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PoliGAF 2013 |OT1| Never mind, Wheeeeeeeeeeeeeeee

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Sorry, my mistake, I should've said "can only be justified using weird nebulous terms like "market distortions" and appealing to authority of foreign legislatures".

Can you defend VAT on its merits?

What you want to do is tax wealth right?
Marginal utility and all that shit, the problem is that taxing wealth is hard, but you try to get as close to it while being practical, and personally I think an income tax and an inheritance is all we really need (not 100% on property tax, it feel like a perfect system wouldn't need it but a realistic one would, but that's more of a hunch than rigorous analysis).
Yeah, you can through complicated rates and legislation kinda, sorta, get with that on VAT, but why fucking bother?
Even greatly designed VAT has a huge problem of avoidance, which mean that you reward the cheaters.

Really, is there one good reason outside political viability?
And if that the only reason, you need to ask yourself why that tax is viable, that should hint you about what type of tax we'll get if we go down that route.

A VAT is a sales tax that makes tax avoidance much harder compared to a standard sales tax (and changes how exports/imports are taxed).
 
Wouldnt a VAT basically solve all of this? We should just eliminate the corporate tax rate and institute a VAT

Companies like GE shouldn't be allowed to maintain zero liability for years on end because there's no significant economic benefit, but I wouldn't dramatically alter the effective rate being paid currently to the local, state, and, federal level due to how we choose to treat companies like them. Stephen Moore and others repeat we have the highest rate, but it of course is rarely that simple. The US government already looked into it.

http://assets.opencrs.com/rpts/R41743_20110331.pdf
 
And it's better than income tax because...?

I didn't say it is. Was only pointing out the "tax avoidance" part. It's pretty hard to avoid the VAT because of its setup where a sales tax is pretty easy for a small business to avoid.

There are pros and cons to both income and sales taxes. Remember, taxing income or consumption is really taxing the same thing - production. The only question is where the burden of the tax lies and the efficiency.

A VAT is more efficient as it tends to have less burdensome costs associated. The business submits the taxes, which are straightforward, and that's that. Income taxes reply on millions and millions of people doing their own taxes, tons of rules and loopholes and tax lawyers/accountants, etc.

However, a VAT is regressive and hurts those who make less and consume with more of their budget.


We could have a mixed VAT-income tax where we have a VAT on most consumer goods, exempting all food, medicine, education, and clothing (with exceptions for high end clothing stores), and then a progressive income tax on incomes over (random number) $75k.

There's lots of things we can do to be better than what we got now and a VAT can be part of the conversation.


TLS - I had that link ready to go too :p
 

Chichikov

Member
I didn't say it is. Was only pointing out the "tax avoidance" part. It's pretty hard to avoid the VAT because of its setup where a sales tax is pretty easy for a small business to avoid.

There are pros and cons to both income and sales taxes. Remember, taxing income or consumption is really taxing the same thing - production. The only question is where the burden of the tax lies and the efficiency.

A VAT is more efficient as it tends to have less burdensome costs associated. The business submits the taxes, which are straightforward, and that's that. Income taxes reply on millions and millions of people doing their own taxes, tons of rules and loopholes and tax lawyers/accountants, etc.

However, a VAT is regressive and hurts those who make less and consume with more of their budget.


We could have a mixed VAT-income tax where we have a VAT on most consumer goods, exempting all food, medicine, education, and clothing (with exceptions for high end clothing stores), and then a progressive income tax on incomes over (random number) $75k.

There's lots of things we can do to be better than what we got now and a VAT can be part of the conversation.


TLS - I had that link ready to go too :p
You see?
That what I mean when I say nebulous terms ;).
Maybe I'm just too stupid too get that, but the only real substantive argument in favor of VAT here seem to me (and please correct me if I'm wrong) -
A VAT is more efficient as it tends to have less burdensome costs associated. The business submits the taxes, which are straightforward, and that's that. Income taxes reply on millions and millions of people doing their own taxes, tons of rules and loopholes and tax lawyers/accountants, etc.
Two unrelated issues, we should simplify our income tax code, that's for sure, but we're going to have an income tax anyway, so you're adding VAT, that complication is commutative to the complication we get from income tax, right?
Or are you making the case that it's easier to make a return on lower rates?

