danw@oliven.UUCP (danw) (11/02/84)
[]
GIVEN: 1 Our income tax system stinks. (other than CPA' & IRS
agents NO one has a good word to say about it )
GIVEN: 2 The shoe store sells shoes
GIVEN: 3 Congress sells loopholes (the current tax mess IS the
aggregate of all the past loop-holes congress has sold)
GIVEN: 4 No social institution, least of all the US congress ever
voluntarily gives up political power.
GIVEN: 5 People who babble on about congress passing a 'flat rate
income tax' are hoplessly naive.
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Anyone can point out the obvious, what is the answer?
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A grass-roots movement to pass a constitutional amendment that
will make all forms of income tax illegal - and replace it dollar for
dollar with a Value Added Tax (VAT).
PROVISIONS:
1 It is illegal for any state, federal or local government in
the US to tax corporate or individual income in any way.
2 The VAT maximum total percentage tax is set by a referendum
constitutional amendment and can ONLY be changed by the same process.
This total percentage is the total of all state , federal & local VAT's .
This will have the effect of a NATIONAL prop. 13
3 Loophole no.1 staple food items are exempt. (It is legally impossible
to 'add value to' food.
4 Loophole no.2 items for export are exempt. US VAT is only applied
to items sold in the US.
5 THERE ARE NO OTHER LOOPHOLES.
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It is essential that this be done as a constitutional amendment,
effectively bypassing the congress. Otherwise the entire exercise will
become counter productive. They will KEEP income tax AND add the VAT !
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->QUESTION: Isn't VAT just a sales tax?
ANSWER: NO. With a 10% sales tax $2.00 pair of socks cost $2.20
With VAT a $2.00 pair of socks costs $2.00
ADVANTAGES TO:
Left of center stateists. VAT retains the one redeeming feature
of personal income tax withholding , it is invisible to the
user. (people are much more enthusiasm about redistribution
of wealth if they don't realize it is THEIR wealth that is
being reassigned.)
Liberterians Anything is better than the current system.
Right of center stateists. A taxpayers revolt is brewing ,
there is the ever present danger that the peasants will
turn to the easy answers of socialism if given a chance.
Lock in the status quo with a VAT.
->QUESTION: So who pays the tax?
ANSWER: Business (non export or non food) If VAT is 10% and a
business increases the value of its product by $2.00
then it must send the government 20 cents.
ADVANTAGES TO:
Left of center stateists. It will appear to the people that
they pay nothing, and the greedy capitalists get stuck.
Liberterians Those of you who own businesses know that you
send checks to the government all of the time. Nothing
changes.
Right of center stateists. Businessmen will love it. They
get to pass the cost of the VAT directly on to the consumer.
Exports are indirectly subsidized, allowing them to compete
unfairly in the export markets.
->QUESTION: Who decides that a business has added value and how much?
ANSWER: The same people you are now dealing with at the IRS .
We just change the name of IRS to something else. VAS??
ADVANTAGES TO:
Left of center stateists. Democrats have been changing the names of
bankrupt social programs for years. Make
it appear that IRS is being abolished.
Reassure IRS agents , CPA's etc. that they
have job security with the new VAT bureau.
(accept lots of money from their PACs)
Liberterians Gradualism is the buzz word , our time will come later. see
below for advantages.
Right of center stateists. This is business as usual.
->QUESTION: Who decides what the maximum amount VAT will be?
ANSWER: The people do , with a constitutional amendment.
If it is decided that a fair flat rate tax rate is
18% then the MAX VAT total tax rate will be 18%
(for example a 100% total VAT would double the cost
of items as seen by the consumer)
ADVANTAGES TO:
Left of center stateists. Fairness, hit 'm with fairness , ALL
business appear to pay the same VAT.
Liberterians The government is a gigantic rabid dog that is running
loose and growing in size and ferocity.
A maximum tax rate cast in granite,(by a constitutional
amendment) will fix for all time, the length of the leash
that this dog will be shackled to.
Right of center stateists. Actually they don't , the TOTAL is
fixed by law , what share of the total
any given business will pay is subject
to negotiation.(Endless opportunity for
campaign contributions.)
->QUESTION: You mean I get to keep 100% of my income?
ANSWER: YES.
