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Say "VAT", and You Say a Financial Mouthful
The June issue of Fortune Magazine has an article about the Federal Budget and the impact of Obama’s plan for the economy on the national debt. In “We Owe What?”, Shawn Tully estimates that each of us has a $155,000 share in the projected US debt. (Yikes!) The article argues that our national debt will rise so high that the most probable way of reducing it will be a VAT (Value-Added Tax).
A VAT would tax purchases at 10-15% and generate the money needed to pay for the POTUS’ agenda and balance the budget. It would be imposed like a Federal Sales Tax and be paid along the chain of production by both wholesalers and retailers. A product gets more expensive as it goes through the production process and moves from wholesale to retail to consumer.
Thus, a VAT is a cumulative tax, because everyone in the chain of production, sale, and purchase of a product pays a tax. The added cost is passed on to consumers in the form of higher prices. A VAT would hit middle and lower earners harder than the rich, because they will use a higher portion of their income to buy things than the rich do.
Do you doubt a VAT is coming? Well, I sure hope you are right, but, just to know, realize that Paul Krugman agrees that a VAT is coming. According to the Fortune article, Krugman believes: “There’s probably a Value-Added Tax in our future.” In truth, many Ivy League intellectuals, who pushed ideas of a global economy and preached the “earth is flat” meme that pushed third-world economies into prominence and ours into decline, seem to be getting on the VAT bandwagon. If they want us to join our European allies and establish a VAT in the form of a national sales tax, it must be a good idea, right? 
Rahm Emanuel’s brother, Ezekiel, is one of the biggest promoters of a VAT, so I definitely think Obama has had a Vat conversation or even two, especially since the POTUS cut his political teeth as a member of the tax-loving political juggernaut known as the Chicago Machine. Ezekiel Emanuel, whose photo is on the right, has been serving as a White House advisor on nationalizing our health care system. He wants VAT revenue for the proposed health care system, which is confusing in itself because the new health care system is supposed to save us money. (So, why increase taxes to pay for it?)
A Value-Added Tax would not take the place of the Federal Income Tax. It would be an additional tax. Hmmm, when exactly are we allowed to say, “Stop it, we’ve had enough.”? Now seems right to me.
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we already have one form of VAT. It's that "value added tax" figured along the production trail that has resulted in the current "just-in-time" manufacturing theory. Manufacturers have to pay a tax (I think as part of their property taxes) on inventory they maintain and the value added to it by work they have done. Since the name of the game is "avoid taxes any way you can", they simply don't keep anything in stock unless they have to.
What this has resulted in is out-of-stock items, longer waits for products and exploding shipping costs because products aren't held on-premises until there's a full carload but shipped in dribs and drabs instead. You and I are already paying for that.
Now we get another one? Great. I wish I could work up some outrage over this but my outrage meter has been pegged for so long there's nothing left.
They get the gold mine. We get the shaft. Same song, tenth verse.
WHERETHEHELL IS MY ERA???
...have a way with words ma'am. "They get the gold mine. We get the shaft. Same song, tenth verse." LOL, love it!
"Right wing sledge hammers never, ever help us." Pacific John
she is a wordsmith, and I'm glad she's here.
me 2
Civil Discourse - ERA - A Mother President - Women's Rights - Primary Reform
and pour us all a good frothy libation for us while we toast some things and roast the rest.
The VAT has always been something you hear Republicans touting, but I never thought the Democrats would even consider it. I have been reading a lot about this for the last few months, and the Dems are definitely considering it now. Funny how they decried it in the past when Republicans brought it up, but now it sounds like a plan. Adding a VAT would make make it so that people, who are struggling anyway, wouldn't even be able to afford necessities.
it reminds me of that book Nickel and Dimed. Those people who have problems now making ends meet will suffer under a VAT. The middle class will lose its current standard of living. The whole thing stinks, especially when we now know thanks to Ron's post that GS paid only 14 Million in taxes after taking in billions of dollars.