What am I missing here?
It should be a pretty simple question to answer, right?
I think VAT is good because...?
And if you can't, maybe you should consider re-evaluating your positions.
No shame in that, I've changed my mind on bigger things.
 
You see?
That what I mean when I say nebulous terms ;).
Maybe I'm just too stupid too get that, but the only real substantive argument in favor of VAT here seem to me (and please correct me if I'm wrong) -

A. You're definitely not too stupid
B. That is correct, that's the argument. But there's only one argument for income taxes too (control the progressiveness). And both have cons.

What I'm trying to say is that taxing consumption or income is simply taxing production. They are two sides of the same coin. How you tax it is simply an efficiency vs progressiveness balance, nothing more. A better question is why are we taxing production to begin with. ;)

Two unrelated issues, we should simplify our income tax code, that's for sure, but we're going to have an income tax anyway, so you're adding VAT, that complication is commutative to the complication we get from income tax, right?
Or are you making the case that it's easier to make a return on lower rates?

It can reduce complication. Of course we need to simplify the tax code to begin with, but aside from that, a VAT is much easier to administer on say the bottom 60% of income earners. You take their burden of filing taxes away. You take the burden of withholdings from the employers away (and BTW, this increases the spending power in the present of those people since their cash isn't withheld).

What am I missing here?
It should be a pretty simple question to answer, right?
I think VAT is good because...?
And if you can't, maybe you should consider re-evaluating your positions.
No shame in that, I've changed my mind on bigger things.

I don't think a VAT is good and I don't think an income tax is good. But if we're going to tax production, replacing a portion of income taxes with a VAT could be better because it reduces burden of complicated filings on workers and employers, reduces enforcement costs, and thus increases efficiency in the economy which would benefit everywhere (there's less money going to waste and more to real productive sources which benefit everyone).

Now, I don't think a system based just on a VAT or sales tax is good and is by far the least desirable outcome of the three (income, VAT, or mixed). But I do think a small VAT coupled with a simple but progressive income tax (this includes cap gains/dividends/etc) is probably the best option if we must tax production. And of course I would not endorse any switch of a portion of income taxes onto a VAT that shifts the tax burden onto lower and middle incomes, which is why I would exempt things like food, medicine, most clothing and stuff from the VAT.

Whether you tax income or production, you're distorting the market. One is just the price of goods and services, the other is wages and benefits.

FTR, I would endorse any system at this point which reduces the taxes paid by the bottom 60% (possibly as high at 80%) of income earners (defined by all forms of income) and raises taxes on the top 10%, especially the top 1% at this point, efficiency be damned.


edit: A better way of saying this is a VAT would be fine if we had honorable people devising it. In this country at this time? I wouldn't touch it. I guarantee any sales tax devised is meant to fuck over the bottom 60-80% of income earners, ala Bobby Jindal.
 
That's totally the first bad thing England had ever done.

Generally speaking, you pick a region in the world in random, good odds the british fucked it up at some point in history.
You know the sun never settle and all that crap.


Whoever claim the west has moral superiority had not read history books.
Yeah someone wrote a book on this. Basically there only 22 countries never touched by British miltary power in some way or another.
All the Countries We've Ever Invaded: And the Few We Never Got Round To
http://mentalfloss.com/article/13019/there-are-only-22-countries-world-british-haven’t-invaded

And one of the countries was Mali . . . I think the Brits participated in a small way in that recent military action so it is now down to 21!
 
