From CBS 2:A taxing development surfaced on Wednesday.
White House economic advisor Paul Volcker is calling for a new national sales tax -- a value added tax or "vat" -- to help close the deficit.
The new so-called value added tax would come on top of state and local taxes. Economists say the tax would also be imposed on manufacturers and producers.
"You don't need a PhD in economics to figure out that what the producer is going to do is pass this along to the customer," said Ken Goldstein of The Conference Board.
So if the vat is 10 percent, that sweater you pay $31.50 for today would have an additional:
*50 cents in taxes added on by the yarn supplier
*$1 in taxes added on by the manufacturer
*50 cents added on by the wholesaler
*$1.50 added on by the retailer
Now the sweater costs $35 plus state and local sales taxes, which is 8.75 percent in New York City.
One thing that may keep the Obama administration from imposing the tax this year is that every member of Congress is up for election come November. But next year, all bets are off.
Well, we wanted change. Now that's all we'll have left in our bank accounts.
43 comments:
President George W. Bush still holds the record for the most debt run up on his watch which is $4.9 trillion.
He also left with an approval rating at 30 percent and remarked about how the next president will have to deal with the debt snidely.
"Well, we wanted change. Now that's all we'll have left in our bank accounts."
Do you think that the bill for the two wars and that mortgage scam (to put it kindly) would have magically disappeared if the old man and the moron had been elected?
Clinton left a semblance of fiscal sanity and balanced budget. Bush, just as his mentor Reagan left the largest deficit in the Nation's history and an economy collapsing from eight years of lax regulation and raw greed.
Bush left a absolute mess and this poor bastard (Obama) has to clean it up. What he has done with the program of stimulating the economy is exactly what economists all over the world have done in this situation. Thankfully it is starting to work.
"We wanted change?"
Speak for yourself.
Good government will spend your money much more intelligently than you can. Fork it over buddy! redistribution is in progress - the locomotive is steaming down the track at a fast clip - join the tea party to derail the train before it arrives at your station!
Hey crapper, I'm so glad you're going so far outside the bounds of Queens that Brooklyn, Manhattan, upstate and now the whole damn nation are your topics. Pretty soon you can circle the entire globe and jam your head literally up your ass.
Stick to the borough you don't-really-know-but-act-like-you-have-all-the-answers-for. When you go even a little bit outside its bounds, you sound glib.
above anon- I think you are the jackass. a VAT will affect people in Queens. Who in their right mind is in favor of yet more taxes? Either you have no money so the tax wont impact you much (or wait, yes it will!) or you have money and enjoy other people taking it from you. The level of idiocy on this site sometimes is astounding...
keep blaming bush, lino - that's the solution.. and while you're at it, make sure you don't mention cuomo when talking about the mortgage "scam"
>>Bush left a absolute mess and this poor bastard (Obama) has to clean it up. <<
Why does Volcker want us to pay for it?
www.forgotten-ny.com
"I'm so glad you're going so far outside the bounds of Queens that Brooklyn, Manhattan, upstate and now the whole damn nation are your topics."
If Queens secedes from New York City, New York State and the United States of America, then I will make sure I only post topics that are of interest to the people that live within the limits of Queens. Until that time, all topics that affect us are game.
That's what happens when you bet your livelihood on an empty suit with empty promises of "hope" and "change"
Crapper, this article needed to be posted, so f*ck the complainers.
Please note that Obama has not mentioned this tax and nor has Pelosi or Reid.
How short are our memories.
So how is the VAT different from the national sales tax that the Republicans wanted to replace the income tax with a few years ago?
http://www.foxnews.com/story/0,2933,140076,00.html
The only difference between the national parties are that the GOP is a little bunch of big thieves and the Dems are a big bunch of little thieves.
That being said, a parochial blog really should stick to parochial issues...
President George W. Bush still holds the record for the most debt run up on his watch which is $4.9 trillion.
True, but Obama is giving him a run for his money. Or should I say "OUR money"?
Hey crapper, I'm so glad you're going so far outside the bounds of Queens that Brooklyn, Manhattan, upstate and now the whole damn nation are your topics.
It's HIS website, not yours! When you get a website, we'll see how many visitors you get!
