Wednesday, February 17, 2010

Screw that! We won't VAT!

So, in yet another hair-shirted NYT piece in which the writer bemoans "gridlock" in "ungovernable" America (without explaining how a federal government controlled entirely by one party is "gridlocked") we get to the meat of the issue, which is this: Europeans are cool. Europeans have a VAT. All cool Americans really wish they were European, but don't want to move there and learn a foreign language, so instead, we'll just get a VAT here, which will make us feel more European every time we look at a bloated receipt.
Yet economists, including veterans of past Republican administrations, are vocal in insisting that the debt problem is too great to be solved without increasing revenues somehow and perhaps moving to a new consumption tax system like Europe’s.
Fine. Do away with the income tax and we'll talk sales tax. And not "consumption", but one-time "point-of-sale". Go talk to Boortz; he'll explain it and explain it and explain it until you beg him to shut up.


genedunn said...

Support the FairTax!

(No, I am not Neal Boortz)

Bram said...

"The one-time costs of stimulus and bailout measures are “really small stuff” relative to the rest, Mr. Auerbach said"

The trillion dollar stimulus? The stimulus spending that is now part of the baseline? The stimulus that only "saved" jobs rather than creating any new non-government ones? The 2009 stimulus, not the forgotten $152 billion Economic Stimulus Act of 2008 - passed by the Democrats in Congress and signed by President Bush in Feb. 2008, right? The stimulus that is crowding out billions of dollars of capital that otherwise might flow into the private sector to generate real jobs and economic growth? That stimulus is small stuff?

Still waiting for those Obama "hard choices" to fix the mess he inherited (from his own brief irresponsible Senate career). The most mind boggling part of this article is that the NY Times didn't publish it on the Editorial page. This is supposed to be reporting? No wonder they are bankrupt.

Joanna said...

Glenn Beck had Arthur Laffer on yesterday, talking about the coming economic effects of the path we're currently following. I tried to stick around for the solution and couldn't do it. I had to go watch cartoons instead. It felt more useful.

perlhaqr said...

It must be nice to be able to buy a new gold plated Ferrari every day and then say, when the bill shows up, "He's going to pay for it, not me!"

Fuck these people. Just fuck 'em straight in the ear.

2yellowdogs said...

Short of a straight flat tax filed on a post card-sized return, the next best thing is a national sales (not VAT) tax....IF and only if they repeal the income tax.

Which, of course, will never happen.

Stranger said...

A 25% POS tax on everything would more than fund necessary services for
Federal, State, and local governments. Considering that most "middle class" workers get through paying direct and indirect taxes about Thanksgiving, that would be a great improvement.

Unfortunately, as soon as you do away with all other taxes and impose a flat tax, the privileged classes will insist that it is unfair for the "poor" to pay taxes and here we go again.


Anonymous said...

How about we borrow the idea of Wookie-in-Chief Boston T. Party from "Molon Labe!" and waive the sales tax for all armed individuals?

This would force liberals to pay all the taxes, which is only fair.

Shootin' Buddy

Anonymous said...

Yeah, raise those taxes. Revenue-neutral means insufficient income to the feds to do jack-shit. Revenue-enhancing means taking more money out of an already in-the-toilet economy; dumber'n dirt.

The debt problem is too great, period, now. The only possible hope is to cut the federal budget at least in half.

IOW, there's no possible hope.


Rabbit said...



alath said...

"IOW, there's no possible hope."

Actually, some relatively minor adjustments to entitlement programs could get our fiscal projections within the "sustainable debt mess" ballpark - as opposed to the "catastrophic debt mess" path we're on now. Tweaks like raising the retirement age, cost controls for medicare/aid, adjusting benefits, etc., could make the difference between manageable levels of debt and totally crippling levels of debt over the next 10 years.

The "only" problem is that any such adjustments would be extremely unpopular, and whichever party tried to implement them would be instantly voted out of office in favor of the other guys, who would be promising "The Moon! For Everbody! And Free!"

The only cure for THAT would be an electorate who prefers unpalatable truths to pathological fantasies.

OK, I guess you're right: it is hopeless.

Diogenes said...

"Go talk to Boortz..."

I first read that as "Go to Boortz", and thought, "Now there's an epithet..."

TJP said...

Exactly how much non-governance and gridlock does it take to make the statists give up and go home? Let's aim for a goal, here.

Joanna said...

"Exactly how much non-governance and gridlock does it take to make the statists give up and go home? Let's aim for a goal, here."

Non-governance and gridlock is their goal, you son of a silly person. If nothing can get done, then inertia sets in and they become part of the immovable object. It's cute that you have hope, though. *head pat*

John A said...

VAT. I cringe every time I hear it. It is just a fake, somewhat nice-sounding name for another layer of sales tax structure.

Look, we already have thousands of "Value-Added" taxes. Every time something is sold or moved, it is taxed. I have known this since the 1950s, when a Reader`s Digest article pointed out that of the twenty-two cents a loaf of bread then cost at the local market, twenty cents was directly attributable to taxation.

The Raving Prophet said...

When the only areas in which they want to freeze spending are non-security discrectionary line items, we're well beyond hosed. First, that's a darn small chunk of the pie- the entitlement programs and interest on the debt are the lion's share to begin with, and defense spending is most of what is left. Second, they don't plan to start this until 2011- after the Democrats are likely to have lost control of at least one house of Congress and Obama will be working his way out of office.

The politicians always want to start freezes later on, when somebody else has to make hard choices. Then they can claim "hey, I tried to be responsible, but that guy is a spendthrift/hard hearted bastard."

We're going to have to cut entitlements and defense if we're going to stand a chance at not defaulting on our debt. When we have a surplus, we're going to have to apply it to the debt. If we managed a $200 billion real surplus, we'd need to keep at it for 60 years to repay the $12t debt.

Yeah, never going to happen, no matter what tax code we use.

B_L said...

I could handle being Swiss or maybe a Luxembourger, but I don't think I've ever been "cool". A brutal paradox... I guess I just like guns, cheese, and fast cars.

Anonymous said...

not just no, but HELL NO! NO value added tax!! We are already taxed to death! May the person who is wanting this go straight to hell.

Anonymous said...

They forget this country was created from a violent tax revolt.

George said...

a. 'GRIDLOCK' aka Checks and Balances...

b. re: Anon (above)
A VIOLENT REVOLT over a 3% tax on tea...

Anonymous said...

A violent revolt over a 3% tax on tea...?

Hell, given the current situation, it's gonna be real ugly when everybody has finally had enough.

"Tar and feathers" will look pleasant by comparison. I am guessing something like "epoxy and razorblades", "duct tape and hand grenades" or "superglue and rabid badgers".

Long live the revolution!!!

Anonymous said...

Anon: that's change I can believe in.

jeff said...

alath said: The "only" problem is that any such adjustments would be extremely unpopular, and whichever party tried to implement them would be instantly voted out of office in favor of the other guys, who would be promising "The Moon! For Everbody! And Free!"

That. Look at the mess in Kalifornia for further verification.

FWIW, I could get into a VAT if we eliminated income tax. Or even better, don't let the Fed tax anyone directly. Leave taxation at the state/local level, and the individual states fund the Federal government.

Anonymous said...

Realistically, the only possible solution is to have massive budget and service cuts (very unlikely) and massive hyper inflation for a decade or so and just inflate our way out of the debt.

Thus instead of 2.50 a gallon gas and $30/1000 primers we can talk $20 a gallon gas and $300 primers but we will be debt free.

Unfortunately the government will not react until it is a crisis (like all good democracies) and then we will over-react.

Wise money is on inflation solving our problem. Plan ahead folks.