ADVANTAGES TO:
Left of center stateists. You can't win them all. But cheer up,
people will sooner or later get tired
of hiding their money in banks and buy
something with it. At that point we can
redistribute their wealth.
Liberterians With big brother out of the income business ,we can achieve
a great measure of personal and financial privacy. There
would be no barriers to passing Swiss style Banking security
laws.
Right of center stateists. Is there an individual or a business man
that won't jump for joy when you tell them
that you have IRS off their back once and
for all. Bankers will give massive campaign
contributions for Banking security laws.
(and a chance to compete for the billions
the Swiss have hidden away)
->QUESTION: Is VAT fair?
ANSWER: Yes.
ADVANTAGES TO:
Left of center stateists. Everyone pays the same VAT by purchasing
goods in the USA. Everyone pays the same
rate NO exceptions. It is the ultimate
flat rate tax. It is inherently fair.
Liberterians This is better than dealing with the IRS. Lets not oppose
it. With time people will see the advantage of having the
dangerous dog of government on a leash. Then we can begin
pointing out that an even shorter leash will be even better.
Right of center stateists. The VAT cost is hidden in the price of each
item, the effect is the same as inflation.
If the average take home pay is increased
by the same amount as the cost of living
increase, no change in average standard
of living will result. No public outcry.
->QUESTION: Can the VAT be evaded?
ANSWER: By individuals, No. (it would be necessary
to smuggle foreign goods to avoid paying
the hidden VAT included in the cost of
all goods for sale in the US)
ADVANTAGES TO:
Left of center stateists. This is all pervasive big brotherism it
will make socialists everywhere feel good
to have thought of a tax that can't be
evaded.
Liberterians Give what is Ceasar's unto Caesar.
Right of center stateists. Conservatives are going nuts trying to stop
the drug industry. There are coke dealers
driving around in Mercedes 450's who don't
pay a dime of tax. It will make the
conservatives feel good to realize they have
thought of a way to tax the multi billion
dollar drug industry.
->QUESTION: Will anyone pay VAT who does not now pay tax?
ANSWER: Yes. The entire underground economy will
be taxed at the same rate as everyone else.
ADVANTAGES TO:
Left of center stateists. Think of all that money just waiting to be
redistribute.
Liberterians The government will soon be unable to get along without this
'new' money. Legalization is only possible after a wide spread
social acceptance of the 'necessity' of this kind of business.
Right of center stateists. Think of all that money just waiting to be
taxed.
->QUESTION: But will VAT feed the poor?
ANSWER: Yes.
ADVANTAGES TO:
Left of center stateists. Liberals will claim they were for it all
along. By exempting staple foods from
VAT , food will be held at an artificially
low price. The poor will be able to
feed themselves with much less difficulty.
Liberterians As Liberterians we can argue: Look at what a good deal food
is. If we have our way (eliminate government) all goods
will then become as cheap as food is now.
Right of center stateists. A good cheap way to feed the poor is good
politics.(they remain docile and apolitical)
->QUESTION: Will VAT increase exports (help deal with
the massive trade imbalance)?
ANSWER: Yes.
ADVANTAGES TO:
Left of center stateists. Liberals have long been crying about foreign
'dumping' and crying for protectionist
measures. The 'dumping' is not the result
of foreign philanthropy , but rather the
result of foreign VAT's that exempt exported
goods. (a fact that has been kept from
most americans). Liberals will label
the VAT a protectionist measure that gives
'those foreign capitalists' a dose of their
own medicine.
Liberterians Increased exports are a good thing.
Right of center stateists. American export business is hard hit by
the overvalued dollar. Republicans will
claim they support the VAT because it
is not protectionism but rather an
economic 'incentive' to export.
->QUESTION: Will VAT encourage savings and investments
and entrepreneurism?
ANSWER: Yes.
ADVANTAGES TO:
Left of center stateists. None. All of the above mentioned activities
are terrible and must be discouraged.
We will however support the
measure because of its other excellent
socialist features.
Liberterians 100% of your income is yours reguardless of its source.
Very liberterian. Interest, dividends ,capital gains ...
all yours, keep it all. Reinvest to your hearts content
this is capitalism for everyone.
Right of center stateists. People will quit chasing bizarre 'tax free'
investments and tax shelters and simply
put the money where it earns the best return
Reinvesting to earn more 'income' won't
be penalized. Large pools of investment
money will build up and drive interest rates
down. (conservatives claim to believe in suply
and demand). Lower interest rates are
good for General Motors and the Republican
party.