Hello, came here on an invite you sent out over at Hillbuzz, found your link through Cinie's blog. VAT tax makes me think there will be alot more bartering, business to business, neighbor to neighbor, going on in the future. Free people are a crafty and wiley bunch. Go ahead, try and tax my garage sale lamp with a VAT!!! lol
Good to meetcha!
I won't speak to the VAT thing because i don't know except the few times I've gone to Canada, I got the VAT back after i filed the proper form in triplicate.
Civil Discourse - ERA - A Mother President - Women's Rights - Primary Reform
Nice to meecha, too. Was perusing the rest of your impressive site. Good people on your blogroll. I'm a PUMA supporter, whole hog, and a ticked-off blue-dog democrat with neo-con tendencies, in exile. Got pulled in by TD's, Cinie's, and Uppity's work last fall. I snark alot, don't spell check enough, and blog in incomplete, and sometimes incoherant sentences. If I annoy you, just tell me, I'll go away
Civil Discourse - ERA - A Mother President - Women's Rights - Primary Reform
What took you so long?
Welcome to Partizane, Swell. Enjoy the ride.
WHERETHEHELL IS MY ERA???
Now I won't be the only one that snarks a lot, doesn't spell check enough and blogs in oncomplete and incoherant sentences depending on the amount of outrage exploding out of my ears. If you stay it will be harder to hit two moving targets.
A Dishonest/Biased Media Is A Crime Against Democracy!
I mis-spoke, I got your invite from Uppity's Blog.
Obama (and for that matter Emanuel and Axelrove) received early political experience as a willing member of the legendary Chicago Machine, which loves to generate revenue through taxes. (I'd keep that garage door closed, Swell, if I were you.) The latest tax initiative in Illinois is to tax services; my beautician would need to add the proposed tax to the price of a haircut.
This country has all kinds of underground economies. Bartering amongst the free people is very doable. Screw VAT! It's the body mass index tax we gotta worry about.
will do ANYTHING to avoid having the wealthy and super-wealthy pay their fair share. That is the only plan they have - keeping their cronies fat and happy for as long as possible.
If the VAT tax helps do that, they'll try to make it happen. Count on it.
it's a big zero. "Corporatist enablers"? Oh yes, they are!
When Democrats were outraged at the Republicans for suggesting a VAT the Republicans were talking a value added tax instead of the federal income tax, not in addition to it.
Sometimes those evil Republican rat-bastards aren't quite as evil as the Democrats most of us have supported all our lives. I know that they are a bunch of "Johnny One Notes" in their mantra of "cut taxes, cuts taxes and here's a plan, cut taxes". But it looks to me as if their accusation that Democrats would tax the living crap out of all of us was the truth.
Oblahblah has all ready broken so many promises I haven't the time to list them all, or the patience, but he broke his promise about taxing poor folks with the tax on cigarettes.
Stupid rich people that still smoke are in a better position to pay that extra money for a pack of smokes than stupid poor people that still smoke. At least that's what I tell my significant other who is among the latter. Stupid poor folks that is.
A Dishonest/Biased Media Is A Crime Against Democracy!
I'm sick of people using old mindsets as identifiers since the game has so obviously changed. The progressives are so far removed from what the Democratic Party once was that a person would have to be asleep 24/7 to miss it. This is a new playing field, and people need to understand the turf rules. It looks like the Dems are out to destroy the middle class; nothing else can explain their unreasonable and irrationale behavior.
(By the way, Marge, I got to the Senator Franken post late; I can't stand him either and believe he has the Machiavellian temperment of Pelosi. The idea that he is in the Senate makes my head hurt. I don't know what people thought they were getting by casting their vote for him. He was an awful comedian, if that's what you call what he did. He helped bring down AirAmerica, so he didn't do good work there either. Oh, I get it! (Head Thump!) He's a loser; that's why he is in the Senate.