U.S. Sales Tax Gets Fresh Look
The Washington Post reports that in an effort to raise additional revenue, policymakers are discussing a VAT.
With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.
A recent Rassmussen report did a poll on the idea and stated that:
To raise additional money for the government, just 18% of Americans nationwide favor a national sales tax. The latest Rasmussen Reports national telephone survey found that 68% oppose such a tax. There is more support for the concept if sales tax revenue is used to provide health insurance for all Americans. In that scenario, 40% favor a national sales tax and 49% are opposed.
The report went on to ask additional questions that reflect the FairTax system.
A plurality of Americans would support a national sales tax if it meant getting rid of the federal income tax: 43% favor that trade-off, but 38% are opposed. Pluralities of Republicans and unaffiliateds like the idea, while a plurality of Democrats are against it.
Forty-eight percent (48%) say a national sales tax is fairer than an income tax while 26% hold the opposite view. The sales tax is viewed as fairer by 52% of Republicans, 44% of Democrats and 49% of unaffiliateds.
“The LACK OF TRANSPARENCY and the low economic cost of a value-added tax make it possible for this tax to raise substantial revenues relatively easily, both politically and economically.”
Bruce Bartlett
“The New Money Machine for the U.S.”
Los Angeles Times August 29, 2004
... Folks, this is VERY frightening stuff, especially if we end up with BOTH an income tax AND a VAT, ... and we see the likes of Bruce Bartlett supporting it.
Another quote from the same article on a lighter note:
“Some years ago, economist (now Harvard President) Lawrence Summers quipped that the reason the U.S. doesn’t have a value-added tax is because liberals think it’s regressive and conservatives believe it’s a money machine. We will adopt such a tax, he said, when liberals realize that it is a money machine and conservatives see that it is regressive.”
The need for the FairTax, which repeals income taxes and sunsets if the 16th
Amendment is not repealed, has become all the more urgent.
~Jim Bennett
Summit, NJ
As a sales tax the FairTax is similar to a VAT with these exceptions. VAT taxes do not have a prebate instead a VAT tax has endless exemptions, and the FairTax doesn’t tax business 2 business sales while the VAT does.
Virtually every developed country with the exception of the U.S. has a VAT. Since the FairTax much like a VAT, except for its treatment of businesses transactions and its inclusion of a rebate, no one should view the FairTax with alarm. Collecting revenues by taxing retail sales is a tried and true practice.
Imagine a VAT tax with with out millions of exemptions (food, clothing, shelter, and exceptions to the exemptions, a lobbyist dream), but a simple prebate that completely untaxes the poor on a poverty level spending, (the amount that is spent on a poverty level of living includes the cost of food clothing and shelter) while being progressive on spending above the poverty level. Also imagine removing Business to Business Taxes from a VAT tax, because all taxes are payed though end consumer purchases.
The FairTax does away with exemptions and replaces it with a prebate. The Fairtax does not tax business 2 business transactions. and only taxes end consumption. After removing those things from a VAT tax, what you have left is the form of the FairTax.
We must guard against having both the FairTax and an income tax. Removing the burdens of taxes and tax compliance cost from domestic production is one of the major points of tax reform. Why add another, albeit small cost, to the already $350 billion spent just filing tax forms, payed by 305 million Americans?
Phil Kerpen does a good job at describing this issue in his article: Be Afraid, Be Very Afraid of the Obama Administration’s Scary Trial Balloon
A VAT to pay for socialized medicine. That way we can destroy our economy and health care system simultaneously.
The additional polling about a NRST actually makes me think the fairtax has more of a chance than I previously thought (or at least the general public is starting from a better view of sales versus income taxes than I thought they would).