->QUESTION: Will the rich pay their fair share?
ANSWER: Yes.
ADVANTAGES TO:
Left of center stateists. The question was really 'how can we
make the rich pay more than I do'?
By having a rich life style (conspicuous
consumption) the wealthy will pay
much more in VAT as the result of
having bought more.
Liberterians This is a good start , in time we can work for
making all tax voluntary.
Right of center stateists. The wealthy enjoy being able to display
their ability to afford conspicuous
consumption. Nothing really changes.
Besides capital gains on investments
are now FREE of tax.
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Dan Wootanfaustus@ucbcad.UUCP (11/03/84)
A few problems with your sales tax: people will be very tempted to evade it by such means as barter, illicit sales, etc. I think that an income tax is a lot easier to enforce. Also, a VAT would be regressive, in the sense that the pooreer you are, the larger percentage of your income you pay (because you will presumably spend a larger percentage of your income, as opposed to investing it). And you, not the corporations, are paying the tax: an otherwise $2.00 item would cost you $2.20... Otherwise, not a bad idea... Wayne
annika@dido.UUCP (Annika Brobach) (11/08/84)
(Please note that I am borrowing someone else's terminal whilst on a visit to Sweden. PLEASE reply to <england>!ukc!qtlon!inset!jmc). I CAN'T BELIEVE IT!!! Someone thinks VAT is a good idea. I suggest that the author of this article spends approximately 5 nanoseconds looking through one page of all the code I have written to manage my own tax affairs to take account of VAT, and then see if he thinks that anything is better than the US system. Talk about the grass being greener...... VAT must be the most inefficient (in terms of collection cost) taxes in human history. It probably encourages more dishonesty than any other tax (Try getting a British workman to take anything other than cash) ever invented. In terms of paperwork it is ridiculous. Consider a product with a VAT rate of 10% Firm A sells it to firm B for 100 pounds, B pays 110 pounds, A sends 10 pounds to the taxman. B is VAT-registered, and claims 10 pounds back from the taxman. If B sells it on to C the same sort of thing happens until a non-VAT registered person (a consumer) is found who cannot reclaim the tax. This means that if B is, say, a wholesaler, all the transactions he makes with the taxman are completely void in effect. All he can hope to do is to sell in advance and get interest on the tax due until the next VAT period ends. If he is making a loss, it works the other way round and he is subsid- ising the taxman. If the US gets VAT it is mad!!! John Collins <england>!ukc!qtlon!inset!jmc tel: +44 727 57267 mail: 47 Cedarwood Drive, St Albans, Herts, AL4 0DN.
mjk@tty3b.UUCP (Mike Kelly) (11/09/84)
Here it is.....at long last.....Ronald Reagan's tax package. Simply a more sophisticated way of doing what Reagan's tax program has done for the last four years -- transfer the burden from the highest income earners to middle- and lower-income earners. Of course he'll embrace VAT. It's what Reaganomics is **really** all about. Ronald Reagan telling me he's going to "simplify" my taxes reminds me of Colonel Sanders telling a chicken about how he's going to make his life much, much easier. Mike Kelly
simard@loral.UUCP (Ray Simard) (11/16/84)
In article <524@tty3b.UUCP> mjk@tty3b.UUCP (Mike Kelly) writes: > >Here it is.....at long last.....Ronald Reagan's tax package. > >Simply a more sophisticated >way of doing what Reagan's tax program has done for >the last four years -- transfer the burden from the highest income earners to >middle- and lower-income earners. Of course he'll embrace VAT. It's what >Reaganomics is **really** all about. > >Mike Kelly I'd like to see this substantiated. As pointed out recently in the Wall Street Journal, rich taxpayers are parting with MORE dollars, and paying a HIGHER share of the total tax revenue than before Reagan, while poor taxpayers are paying FEWER dollars and a SMALLER share. I've seen this claim over and over again, in this newsgroup and elsewhere. I have yet to see anyone making this claim back it up. -- [ I am not a stranger, but a friend you haven't met yet ] Ray Simard Loral Instrumentation, San Diego {ucbvax, ittvax!dcdwest}!sdcsvax!sdcc6!loral!simard ...Though we may sometimes disagree, You are still a friend to me!