Writer's Block: I'm the taxman, yeah!

[palsgraf_polka]

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I would like to see a VAT applied to every consumable. That way big corporations who have to buy tons of raw materials, equipment, etc have to pay taxes, because they sure as shit aren't paying them now.

That way, if you choose to spend more money, you choose to pay more taxes. I think it would be a better revnue generator than the stupid system we have now that is skirted by big corporations and rich people.

Comments

You've got my vote!

[arthur-sc-king.livejournal.com]

I wholeheartedly agree. Here are my rules for a VAT (based in part on watching the Canadian experience with the GST over the last two decades):

• No exemptions. Make it apply to Every. Single. Good. And. Service.* Well, OK, you can exempt used items (including not-newly-built houses).
  
• Figure out some reasonable figure for "how much you spend on the necessities of life per adult/per child, per month". Multiply that by the VAT rate. Send a cheque/direct deposit/debit card for that amount to every eligible adult and child every month. Don't bother means-testing it; it's easier if you just send it to everyone.
  
• Instead of a straight value-added tax, allow companies to deduct the tax they paid on their inputs. So, for example, imagine you buy $100 of materials, and then sell the finished product for $200. Imagine the tax rate is 10%. You paid $10 tax on the materials, and you collected $20 tax on the finished product. You send the difference of $10 in to the government, not the whole $20.
  
• Make damn sure it covers all imports, too.
  
• To implement it, bring it in at a low-ish rate (5-7%?). Reduce income tax rates at the same time, by an amount to make things either revenue-neutral or to collect just a bit more net revenue.
  
• Have a plan to slowly increase the VAT rate and to slowly decrease income tax rates at the same time. Whenever people bitch, remind them what you're doing. Also remind them that the IRS will shrink away to nothing (tax collection could be done almost entirely by the states and by the border guards).
  
• Make damn sure the paperwork's easy for small businesses. The last thing they want is more red tape.

There are a lot of really cool advantages to this approach, too:

• Some think it's "regressive". But with the credit to cover "necessities", it's not, really. Who spends more money (and will therefore pay more in taxes)? Yup, rich people.
  
• It'll encourage saving, 'cause you won't pay tax on interest income or dividend income or capital gains. You could also nuke the estate tax, too, while you're at it.
  
• Worried about illegal immigrants not paying taxes? Well, now they will, every time they buy something. But they won't get the "prebate" tax credit cheques every month, 'cause you'd have to prove your legal status here before you could get those cheques.
  
• Employers will be thrilled, 'cause their payrolls will get a lot easier.
  
• Everyone will be thrilled, 'cause they won't have to putz around with tax forms every April. (Sadly, H&R Block et al. will suffer badly from this. Can't make an omelet, etc. etc.)
  
• Even though buying everything will be more expensive, you'll have a lot more money in your pocket after payday.
  
• Corporations will pay their fair share, finally. No exemptions. You buy something, you pay the tax on it; you can deduct that from the taxes you collect when you sell your goods or services, but that's it. Exxon, if you sell $300G worth of oil in a year and spend $210G in non-payroll expenses to do so, you'll end up contributing $90G times whatever the rate is to the public treasury. That's probably a shitload more than what you're paying now.

Shit, I should just post this on my blog. %-) Sorry to take up so much room here, pp. %-)

ObFootnote: * When you see what bullshit the various exemptions to Canada's GST created ... oy! They try to distinguish between "groceries" (exempt) and "snack food" (taxable). For milk, they decided that a carton of 500 mL (about a pint) and smaller was "snack food", and larger cartons were "groceries". So Quebec dairies started selling 501 mL cartons. OMG.... And that's merely one of hundreds of examples.

[kittylitter1.livejournal.com]

fairtax.org FTW

[palsgraf-polka.livejournal.com]

Wow we actually agree on something fiscally! I hate it though that they openly support the teabaggers.

[jpallan.livejournal.com]

I think a VAT on all consumables would be a reasonable thing, as it would not punish people who are busy re-vamping the banking system by saving money.