63564_500567083312306_155723715_n.jpg
 

Jackben

bitch I'm taking calls.
I almost embarrassed myself in here by asking why no one is talking about the GMO protection bill thing until I read up on it more and got the full story. It's really easy to get mislead with stuff like this as people (myself included) don't often have a clear understanding of GMOs.
 

gcubed

Member
Secret McConnell recordings on how to destroy Ashley Judd? Say it ain't SO!

http://nymag.com/daily/intelligencer/2013/04/mitch-mcconnell-ashley-judd-secret-recordings.html

When aides take the floor, they describe Judd's life as "a haystack of needles, just because truly, there's such a wealth of material," including her mental health:
She's clearly, this sounds extreme, but she is emotionally unbalanced. I mean it's been documented. Jesse can go in chapter and verse from her autobiography about, you know, she's suffered some suicidal tendencies. She was hospitalized for 42 days when she had a mental breakdown in the '90s.
...
They go on:
She is critical … of traditional Christianity. She sort of views it as sort of a vestige of patriarchy. She says Christianity gives a God like a man, presented and discussed exclusively with male imagery, which legitimizes and seals male power, the intention to dominate even if that intention is nowhere visible. […]
I think too she's clearly sort of anti-sort-of-traditional American family. […] She described having children as selfish, and she thinks it's unconscionable to breed … She also is critical of, of fathers giving away their daughters in marriage ceremonies. She says it's a common vestige of male dominion over a women's reproductive status when her father gives her away at a wedding.
 

Mike M

Nick N
I almost embarrassed myself in here by asking why no one is talking about the GMO protection bill thing until I read up on it more and got the full story. It's really easy to get mislead with stuff like this as people (myself included) don't often have a clear understanding of GMOs.

Anyone seeking to avoid eating genetically modified food has a tough row hoe. Mankind has been eating genetically modified food since the invention of agriculture.
 

Chichikov

Member
A. You're definitely not too stupid
B. That is correct, that's the argument. But there's only one argument for income taxes too (control the progressiveness). And both have cons.

What I'm trying to say is that taxing consumption or income is simply taxing production. They are two sides of the same coin. How you tax it is simply an efficiency vs progressiveness balance, nothing more. A better question is why are we taxing production to begin with. ;)
I don't want to sound like a dick, but once again you're explaining to me what VAT is, instead of explaining to me why a system that includes VAT and income tax is a better than a system that includes only income tax.
Come on, how hard of an answer can that be?

It can reduce complication. Of course we need to simplify the tax code to begin with, but aside from that, a VAT is much easier to administer on say the bottom 60% of income earners. You take their burden of filing taxes away. You take the burden of withholdings from the employers away (and BTW, this increases the spending power in the present of those people since their cash isn't withheld).
How?
Seriously, explain it to me in small words because I don't get it.
The way I see it we currently have a system that require you to pay income taxes, you suggest a system that on top of income taxes will make you pay VAT, how is your system simpler?
The complication in the income tax is the same, and mine don't have VAT, what am I missing here?
How does introducing VAT simplify our income tax code?

Now, I don't think a system based just on a VAT or sales tax is good and is by far the least desirable outcome of the three (income, VAT, or mixed). But I do think a small VAT coupled with a simple but progressive income tax (this includes cap gains/dividends/etc) is probably the best option if we must tax production. And of course I would not endorse any switch of a portion of income taxes onto a VAT that shifts the tax burden onto lower and middle incomes, which is why I would exempt things like food, medicine, most clothing and stuff from the VAT.

Whether you tax income or production, you're distorting the market. One is just the price of goods and services, the other is wages and benefits.

FTR, I would endorse any system at this point which reduces the taxes paid by the bottom 60% (possibly as high at 80%) of income earners (defined by all forms of income) and raises taxes on the top 10%, especially the top 1% at this point, efficiency be damned.


edit: A better way of saying this is a VAT would be fine if we had honorable people devising it. In this country at this time? I wouldn't touch it. I guarantee any sales tax devised is meant to fuck over the bottom 60-80% of income earners, ala Bobby Jindal.
Why?
Seriously, why do you think that's the best system?
I can show you the drawbacks of VAT, fuck, you pointed them out yourself, what's the benefits?
 

gcubed

Member
i think VAT can be used as a psychological barrier. Not sure how much it simplifies taxes, as you would assume that under a certain percentage is eligible for a refund?

