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The VAT..........what is it? .........Someone once told me that the definition of a compassionate liberal is a person who will give you the shirt off someone else's back. As America is facing record budget shortfalls and budget busting deficits something needs to be done and fairly soon. Cutting spending to a politician is not an option, and raising taxes will not get them elected. The latest strategy being talked about is the VAT (value added tax). OK 60minman what is that? sounds like a tax on the evil greedy rich doesn't it? Nope its a tax on all of us. Having lived in South Africa for 4 years they have a VAT. 14% to be exact. It simply means that everything is taxed at 14%. Every phase of production. If a furniture maker needs wood, fabrics and assembly materials (nails tacks glue etc. ) he will pay 14% on everything he buys to produce his furniture. When he sells you a piece of furniture you pay a VAT 14% to him. This might be hard for some to grasp but the manufacturer might pay his 14% but guess what he includes that cost in the price of the furniture he sells you. Instead of just paying 14% tax you are in essence paying 28%. Now the politician can say "I didn't raise your taxes" in fact the element of truth behind that statement is he did not as long as you didn't buy anything. I firmly believe the message for the mid term election will not be health care but will be about getting our fiscal house in order, jobs, and other economic concerns. If a VAT or similar tax is implemented it must be accompanied by spending cuts. Just remember a tax on business is a tax on you. With all the wool that politicians pull over our eyes things are beginning to look a little fuzzy. Its time we are told the truth and that time is now...... "The cause of America is in a great measure the cause of all mankind."....T. Paine |
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4/7/2010 7:02 pm |
ET...nothing was clarified. When a producer of goods cost increase for whatever reason that cost will be passed on to whomever bought those goods. All this mumbo jumbo is a smoke screen. Nobody produces anything at a loss unless its the Government. Surely thats not all that hard to understand the VAT taxes every stage of the production of goods...... "The cause of America is in a great measure the cause of all mankind."....T. Paine
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4/7/2010 7:07 pm |
Ms Joe because VAT is not a sales tax. What you have described is the "Fair Tax". That is what is needed but it would do away with the IRS politicians dont like that. They need a tax code to give their buddies tax breaks it buys them votes. "The cause of America is in a great measure the cause of all mankind."....T. Paine
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4/7/2010 7:08 pm |
If I remember correctly, a recent presidential candidate beloved by the right proposed scrapping income taxes and instituting a VAT instead. There are lots of advantages to a VAT. - Much more simple to administer than income tax. Think of the savings there. - It's fairer. The more you spend, the more you pay. The current taxation system allows avoidance in all sorts of ways. I should know. I've used every one available to me. - It taxes unreported income. Pimps will continue to buy luxury cars.
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4/7/2010 7:13 pm |
Sorry WeePee your explaination doesn't wash. You can sugar coat it all you want but the fact remains the consumer of anything produced pays all cost of production. "The cause of America is in a great measure the cause of all mankind."....T. Paine
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4/7/2010 7:14 pm |
Thank you Honey Bunz I was just getting ready to respond but you did a better job than I could have..... "The cause of America is in a great measure the cause of all mankind."....T. Paine
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As a citizen of a Germany which has the VAT-system for ages and I handeled it over years in my company - Miteehigh and WeePee1966 are right. All the prices are calculated on the netcosts. Than the VAT (value addet tax) is added depending on the sort of goods. Here we have 7% on staple food, medicin even books, and 19 % for all other items. A manufacturer or a wholesaler i.e. has to have a record of all VAT he paid and he received. The received VAT is in general higher than the paid. In his "cunsumption tax declaration" he is deducting the paid VAT from the received VAT and the difference is what he has to pay to the tax office. An Entrepreneur with high investments one will get money back if the paid VAT is higher than the received. To avoid taxdodgers, everone who starts a business has to apply for a VAT identification number. It is a very simple system. In the USA shopping for foreigners is a bit weird - reading a price, thinking it s ok, buying the good and get a shock at the cashiers - taxes are added and the price increased. Here and in a huge number of European Countries or Australia you pay what you see on the tag. Evergreen
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I agree with you Evergreen. What miteegreen was telling about Italy is correct. In Europe taxes are added on the price and pay what was written on the tag. With regards of services like photography, then you have to add 20% VAT to the amount. You make an invoice, so that the clients can deduct them in their income tax when they filed. So with me I found strange adding the VAT whatever you buy in the US. But I am in the US and it's Okey! By the way I live in Italy! Simplelady "The only way to have a friend is to be one."
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4/8/2010 4:13 am |
the higher the V.A.T. is the greater the black economy flurishes self employed trades people are automatcally 17.5% cheaper than companies offering the same service ( here in the u.k. ) plus there are vast amomilies like imported diamonds are only a half of one percent V.A.T gold coins like krugar rands are lower then gold jewellery why ?? be carefull with V.A.T is can destroy far more than it helps, Irelands republic staggers along with a massive 24% V.A.T. making cash inhand jobs even more attractive to unscrupulous trades people and a massive loss the the treasury ~ thousands of Irish people travel hundreds of miles into Northern Ireland where everything is half price or less compared to the republic
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4/8/2010 5:07 am |
Why do some people insist on posting so-called 'facts'? Truthiness is far more important than truth.
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4/8/2010 11:22 am |
Miteehigh....Boy your handle really fits you doesnt it. Now you call the most popular watched and listened to TV and radio networks "Right Wing" dwindling? Who told you that? Keith Olberman? Ed Shultz? You need to do some googling of your own, may I suggest the Nielsen ratings....... "The cause of America is in a great measure the cause of all mankind."....T. Paine
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4/12/2010 8:55 am |
60min: I'm comfortable that YOU, Sir, are correct... that VAT means that EVERY transaction is [will be] taxed.... and we know, darn well, that a tax in the manufacture/assemble/store/transport stages simply are added on to the end price that a consumer sees...... SOOOoooo, the net effect of VAT is that consumers pay MUCH more for goods. You are correct, as well, that politicians' claim of "... not increasing taxes..." is likely to be heard... and will be as specious then as it is now.....
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