal is linked to Iraq -- the hundreds of billions poured into the middle east have to come from somewhere...