VAT can be used as a consumption tax on higher income earners, without having to have a higher income tax rate. Again, i think mostly psychological way to get more money out of certain income levels.
 

Chichikov

Member
i think VAT can be used as a psychological barrier. Not sure how much it simplifies taxes, as you would assume that under a certain percentage is eligible for a refund?

VAT can be used as a consumption tax on higher income earners, without having to have a higher income tax rate. Again, i think mostly psychological way to get more money out of certain income levels.
Isn't that a nice way of saying "we can change the tax code and people wouldn't really notice"?
Because I don't think that's a worthy reason in a democracy.
 

Chichikov

Member
it most definitely is exactly that.

Are we talking ideal or reality?
Reality.
But now you need to ask yourself, why is VAT easier politically?
It's easier politically because people think the GOP won't oppose it (or won't oppose it so forcefully).
And now you need to ask yourself why the GOP wouldn't oppose it.

I think we're always going to come back to the fact that it's regressive by nature, I don't like that reason, but at least I can understand it, everything else goes over my head.

The simplification argument sounds like a bait and switch to me, exactly the same tactic that flat tax proponents use.
 

Leunam

Member
I almost embarrassed myself in here by asking why no one is talking about the GMO protection bill thing until I read up on it more and got the full story. It's really easy to get mislead with stuff like this as people (myself included) don't often have a clear understanding of GMOs.

Is this also the case with that trade thing that was said would give companies the power to sue countries? That thread didn't get a whole lot of traction.
 

gcubed

Member
Reality.
But now you need to ask yourself, why is VAT easier politically?
It's easier politically because people think the GOP won't oppose it (or won't oppose it so forcefully).
And now you need to ask yourself why the GOP wouldn't oppose it.

I think we're always going to come back to the fact that it's regressive by nature, I don't like that reason, but at least I can understand it, everything else goes over my head.

The simplification argument sounds like a bait and switch to me, exactly the same tactic that flat tax proponents use.

its easier politically because it can be seen as regressive. Yes. Although you can allow for refunds on lower income filers.

I think the first thing that needs to happen is to clear out the tax system. Keep progressive rates in place, remove just about all deductions, count all earned income (payroll, stocks, etc) the same, re-adjust the rates to keep the average tax bill the same. It removes a lot of the IRS, it removes uncertainty. I make $x, i will owe $y. It removes ways to cheat the system. Next step would be to do the same thing for our corporate tax rate. Remove the boogeyman argument about how high our corporate taxes are by clearing out loopholes and bullshit deductions, and lowering the rate to 18% or so. Have companies ACTUALLY PAY 18%.

This shit will never happen though.
 

Chichikov

Member
its easier politically because it can be seen as regressive. Yes. Although you can allow for refunds on lower income filers.
Wait, I thought we're talking about reality here.
We can trick poor people into supporting regressive taxation, but I'm sure as hell you can't trick rich anti-tax people into supporting progressive one.

It's just seem weird to me, we're effectively saying - we can't raise the taxes on the rich in a system which is inherently progressive, let's try on a system which is inherently regressive (and that's without talking about the other problems VAT has).

I'm still waiting for a simple explanation as to why it's preferable to a system that has only income tax.
 

Link

The Autumn Wind
While I'm glad Judd isn't ultimately running, I wish she'd have let the GOP think she was for a while longer. We could have gotten a lot of golden material from McConnell.
 

pigeon

Banned
Wait, I thought we're talking about reality here.
We can trick poor people into supporting regressive taxation, but I'm sure as hell you can't trick rich anti-tax people into supporting progressive one.

It's just seem weird to me, we're effectively saying - we can't raise the taxes on the rich in a system which is inherently progressive, let's try on a system which is inherently regressive (and that's without talking about the other problems VAT has).

I'm still waiting for a simple explanation as to why it's preferable to a system that has only income tax.

I'm not sure this is directly relevant, but I feel like it's worth noting -- compared to the rest of the world, taxes on the rich are actually surprisingly high in America.

international_tax_progressivity.png


wapo said:
Our top 10 percent gets a bigger slice to start, but it also pays a much higher share of the tax burden than the upper classes in other countries do. In Sweden, generally considered the most economically egalitarian country on the planet, the rich pay taxes that are more or less exactly their share of income. These numbers are a little dated, coming as they do from a 2008 OECD report, but the point stands.

