Thread: All things being equal would you vote for a VAT?

Originally Posted by sparq

You also forgot to add the property tax to the picture. If I am not mistaken, property taxes in Europe are way smaller than what the Americans pay.

Cannot believe I missed that! I don't know anything about European property taxes, but I do know that many states have lower property taxes and a state income tax ( Louisiana for example ) while others have relatively steep property taxes and no income tax ( Texas for example ).

I have not given a lot of thought to property tax. Is it fair for the state, county, city, school district, etc. to get paid because I choose to own a home, or 2, or 3. Should I, as a homeowner who has no children, have to pay for the schools of the individual who decided to have 10 children?

I don't know what would be fair here! I already subsidize the large family at work who pays the same for insurance for their family of 10 as I did at one time for my ex and I with one child. Employee Spouse and Family covers 1- unlimited children!

Another reason that without TOTAL OVERHAUL of all taxes, nothing will be "fair" to all!

VAT is nothing more or less than sales tax as I remember they had in the nineties in Texas when I stayed there. Dutch VAT is 6% on food and 19% on almost anything else including fees etc.
Part of the VAT revvenues are used to fund the EU.

Originally Posted by Kees

Part of the VAT revvenues are used to fund the EU.

Arrghh! There you go. When the U.S. is converged with Canada and Mexico, a VAT will invariably be instituted to fund the NAU.

Chris L

Originally Posted by Kees

VAT is nothing more or less than sales tax as I remember they had in the nineties in Texas when I stayed there. Dutch VAT is 6% on food and 19% on almost anything else including fees etc.
Part of the VAT revvenues are used to fund the EU.

Kees,
Thanks for the information.

Yes we do have a Sales Tax here in Texas. 6.25% state, then up to another 2% for city and county. 8.25% maximum. Then we pay federal income tax and outrageous property taxes. Plus federal taxes on gasoline, alcohol, tobacco, etc.

Do you also have income tax? property tax? others that we know nothing about?

T

Wouldn't a "flat Tax" be the same as a VAT? VAT being a across the board tax and well a flat tax being the same?

Originally Posted by singlewedge

Wouldn't a "flat Tax" be the same as a VAT? VAT being a across the board tax and well a flat tax being the same?

As stated, I am no expert. But a VAT is vastly different from a flat rate income tax. A 10% flat rate income tax would yield FAR MORE revenue than a 10% VAT. Bottom line, VAT would only apply to money spent. Income tax would apply to all money earned. As someone previously stated, a VAT would hit much harder on the less fortunate as they have to spend a much higher share of their income just to survive.

I am no expert and could certainly be wrong, but I suspect the VAT has a less regressive effect in Europe than it would here in the U.S. because there is less income disparity there and because some of the basic expenses that we pay for at least partly out of our income--I'm thinking notably of health insurance--are more publicly funded.

So my inclination would be to vote "no" in the poll. The "all things being equal" provision would influence my vote, except I don't know how we'd ever manage to get all things equal, when it comes to anything so complex as the various national, state, and local tax codes and economic structures we live with.

~Rich

Ok I understand.

Let's say that I earn $30k/year. Flat Tax 10% I pay $3k in taxes. Someone making $300k/year will pay $30k in taxes. That just doesn't seem fair when you look at it on paper. Someone making $300k a year will be far more comfortable in losing $30k than I would losing $3k. Losing $3k a year puts me at $27k per year and there is no way in heck that I can support a family of 2 kids and one spouse on that. On the other hand some one clearing $270k can easily make and keep his family comfortable.

Originally Posted by singlewedge

Ok I understand.

Let's say that I earn $30k/year. Flat Tax 10% I pay $3k in taxes. Someone making $300k/year will pay $30k in taxes. That just doesn't seem fair when you look at it on paper. Someone making $300k a year will be far more comfortable in losing $30k than I would losing $3k. Losing $3k a year puts me at $27k per year and there is no way in heck that I can support a family of 2 kids and one spouse on that. On the other hand some one clearing $270k can easily make and keep his family comfortable.

Let's start with the presumption that we can agree to dis-agree about this, because I can see no situation that would be more equitable than for everyone to pay the same percentage of income as federal income tax. Possible conversation.....

"How much income tax do you pay?"
"10% of my income."
"Wow! That's the same amount that I pay!"

Totally equal burden.

Please understand I am not speaking personally here, but you ( or the individual in question ) did make the decision to bring 2 children into this situation. Correct? Why should the "someone" making $300K be forced to pay a higher percentage of his income to subsidize the decision to have 2 children on a much lower income?

All food for thought!

There is one significant difference between a VAT and sales tax if I get it right. VAT is only collected from the final consumer of goods or services, sales tax is paid by every link in the service chain and results in higher overall taxation than VAT if the tax rates are equal.

Example: if I produce "A" and need part "B" from a provider "C"; the VAT is collected only from my customer (which depends on how much I charge for "A" alone). I do not pay VAT for purchasing "B" as I am not its final consumer.

Sales tax would be collected twice; the first time from me (I pay sales tax for purchasing "B" from "C") AND from my customer when he buys "A" from me; so the customer is effectively taxed twice for "B".

That's my guess, someone correct me if I have it wrong.

Originally Posted by singlewedge

Ok I understand.

Let's say that I earn $30k/year. Flat Tax 10% I pay $3k in taxes. Someone making $300k/year will pay $30k in taxes. That just doesn't seem fair when you look at it on paper. Someone making $300k a year will be far more comfortable in losing $30k than I would losing $3k. Losing $3k a year puts me at $27k per year and there is no way in heck that I can support a family of 2 kids and one spouse on that. On the other hand some one clearing $270k can easily make and keep his family comfortable.

That's what progressive taxation is here for. Uncle Sam puts you in your federal tax bracket according to your gross adjusted income. The higher your income his, the higher your tax rate is.