That being said, a parochial blog really should stick to parochial issues...
And a pedestrian commenter should stick to pedestrian issues!
"Please note that Obama has not mentioned this tax and nor has Pelosi or Reid."
Pelosi has certainly mentioned the VAT:
http://tinyurl.com/yb3mq89
The current tax system in this country is broken. I don't know if a VAT is part of the solution, but the bigger part of the solution has to come from taking on the interests that benefit from the status quo. The farm industry subsidies, for example. And hedge fund managers, who pay a 15 percent rate on very high incomes by using the capital gains loophole.
The problem is that the rich who fund campaigns do pretty well by our current broken tax system. They also do pretty well, incidentally, by our broken immigration system, where the laws on the books are barely enforced and employers who take advantage of cheap illegal immigrant labor aren't held responsible. The negative consequences of such policies, however, are not borne by the rich. It's not in Manhattan that you'll find the day laborers congregating on the sidewalk.
All right now children. Let's review for our test:
"Andrew Cuomo and Fannie and Freddie. How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis."
http://www.villagevoice.com/content/printVersion/541234
hey lino clinton not bush started the mortgage breakdown by believing that all americans should own a home veen if you cannot afford it the mortgage act that he passed allowed this to happen clinton not bush opened the doors to the mortgage downfall.
Obama has run up the deficit more than all other presidents combined. Oh how I laugh when I read people saying they don't understand why income taxes are high, yet they applaud the health care bill, they applaud illegals. I really think some people have the common sense brain cell unformed before birth.
Those taxes on the "sweater" will hurt the economy more. No more impulse buying. I'll only buy two sweaters next year instead of four. So then the seamstress, the manufacturer, the store and the sales clerk all lose too.
then we give up some of our nukes and are sitting ducks and a sweater or a tax won't matter anyway. After the forced health care tax, who is going to buy sweaters anyway?
A few things...
The idea of hyper-local coverage doesn't include the bounds of national tax policy. Take a slice of Queens, show how it could be hurt by this and it'll deservedly earn a place on this blah-g. Until then, you're just taking ideological stances and placating to the lowest common denominator - a.k.a. the steadiest reader - of your blog, Crapper.
Secondly, neither Clinton, nor Bush, nor Obama created the Credit Default Swaps that helped the real estate, lending and financial industries essentially collapse. That was a byproduct of mega banks duping themselves and us into believing there's an endless stream of debt-ready paper in this country. When someone turned around to cash out, shit hit the fan. (Coincidentally, that same move brought down Bernie Madoff). All of this falls on the shoulders of "spirit and justice of the free market" goons who believe in the austere nature of an unfettered economy. Spare yourself the blame-game horseshit.
If you buy into the hands-off model of economics, rail against taxes and SEC regulations, then eat your own shit pie and pay up on your next pair of 48-inch Dockers. It's your ideology that allowed AIG, Goldman, JPM, Bank of America, Lehman Brothers, Bear Stearns, etc. etc. etc. to rob the market blind, instead of having the regulatory leverage to call bullshit for what it was.
Blame Obama for bailing them out (even though he inherited it from Paulson - I mean Bush). And blame your tax increases on having to correct the budget deficit. But please, leave the nonsense about the illegals and healthcare for another day. This has nothing to do with it.
If you buy into the hands-off model of economics, rail against taxes and SEC regulations, then eat your own shit pie and pay up on your next pair of 48-inch Dockers.
At the other end of the spectrum:
"If you buy into the centrally planned model of economics, rail against technological innovations and the bounty of goods available to the American consumer, then eat your own shit pay and move to North Korea where you can also eat tree bark and not have to worry about economic inequalities, nor engage in pointless conspiracy theories involving AIG, Goldman, JPM, Bank of America, Lehman Brothers, Bear Stearns, or other such navel gazing. Kim Jong-Il and his merry band of central planners have done quite well with that economy, ya think?"
The rest of your screed has as much coherence as something written by the 9/11 Truthers or the Obama Birthers. Did you take your litium today?
i blame the baby boomers and all the social experiments (i'm lookin at you Linolbermann)...they left nothing for the rest of us
i wonder how cat food tastes?