Now, where this gets interesting is when you take transfers — that is, stuff like Social Security, Medicare/Medicaid, food stamps, the Earned Income Tax Credit, and other government programs designed to improve people’s standards of living — into account. Those programs, like progressive taxes, reduce inequality relative to what it would be without them. But some reduce it more than others. And even though the United States has the most progressive tax system in the world, its overall tax and transfer system reduces inequality less than those in peer countries do:

international_inequality_reductions.png


http://www.washingtonpost.com/blogs...-the-world-its-government-is-among-the-least/

This might explain some of the issues in this discussion. One reason that it's politically tough at this point to keep raising taxes on the rich is that they're actually paying a lot of taxes! The problem we have isn't a tax problem, it's a social program problem, because social programs can be a lot more efficient at reducing inequality than taxation. I don't think you can usefully consider the question of tax progressivity without coupling it with transfers.
 

gcubed

Member
is it even a social program problem or is it more specifically a healthcare problem (yes, its a social program, but it is a specific one)
 

Chichikov

Member
I'm not sure this is directly relevant, but I feel like it's worth noting -- compared to the rest of the world, taxes on the rich are actually surprisingly high in America.
Me neither, for real, I'm not going to accept anymore applications for the VAT defender position unless your post start with "I think a VAT and income tax system is preferable to an income tax system because...".
;)


I would however would like to call out that the "share of the tax burden" is a bad metric because it (intentionally) combine tax rates and income distribution.
I think it's much more useful to talk about the two separately, because otherwise, a rise in inequality can look like an increase in tax code progressiveness, and in practice, that measure is usually used to mask the reason why inequality rose, which more often than not is the tax code becoming less progressive.
 
I'm not sure this is directly relevant, but I feel like it's worth noting -- compared to the rest of the world, taxes on the rich are actually surprisingly high in America.

...

http://www.washingtonpost.com/blogs...-the-world-its-government-is-among-the-least/

This might explain some of the issues in this discussion. One reason that it's politically tough at this point to keep raising taxes on the rich is that they're actually paying a lot of taxes! The problem we have isn't a tax problem, it's a social program problem, because social programs can be a lot more efficient at reducing inequality than taxation. I don't think you can usefully consider the question of tax progressivity without coupling it with transfers.

They pay a large share of the tax burden because they have most of the income. And I'm not sure looking at this in terms of deciles is all that helpful, given that most of the income is concentrated in the top 1%, and even the top 0.1% would probably be much more helpful to look at.

I'm admittedly not sure how helpful looking at redistribution in terms of Gini is. Something seems off about the data. For example, below is a graph reflecting pre-tax income shares of the top 1% for various countries:

C1QaxIi.jpg


http://observatorio-das-desigualdades.cies.iscte.pt/index.jsp?page=indicators&lang=en&id=230

The US clearly has more severe pre-tax inequality issues than other countries.
 
If you remember Saxby Chambliss's argument against gay marriage:
Sen. Saxby Chambliss (R-GA) said:
“I’m not gay. So I’m not going to marry one.”
Another Georgia luminary today has developed a compelling argument against covering trans health care:
Rep Paul Broun (R-GA) said:
"I don’t want to pay for a sex change operation. I’m not interested. I like being a boy."
And Rob Portman's same-sex marriage reversal:
Sen. Rob Portman (R-Ohio) said:
"It allowed me to think of this issue from a new perspective, and that's of a Dad who loves his son a lot and wants him to have the same opportunities that his brother and sister would have -- to have a relationship like Jane and I have had for over 26 years."
All of this stuff, on top of the I'm-not-a-woman or I'm-not-a-slut Republican arguments against various women's health care issues too numerous to name, I mean - I just don't understand how it's not obvious to them how selfish and narrow-minded they all are, and that they don't represent themselves, they represent actual real other people. How do they not take these stupid arguments they make and extend them to, like, "Well I'm never going to eat sushi so I don't think the FDA should try to ensure its safety?" How do they figure out where to draw the lines around "my issues" and "other people's issues" to start making decisions using a system like this? Sorry to interrupt the tax talk, I just saw that new bit on ThinkProgress just now and had to take a few minutes to marvel at the absurdity of a lot of our politicians. Blech.
 
