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And ultimately the end consumer pays for the whole thing. The medicine just doesn't taste as bad because instead of having to add the sales tax to the price where the consumer can SEE it (at the point of sale), it is concealed within the sales price itself so the consumer just thinks "DAYUM this pair of pants is expensive!"
No thanks.
Unlike other tax method’s, intermediate VAT transactions contain ABSOLUTELY NO HIDDEN sales taxes imbedded within intermediate or final sales transactions.
How does it not? First transaction: base price + tax = new price.
Second transaction: new price + tax = new new price.
The second transaction has hidden the tax from the first transaction.
Doesn't that assume that the sellers won't raise the price in response to the tax?
Value Added Tax, (VAT) is a sales tax administration method. Of all sales tax methods I’m aware of, VAT’s the least intrusive, the most amiable to businesses and least susceptible to evasion or fraud. No other sales tax administration method is less expensive (to administer) or less invasive than VAT.
Similar to other sales tax methods, Vat authorizes qualified sellers to collect the tax on behalf of the government; BUT the sellers immediately deduct any VAT they have previously paid for their own purchases BEFORE they pass on only the difference to the government.
Unlike other tax method’s, intermediate VAT transactions contain ABSOLUTELY NO HIDDEN sales taxes imbedded within intermediate or final sales transactions.
The total explicitly itemized sales tax paid by any purchaser within any individual link of the chain of sales transactions is always the government’s entire tax revenues thus far paid within that chain. This remains true from the first to the last transaction link of the chain.
[This is particularly advantageous for a nation’s exports. Nation's do not want to increase their exports' gross prices. They all (I believe) waive any explicitly itemized taxes within their export transactions].
Because VAT has no hidden sales taxes, government’s total revenues derived from any given tax rate is less than that of other sales tax methods. It is exactly the rate explicitly specified written within the tax law.
Respectfully, Supposn
Doesn't that assume that the sellers won't raise the price in response to the tax?
ImageP, I cannot reply with a single response to your message; it deals with too many topics. You do not accept my contention of VAT’s superiority to other methods of general sales taxes? You do not accept the economic benefits of taxing consumption rather than taxing income? You're concerned about our global trade policies?
[There are some degrees of relationships between all of these topics but they are at least worthy of discussion within their own individual messages. I’m of the opinion that they’re worthy of their own discussion threads].
Concerning USA’s trade policy, I posted a topic entitled [“Trade deficits are always detrimental to the GDP” on May 15, 2010]; and another entitled [“Buffett’s concept; an economic stimulus at no expense” that was posted on November 20, 2009, or you could google “ wikipedia, import certificates “.
Respectfully, Supposn
ImageP, there’s no point to our discussing VAT’s superiority to other methods of general sales taxes if you do not accept the economic benefits of taxing consumption rather than taxing income.
Respectfully, Supposn
........ (investements) is exempt from income tax and is taxed at the lower rate which we call "capital gains". Why in the world do we tax people who work real jobs at a rate higher than we tax profits made from PASSIVE investments? Why does Warren Buffet pay a smaller percent of his income as taxes than ANY of his employees?
However I do see our work tax as being something different than an income tax. Income tax by its very name indicates that one would have to pay taxes on all ones income. However income which is derived by not working (investements) is exempt from income tax and is taxed at the lower rate which we call "capital gains". Why in the world do we tax people who work real jobs at a rate higher than we tax profits made from PASSIVE investments? Why does Warren Buffet pay a smaller percent of his income as taxes than ANY of his employees? That is totally ludicris.
Of course we all know the real reason - its because powerful people make our tax code, powerful people tend to be powerful because they are rich, rich people tend to own lots of passive investments - so the entire system is a scam to benefit the rich. People who self identify themselves as conservatives buy the scam hook line and sinker, even those who are harmed by it.
We shouldn't tax capital gains at all. And you completely mischaracterize investment. We want investment, it is a good thing. It gives good companies the opportunity to expand and we all benefit by it (more production yields lower prices).
And ultimately the end consumer pays for the whole thing. The medicine just doesn't taste as bad because instead of having to add the sales tax to the price where the consumer can SEE it (at the point of sale), it is concealed within the sales price itself so the consumer just thinks "DAYUM this pair of pants is expensive!"
No thanks.
OK then. Please explain why it is ok to tax income that we actually have to earn but it is not ok to tax income that fat rich people get for sitting on their but while the stock market investments that they inherited (as in DID NOT EARN) are not taxed.
At this particular spot in time, we actually dont need any more investment. We have manufacturing that is only operating at 60% capacity. We have empty houses and empty commercial properties througout the country. In my own business, I have equipment that used to be used 8+ hours a day that is now only being used for a couple hours a day (due to lack of product demand due to the lack of consumption which is the root cause of our recession). More investment is absolutely not needed. What we need is for investors to start spending (consumption). Without an increase in consumption the we will not have an increase in manufacturing and services demand and without demand we have no need for further investment.
Instead, Americans buy stuff they don't need, with money they don't have, to impress people they don't even like.
We shouldn't tax capital gains at all.QUOTE]
Phattonez, I’m opposed to special strokes for special folks. I’m an advocate of free enterprise. Entrepreneurs should determine their investments by considering the open market’s rewards and penalties.
I have little patience with those who describe themselves as “conservatives” and only seek special tax consideration for THEIR particular source of income.
Refer to my topic thread “the capital gains tax discount is unjustified”.
Respectfully, Supposn
We shouldn't tax capital gains at all. And you completely mischaracterize investment. We want investment, it is a good thing. It gives good companies the opportunity to expand and we all benefit by it (more production yields lower prices).
let me also just say as well. In order for us to shrink our deficit we will need a higher income tax on the wealthy(in my mind) at least for a little bit of time. After the deficit is reduced both the VAT and the income tax can be lowered but set to maintain a balanced budget.A value-added tax will:
Lower our massive deficit
Tax consumption rather than taxing even more of people's income
Will help cover giant increases in government spending
Encourages savings and investing which leads to a natural job growth, rather than one which is forced by government bills
Incentive for individuals to work harder
Hurts people who make money "illegally" because they will still be taxed when they spend.
Sounds like a great idea to me
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