Once again, some jackass thinks he is going to tell me what to post on my own blog, then goes on to post some written diarrhea on the very subject he doesn't want to see on the blog in the first place.
I guess people coming here for hyper local content also have opinions on national policy that affects them. Imagine that.
So how is the VAT different from the national sales tax that the Republicans wanted to replace the income tax with a VAT tax a few years ago?
Well for one Decomcrats want a VAT tax AND an income tax.
the federal government is bankrupt
most state governments in our country are bankrupt
social security is bankrupt
medicaid/medicare is bankrupt
several times a month we read about politicians who are under investigation for some kind of fraud or corruption
over the past 100 years we've been represented by both democrats and republicans, some better than others, but all of these things have continued to occur no matter which party is in charge
their answer? Value Added Tax
why do you think there is a populist uprising these days? is it because they're all racists? it's just laughable...and believe me, all the politicians are having a good laugh at us while we argue about which side is to blame
pointing fingers towards one party or the other is the hight of idiocy
send a message, vote out all incumbents
mandatory life sentence for all politicians convicted of stealing or corruption
A VAT is one of the most regressive taxes going because unless most necessities are exempted, it will take a higher portion of a lower income person's salary.
By the way, if you buy used goods can you escape the tax?
Aaaaand Florida house leaders have nothing whatsoever to do with this story. Keep posting it, though, I like the thought of you wasting your time.
Anonymous - "hey lino clinton not bush started the mortgage breakdown by believing that all americans should own a home veen if you cannot afford it the mortgage act that he passed allowed this to happen clinton not bush opened the doors to the mortgage downfall."
wrong - it was Republican Phil Gramm a.k.a Foreclosure Phil:
"Presenting the Texan’s history of bending over backward to help out Wall Street and the banking industry in general, Corn fingers Gramm as a “lead perp” in causing the “biggest financial catastrophe of our time.” He bolsters his case by digging out an intriguing and largely unnoticed piece of legislation that Gramm pushed through Congress in December 2000: the Commodity Future Modernization Act.
Thanks to contemporaneous distractions like Bush v. Gore, almost nobody read the legislation, which prevented regulation of derivatives called credit-default swaps—contracts that insure against the default of a security. Corn says we’re all paying for that now because the consequences were disastrous—and his case is strong"
"For starters, the legislation contained a provision—lobbied for by Enron, a generous contributor to Gramm—that exempted energy trading from regulatory oversight, allowing Enron to run rampant, wreck the California electricity market, and cost consumers billions before it collapsed…
But the Enron loophole was small potatoes compared to the devastation that unregulated swaps would unleash…
In essence, Wall Street’s biggest players (which, thanks to Gramm’s earlier banking deregulation efforts, now incorporated everything from your checking account to your pension fund) ran a secret casino."
right, i'm sure it was one republican responsible for the entire housing debacle
what about Bawwwwwwwwney Fwaaaaaaaank
"In 2003, while the ranking Democrat on the Financial Services Committee, Frank opposed a Bush administration proposal, in response to accounting scandals, for transferring oversight of Fannie Mae and Freddie Mac from Congress and the Department of Housing and Urban Development to a new agency that would be created within the Treasury Department. The proposal, supported by the head of Fannie Mae, reflected the administration's belief that Congress "neither has the tools, nor the stature" for adequate oversight. Frank stated, "These two entities...are not facing any kind of financial crisis.... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Conservative groups criticized Frank for campaign contributions between 1989 and 2008. They claim the donations from Fannie and Freddie influenced his support of their lending programs, and say that Frank did not play a strong enough role in reforming the institutions in the years leading up to the Economic crisis of 2008."
i'm sure bawney had nothing to do with anything...is it so hard to admit that your beloved democrats were part of the problem? they wanted poor people to own homes...noble goal but unfortunately not great for business
obviously anyone who is against banks loaning money to people for homes they can't afford are racists
You go! Babs. Barney Fwwank is a big part of the problem. The banks were too wimpy to fight against the strongarm tactics of houses for poor people.
