If we implemented a VAT, would drug dealers start to pay their fair share? (Ron Paul, generation)
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If we cut the federal income tax to a minimal flat rate - and replaced it with a VAT - do you think it would bring in money from the drug dealers that do not report their income? The VAT would be a tax on consumption, and drug dealers have to consume too They could pay their fair share. Would it represent a financial windfall for the government, or are we just talking small peanuts?
I think that a VAT is the fairest way to tax people as it would force everyone in the "underground economy" to pay their fair share. Here are the major problems I see with this issue.
1. There needs to be some kind of subsidy for lower income peopls.
2. This tax would be grossly unfair to seiniors who had paid income tax their entire lives only to have all of their savings taxed again as they spent it.
I think that a VAT is the fairest way to tax people as it would force everyone in the "underground economy" to pay their fair share. Here are the major problems I see with this issue.
1. There needs to be some kind of subsidy for lower income peopls.
2. This tax would be grossly unfair to seiniors who had paid income tax their entire lives only to have all of their savings taxed again as they spent it.
1. There needs to be some kind of subsidy for lower income peopls.
Check out the FairTax, they have some type of prebate that goes up to a certain amount.
Quote:
Originally Posted by KYBob
2. This tax would be grossly unfair to seiniors who had paid income tax their entire lives only to have all of their savings taxed again as they spent it.
This is a very valid point, probably one of the biggest problems with introducing a VAT.
In most countries outside of the US, VAT is sales tax at about a rate of 15%. How is extra sales tax a windfall for the gov't?
Well the way it is going, our economy is supposedly based on consumption, but as the new generation's purchasing power severly declines and the middle class is eroded away, we will consume less (to level of consumption similar to Europe), so I guess revenues from any type of consumption tax would not make much of a difference.
Of course, if we opened the borders completely and combined currencies to make the Amero, maybe that would stimulate consumption.
Then a consumption tax would be a valid replacement for income tax.
I think we should scrap the taxes on investment and business and move to vat/sales tax.
as I said previously, the drop in consumption by the eroding middle class would not necessarily result in increased revenue...
in fact subsidy needs will increase as the middle class becomes poorer and more seniors are living longer
if we devalued the currency further and made our exports more competitive, we might be able to outsource a portion of the VAT to those countries who buy our products, like Germany does it...
the only clear solution I see under a Status Quo (Non-Ron Paul) administration is to create the North American Union, strengthen our currency with MXN and CAD, create the Amero, and open the borders.
To keep track of everyone, we would then institute a VAT/Consumption tax. Income tax would be difficult to continue to implement
Rock Hudson Perry would help get us there, so would Obamachange.
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