Obama considering national sales tax

[McHrozni]

From what I've heard a 10% VAT would bring in 1 trillion for the US govt. a year. If that's right than a 1% tax would be 100 billion. That sounds like a pretty decent moneymaking opportunity for the government without upsetting the voting population too much.

This is presumably coming from the simplistic numbers, consumer spending is 70% of US GDP and US GPD is $14 trillion, and 10% of 70% of that would indeed be $1 trillion.

Assuming this money would be used to reduce debt, this would effectively reduce US economy by the said 7%. Oops

Note: I'm not claiming this is necessarily correct, just trying to show that such simplistic approaches don't work in determining policy.

McHrozni

 

[Beerina]

From what I've heard a 10% VAT would bring in 1 trillion for the US govt. a year. If that's right than a 1% tax would be 100 billion. That sounds like a pretty decent moneymaking opportunity for the government without upsetting the voting population too much. But much higher than a few percent tax would surely be met with one term Obama. But you know that if a VAT was even going to be talked about seriously surely it won't be before November and I agree implementation would not take effect until after 2012.

I don't know where those numbers are from so they could be totally wrong.

I heartily encourage him to shout "1%" from the rooftops, as loudly has he can, as the next election approaches.

Remember the income tax started as a measly 1% or so, and only on the very wealthiest at that. Within 30 years they had crushed a big part of the incentive to being rich, extending the depression. Note this only affected income, and not already-established wealth, such as that possessed by FDR or the Kennedys.

 

[Beerina]

More likely not - I imagine Obama would have to *cut every department* by at least 30%. Those *aren't* nice numbers.

And, of course, the more popular things, which is to say, the things handing out money to the most people, will not be touched, and they're the biggest money hogs that need to be restrained.

 

[Lurker]

Do not forget that although Bill Clinton spent the first two years of his Presidency promoting the same carp that Comrade Obama has been pushing, he was able to get very little of it passed, and the resulting backlash resulted in the Republicans taking solid control of both houses in the very next election, before Clinton had the chance to do any real damage.

Sorry to tell you data does not agree with you. Even before the Republicans came to power in 1995 the economics of Clinton looked great. Let's take a look, shall we?

Deficits
1991 $-269 Bush
1992 $-290 Bush
1993 $-255 Clinton
1994 $-203 Clinton

As you can see, real deficit reduction after the deficit was rising under Bush I. Perhaps you want inflation adjusted numbers? OK, let's take a look again.

Deficits (inf adj)
1991 $-327 Bush
1992 $-341 Bush
1993 $-292 Clinton
1994 $-228 Clinton

Wow! Awesome work by Clinton and the Democrats, wouldn't you say Bob? Now, I would think that after being provided this data that any rational person would amend what they say in the future but I have faith that you will not even consider altering what you say in light of this evidence and instead will continue to denigrate Clinton's economic record and chalk it all up to the Republicans.

After that, Clinton was only able to stay in office by pretending to be a conservative, and by going along with the more fiscally-responsible policies that the Republican-dominated legislature Congress was promoting.

Funny how the Democrats controlled Congress in 1993-1994 and Clinton did so well economically. You can thank them too, right?

 

[Lurker]

IWithin 30 years they had crushed a big part of the incentive to being rich, extending the depression. Note this only affected income, and not already-established wealth, such as that possessed by FDR or the Kennedys.

Yeah, America's got a real problem with such flat socio-economic strata. A man just can't get rich here in America.

 

[Bikewer]

So.....About taxes. Ask most Americans what they expect from government and they'll give you a laundry list. (unless they're libertarians...) Strong military, good roads, medicare, medicaid, public education, police, fire, homeland security....Yadda-yadda.

Ask them how to pay for all this, and they will usually say..."Not by raising taxes!"