For the person that doesn't get the national sales tax:
you will pay your income taxes
your state taxes
your city taxes
your fed taxes
fica
medicare
local sales tax
AND possibly a whopping 20% national tax.
so people who are barely making it will steal toilet paper from starbucks and napkins, because who wants to pay $12 for toilet paper?
and the people who can save a little bit now won't be able to.
and no one will buy like they used to (if they are now) and the whole thing tanks. Then add on the medical insurance fine if you don't want to pay for medical insurance. Then the rich (the people who CREATE JOBS) have to pay a bigger capital gains tax and before you know it, the spread=the-wealth Marxist economy is here for good. Then the gov't will start stealing your property, then they kill you like Stalin did.
get the idea of what is going on?
Q: What does a national sales tax have anything to do with the VA, the disabled, Republicans in Florida using donations to visit strip clubs, or Democrats encouraging bad mortgages?
A: Nothing! My readers just can't stay on topic because they are partisan nutcases with ADD.
The topic is a NATIONAL SALES TAX. You know, when you buy something, they charge you more, and it goes to the Feds.
How did we manage to close the deficit in previous years without a VAT?
Vote Out Bush!! oh wait...
Vat? Nut Cases mit ADD? Anudder von. Hahr-hahr-hahr. Schtopp, pleeze schtopp.
The topic is a NATIONAL SALES TAX. You know, when you buy something, they charge you more, and it goes to the Feds.
Tuesday, April 13, 2010
Yes thats right, to pay down the debt which has been mentioned as a priority by Obama and left by Bush which he remarked about jokingly for the next president so there are related topics. So the mortgage scam caused the financial troubles and deficit?
Alright now thats hilarious.
Whoeveer said Enron was small potatoes in the economic mess are deluting themselves willfully cause that went into the billions with tax money and they fixed artificially the California blackouts.
Okay. Instead of concerning yourselves with who to blame, why not discuss whether this would be a smart thing to do or a bad thing to do.
I know it's hard, but you can do it.
depends on how much value is added...i'm for it if it adds a lot of value, but if the value isn't so much then i'm against it
We are overtaxed as it is. The State budget is in shambles and we will fork over more taxes. If you add the VAT tax in addition to all the other taxes, no one will be able to afford to shop and jobs will decrease. Did the government ever consider lowering some taxes? More people would be able to shop. How did they close past deficits? I think that before they impose the VAT tax, they need to cut out all the waste and inefficiency in government. Once they do that, there won't be a neet for the VAT. It sounds to me like we are all screwed. Big Time!
I'm against it. Let Obama just stop spending. I don't want to pay more taxes and people who do are usually not thinking straight. Let Obama and Congress work for two years for no money instead.
As long as we all have to suffer, why not impose term limits on all politicians from the President on down and why not cut all their salaries and benefits? They are no better than us and should live like the common man. Did you notice that Congress won't have the same Medical Plan as us? They made sure they got the sweet deal? Why? Are they better than us? I think it's time to start cutting at the top. Get rid of their huge pensions, benefits and salaries. They are out of touch with the American people and need to know how we have to live within our means.
Queens Crapper Okay. Instead of concerning yourselves with who to blame, why not discuss whether this would be a smart thing to do or a bad thing to do.
I know it's hard, but you can do it.
For once I agree with Crappie. Obviously someone's screen name has been hacked.
This is not a particularly thoughtful or useful article. Missing is a discussion of the actual mechanics by which the VAT works. VAT was designed, in the 1950s, to avoid the pyrimidal piling up of taxes on goods as they make their way from raw materials to finished goods. God help me, the best explaination for how it works that I've been able to find is on the WikiPedia of all places. Here's a series of examples it gives:
Without any tax
* A widget manufacturer spends $1.00 on raw materials and uses them to make a widget.
*The widget is sold wholesale to a widget retailer for $1.20, making a gross margin of $0.20.
*The widget retailer then sells the widget to a widget consumer for $1.50, making a gross margin of $0.30.
With a North American (Canadian provincial and U.S. state) sales tax
With a 10% sales tax:
*The manufacturer pays $1.00 for the raw materials, certifying it is not a final consumer.
*The manufacturer charges the retailer $1.20, checking that the retailer is not a consumer, leaving the same gross margin of $0.20.
*The retailer charges the consumer $1.65 ($1.50 + $1.50x10%) and pays the government $0.15, leaving the gross margin of $0.30.