I really liked MHP response to the brouhaha over her "it takes a village ad"

http://tv.msnbc.com/2013/04/09/why-caring-for-children-is-not-just-a-parents-job/

When the flood of vitriolic responses to the ad began, my first reaction was relief. I had spent the entire day grading papers and was relieved that since these children were not my responsibility, I could simply mail the students’ papers to their moms and dads to grade! But of course, that is a ridiculous notion. As a teacher, I have unique responsibilities to the students in my classroom at Tulane University, and I embrace those responsibilities. It is why I love my job.

Then I started asking myself where did I learn this lesson about our collective responsibility to children. So many answers quickly became evident.

I learned it from my mother who, long after her own kids were teens, volunteered on the non profit boards of day care centers that served under-resourced children.

I learned it from my father who, despite a demanding career and a large family of his own, always coached boys’ basketball teams in our town.

I learned it from my third-grade public school teacher, who gave me creative extra work and opened up her classroom to me after school so that I wouldn’t get bored and get in trouble.

I learned it from the men who volunteered as crossing guards in my neighborhood even if they don’t have kids in the schools.

I learned it from the conservative, Republican moms at my daughter’s elementary school, who gave her a ride home every day while I was recovering from surgery.

I learned it watching the parents of Newtown and Chicago as they call for gun control legislation to protect all the children of our communities.

I learn it from my elderly neighbors who never complain about paying property taxes that support our schools, even if they have no children in the schools today.

And I have learned it from other, more surprising sources as well. I find very little common ground with former President George W. Bush, but I certainly agree that no child should be left behind. And while I disagree with the policies he implemented under that banner, I wholeheartedly support his belief that we have a collective national interest in all children doing well.

I’ll even admit that despite being an unwavering advocate for women’s reproductive rights, I have learned this lesson from some of my most sincere, ethically motivated, pro-life colleagues. Those people who truly believe that the potential life inherent in a fetus is equivalent to the actualized life of an infant have argued that the community has a distinct interest in children no matter what the mother’s and father’s interests or needs. So while we come down on different sides of the choice issue, we agree that kids are not the property of their parents. Their lives matter to all of us.

I believe wholeheartedly, and without apology, that we have a collective responsibility to the children of our communities even if we did not conceive and bear them. Of course, parents can and should raise their children with their own values. But they should be able to do so in a community that provides safe places to play, quality food to eat, terrific schools to attend, and economic opportunities to support them. No individual household can do that alone. We have to build that world together.
 

pigeon

Banned
According to Beutler's twitter, Reid's going to file cloture on the gun bill tonight, and Obama's going to nominate three more judges to the DC circuit. Open question whether Reid thinks he can break the filibuster, or whether the plan is to run into the wall specifically to demonstrate the "unreasonableness" of the GOP so that he can justify some kind of nuclear option -- and whether anything will actually happen at that point. Reid certainly seems to think that he could've passed the filibuster reform if he'd backed it, given that he thinks he can pass it NOW in the middle of a session. We'll have to see.
 

gcubed

Member
According to Beutler's twitter, Reid's going to file cloture on the gun bill tonight, and Obama's going to nominate three more judges to the DC circuit. Open question whether Reid thinks he can break the filibuster, or whether the plan is to run into the wall specifically to demonstrate the "unreasonableness" of the GOP so that he can justify some kind of nuclear option -- and whether anything will actually happen at that point. Reid certainly seems to think that he could've passed the filibuster reform if he'd backed it, given that he thinks he can pass it NOW in the middle of a session. We'll have to see.

I think no one outside of the beltway has any faith in Reid at the moment, and those in it ignore him
 
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