Some wag once said "taxes are the lubricant of democracy."..... It's my impression that the US is considerably under-taxed compared to most other industrialized countries.
I read recently that this year the average federal tax refund is 3000.00. ( I got more...)
They did not say what percentage of taxpayers get a refund, unfortunately. Still, if a substantial percentage of Americans are getting a fairly substantial refund...Maybe we should not be screaming so much about a proposed increase of a couple of percentage points...
On the other hand, resentment of taxation seems to be in our national genes, as it were..."taxation without representation" and all... Most see taxation as inherently unfair, and it's hard to argue when huge corporate entities pay none at all.
Attempts to revise the tax code substantially have not met with any great success, to my knowledge.

 

[Lurker]

I would be for a sales tax if the money raised were used for debt relief. Plus we would have to disallow larger deficits so the debt relief would actually be meaningful.

 

[KoihimeNakamura]

And, of course, the more popular things, which is to say, the things handing out money to the most people, will not be touched, and they're the biggest money hogs that need to be restrained.

Doubt it. If this kind of spending keeps up they will eventually be restrained.

 

[KoihimeNakamura]

No. Not unless you mean balance the budget right this instant.
If the goal is to make a glide path to a sustainable level of deficit that's not necessary. Just slow the rate of growth in government and let the economy grow (which will automatically increase tax revenues).

I'm poking fun at Parky's statement. If Obama wants to null the debt before, say, 2012, he'd need to do something quite drastic.

 

[Chris Hegarty]

Looking forward to it? It will definitely help raise money (of course not enough to stem the flow of cash the government has been spending the last ten years) but I don't know anyone who "looks forward" to new taxes....

I typically do. It's mostly on principle for me; I figure the government has to become fiscally responsible at some point. There are two ways of doing this: cutting things, or raising taxes. We have a lot of neat programs that I really like, and we also have some that I dislike immensely. If we cut programs and raise tax revenues, then deficits will fall.

 

[The Fallen Serpent]

I typically do. It's mostly on principle for me; I figure the government has to become fiscally responsible at some point. There are two ways of doing this: cutting things, or raising taxes. We have a lot of neat programs that I really like, and we also have some that I dislike immensely. If we cut programs and raise tax revenues, then deficits will fall.

This is my opinion too. I look at taxes as prepurchasing important services I would definitely want but at a cheaper rate than I would otherwise purchase them. I do not agree with everything that the taxes are spent on. For instance I am opposed to a large interventionist military. However I still get the roads, schooling, utility infrastructure, police, fire and to some extent health infrastructure that I want. I have never looked at my paycheck and thought "The Man is screwing me out of my paycheck!" I suppose it also helps that I vote in favor of taxes that also come out of my own pocket, not just taxes that indirectly affect my wealth.

 

[Grizzly Bear]

http://wcbstv.com/local/vat.tax.value.2.1618053.html

its a great idea...if you wanna be a one-term president.

and I had soo much hope for the man.

Kinda why while I don't like his politics to begin with it bugs me more that he's got other opportunities to allow him to do what he wants more efficiently that he isn't taking.

What's more the state taxes already in place throughout the country range between ~5 and ~11%. I'm not sure how a national sales tax would help right now, and I'm not sure what the reception of it would be. I certainly don't like the prospect of adding a several extra percentage points to the 7% tax where I'm at.

 

[Upchurch]

Since the election, you've practically been worshipping Comrade Obama.

Oh, look at that. You've managed to undermine anything useful or reasonable you might have said.

 

[ARubberChickenWithAPulley]

I read recently that this year the average federal tax refund is 3000.00. ( I got more...)
They did not say what percentage of taxpayers get a refund, unfortunately. Still, if a substantial percentage of Americans are getting a fairly substantial refund...Maybe we should not be screaming so much about a proposed increase of a couple of percentage points...

What does getting a refund have to do with not "screaming" about a tax increase? The refund is the government giving you money back because you overpaid your taxes. Someone who got $3,000 back is getting $250/month in income back that they should have been receiving in their regular paycheck to begin with. How does this make a tax increase any easier to accept?