So the consumer has paid 10% ($0.15) extra, compared to the no taxation scheme, and the government has collected this amount in taxation. The retailers have not paid any tax directly (it is the consumer who has paid the tax), but the retailer has to do the paperwork in order to correctly pass on to the government the sales tax it has collected. Suppliers and manufacturers only have the administrative burden of supplying correct certifications, and checking that their customers (retailers) aren't consumers.
With a value added tax
With a 10% VAT:
*The manufacturer pays $1.10 ($1 + $1x10%) for the raw materials, and the seller of the raw materials pays the government $0.10.
*The manufacturer charges the retailer $1.32 ($1.20 + $1.20x10%) and pays the government $0.02 ($0.12 minus $0.10), leaving the same gross margin of $0.20.
*The retailer charges the consumer $1.65 ($1.50 + $1.50x10%) and pays the government $0.03 ($0.15 minus $0.12), leaving the gross margin of $0.30 (1.65-1.32-.03).
Is this a good idea? I'm not sure. Sales taxes are usually considered regressive - that is, they fall more heavily on those least able to pay. But, as a tax on consumption it would perhaps promote thrift. And if certain classes of goods, like food, were excluded, or set at a very low rate, and things like yachts and private jets taxed at a higher rate, it could possibly approximate progressivity. This is what the Washington Post had to say about the idea last year:
What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, "100 Million Unnecessary Returns," Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 -- about 90 percent of households -- from the income tax and would lower rates for everyone else.
And in a paper published last month in the Virginia Tax Review, Burman suggests that a 25 percent VAT could do it all: Pay for health-care reform, balance the federal budget and exempt millions of families from the income tax while slashing the top rate to 25 percent. A gallon of milk would jump from $3.69 to $4.61, and a $5,000 bathroom renovation would suddenly cost $6,250, but the nation's debt would stabilize and everybody could see a doctor.
If anything, this reminds me of the right-wing "FairTax" movement, which proposes a 23% national sales tax and no income tax. Maybe it's something both sides of the political divide can come together over, though I doubt it.
Anonymous: before you know it, the spread=the-wealth Marxist economy is here for good. Then the gov't will start stealing your property, then they kill you like Stalin did.
get the idea of what is going on?
What's going on is that you're clearly off your meds again. Let's get this straight once and for all, this is a proposal to make a change in the tax law (not even an official proposal, really), not a proposal to stamp out freedom forever and establish a totalitarian dictatorship in the United States. This is a tax that exists in most countries all over the world, including in more than a few democracies that share our values. Like Australia, the United Kingdom, Ireland, New Zealand, Germany, Italy, Argentina, Japan, Switzerland, Brazil, Finland, Norway, Iceland, Canada, South Korea, Spain, the Netherlands, Austria, Belgium, and that worst of all countries, France. None of these places are gulags. So, please, try to be a serious person and argue the merits of this thing on its merits and not your weird paranoia.
Here's more than you'd ever care to know about VAT, as linked by economist Greg Mankiw:
http://www.aei.org/docLib/ViardTaxNotes310.pdf
I haven't read the whole thing, nor would I expect you to.
But the conclusion on the very last page is the best part:
"A VAT is receiving increasing attention as a replacement for part or all of the current income tax or as a new revenue source. Economists have long been enamored with consumption taxes, including a VAT, because of their economic efficiency. But this efficiency is also a potential problem because this feature may be one explanation for the growth in government in many developed economies. A number of issues must be resolved before a VAT is adopted in the United States.
Question: Do we REALLY want government to grow any further?
I don't.
What's going on is that you're clearly off your meds again.
HA HA HA! Very funny!
When Ridgewoodian starts accusing others of being "off your meds", then we can be sure the lunatics have taken over the asylum!
"If anything, this reminds me of the right-wing "FairTax" movement, which proposes a 23% national sales tax and no income tax."
how is adding a national sales tax on top of income tax similar to replacing the income tax with a sales tax?
i'm no mathematician but i believe paying two taxes is twice as many as paying one tax (not to mention state sales tax)
does anyone really believe that state or federal governments have the discipline to solve any financial problems? it's a game to them
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