Thread: Senator Conrad wants VAT TAX (like Europe has)

Today on Neil Cavuto discussed how Sen Kent Conrad from North Dakota is on the Senate Floor wanting to begin discussions on adding a Federal "Value Added Tax" across the country of 20 to 25% on all goods sold, from groceries to cars to houses....... like Europe does.

I immediately called Sen Conrads Washington office and let them have it. I travel to europe / London all the time on business and let me tell you the VAT is huge and no one knows the real cost of goods because everything is so overpriced.

Please call Sen Conrads office and let them know you don't want a VAT tax!

Senator Kent Conrad
530 Hart Senate Office Building
United States Senate
Washington, DC 20510-3403
Phone: (202) 224-2043
Fax: (202) 224-7776
Online: http://conrad.senate.gov/contact
E-mail: https://conrad.senate.gov/contact/webform.cfm

Actually if they eliminated income taxes (and loopholes) and the VAT was only about 10%, it would be much better than the current system.

National Sales Tax Gets Fresh Look
Washington Post: Once Considered Unthinkable, Some Now View A U.S. VAT As A Way to Reduce Deficits, Fund Health Reform
Comments 14
May 27, 2009

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families.

Liberals dispute that notion. "You could pay for it regressively and have people at the bottom come out better off -- maybe. Or you could pay for it progressively and they'd come out a lot better off," said Bob McIntyre, director of the nonprofit Citizens for Tax Justice, which has a health financing plan that targets corporations and the rich.

A White House official said a VAT is "unlikely to be in the mix" as a means to pay for health-care reform. "While we do not want to rule any credible idea in or out as we discuss the way forward with Congress, the VAT tax, in particular, is popular with academics but highly controversial with policymakers," said Kenneth Baer, a spokesman for White House Budget Director Peter Orszag.

Still, Orszag has hired a prominent VAT advocate to advise him on health care: Ezekiel Emanuel, brother of White House chief of staff Rahm Emanuel and author of the 2008 book "Health Care, Guaranteed." Meanwhile, former Federal Reserve chairman Paul A. Volcker, chairman of a task force Obama assigned to study the tax system, has expressed at least tentative support for a VAT.

"Everybody who understands our long-term budget problems understands we're going to need a new source of revenue, and a VAT is an obvious candidate," said Leonard Burman, co-director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, who testified on Capitol Hill this month about his own VAT plan. "It's common to the rest of the world, and we don't have it."

Seeking New Revenue

The surge of interest in a VAT is testament to the extraordinary depth of the nation's money troubles. While some conservatives have long argued that a consumption tax would provide a simpler and more efficient alternative to the byzantine U.S. income tax code, this time it's all about the money.

The federal budget deficit is projected to approach $1.3 trillion next year, the highest ever except for this year, when the deficit is forecast to exceed $1.8 trillion. The Treasury is borrowing 46 cents of every dollar it spends, largely from China and other foreign creditors, who are growing increasingly uneasy about the security of their investments. Unless Congress comes up with some serious cash, expanding the nation's health-care system will only add to the problem.

Obama wants to raise income taxes for high earners and impose new levies on business, but those moves would not generate enough cash to cover the cost of health care, much less balance the budget, and they have not been fully embraced by Congress. Obama's plan to tax greenhouse-gas emissions could raise trillions of dollars, but again, Congress is balking.

Key lawmakers are considering other ways to pay for health reform, including new taxes on sugary soda, alcohol and employer-provided health insurance. The last proposal could raise a lot of money -- nearly $1 trillion over the next five years, according to White House budget documents. But options on the table would raise a fraction of that sum. And while it might pay for health care, it would barely dent deficits projected to total nearly $4 trillion over the next five years and to grow rapidly in the future, as baby boomers draw on Social Security and Medicare.

Enter the VAT, one of the world's most popular taxes, in use in more than 130 countries. Among industrialized nations, rates range from 5 percent in Japan to 25 percent in Hungary and in parts of Scandinavia. A 21 percent VAT has permitted Ireland to attract investment by lowering its corporate tax rate.

The VAT has advantages: Because producers, wholesalers and retailers are each required to record their transactions and pay a portion of the VAT, the tax is hard to dodge. It punishes spending rather than savings, which the administration hopes to encourage. And the threat of a VAT could pull the country out of recession, some economists argue, by hurrying consumers to the mall before the tax hits.

A VAT's Bottom Line

What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, "100 Million Unnecessary Returns," Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 -- about 90 percent of households -- from the income tax and would lower rates for everyone else.

And in a paper published last month in the Virginia Tax Review, Burman suggests that a 25 percent VAT could do it all: Pay for health-care reform, balance the federal budget and exempt millions of families from the income tax while slashing the top rate to 25 percent. A gallon of milk would jump from $3.69 to $4.61, and a $5,000 bathroom renovation would suddenly cost $6,250, but the nation's debt would stabilize and everybody could see a doctor.

Sales Tax Gains Momentum

Burman, who helped House Democrats craft an unsuccessful 2007 plan to repeal the alternative minimum tax, said he's received a number of phone calls from lawmakers interested in his idea, though "they can't quite imagine how to make it happen politically." Burman said the 25 percent rate has caused some sticker shock, and he's trying to figure out how to bring it down.

Graetz's proposal drew an endorsement from Volcker, who last year called it "a sensible plan for reform." (Volcker did not respond to a request for comment.) It also has piqued the interest of Conrad, the Senate Budget Committee chairman who argues that it could be modified to accommodate Obama's pledge not to raise taxes on families who make less than $200,000 a year.

"I think interest is quietly picking up," Graetz said. "People are beginning to recognize that the mathematics of the current system are just unsustainable. You have to do something. And a VAT has got to be on the table if you want to do something big and serious."

Still, the Senate Finance Committee declined to include a VAT among the options it is considering to pay for health reform. And even VAT supporters doubt the tax will find a place among the tax-reform proposals the Volcker panel has been asked to produce by Dec. 4.

Though the nation's fiscal outlook is grim, Burman said "the situation will have to get more desperate" before lawmakers are likely to consider a new levy aimed directly at the pocketbooks of every one of their constituents.

Most lawmakers are still looking for "a painless source of revenue" to overhaul the health-care system and dig the nation out of debt, Burman said. "Who knows?" he added. "Maybe the tooth fairy will bring that to them."


By Washington Post Staff Writer Lori Montgomery
© 2009 The Washington Post Company

http://www.cbsnews.com/stories/2009/05/ ... ss_5044392

The VAT tax in Europe is more like an additional FEDERAL Tax.
It is mandatory and put on anything that is sold.
It might have started out smaller like 8% or 10%, much like our different states sales taxes, but has now grown to an average of 20% to 25%.

This would not be in stead of income tax but would be looked at like an additional sales tax.

Also look at the reason why they want the tax, because they want to fund universal health care. Well I can tell you here in CA we provide free health care to milliions (and I think the number is way above the 3 million they now state) of illegal aliens.

I ask you when did it become the responsiblility of American Citizens to pay for free education, free health care, free food stamps, free welfare, of foreigners who illegally break into our country against our Federal law?

I think all Americans should sue the Federal government for services not rendered due to our hard earned money going to foreigners who are Federal law breakers.

Trust me - you do not want this VAT tax. It is huge and it inflates the cost of everything you buy. Whatever you thought milk, or eggs, or bread was - well guess what you are wrong and it is much more.

Think of it like the new higher tax on cigerettes, but on everything. Try adding 20% to 25% to the cost of a car? a TV? an IPOD? a Phone.

It takes the very hard working British and makes them "equal" with the poor, to tired to work, I want to stay home and watch TV group.

I would rather do without or take our money back from illegal aliens (over 13 billion in CA alone) then add a VAT tax.

This is NOT what our founding fathers wanted or they would have stayed in England.


"The American people will never knowingly adopt Socialism. But under
the name of 'liberalism' they will adopt every fragment of the Socialist
program, until one day America will be a Socialist nation, without
knowing how it happened."


by: Norman Thomas
(1884-196 six-time U.S. Presidential candidate for the Socialist Party of America
Source: 1948 - from an interview during the presidential campaign,

[Ed. note: Norman Thomas and Gus Hall, the U.S. Communist Party
Candidate, both quit American politics, agreeing that the Republican
and Democratic parties by 1970 had adopted every plank on the
Communist/Socialist and they no longer had an alternate party platform
on which to run.]

Moved to other topic's...

I lived in England while in the military. VAT (value added tax) is a pain in the butt and is expensive

What about a luxury tax only? And raise the $200,000 income cap on Social Security taxes for the wealthy!