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Should the Federal Govt. implement a Value Added Tax (VAT)?

Should the Federal Govt. implement a Value Added Tax (VAT)?


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JANFU

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Should the Federal Govt. implement a Value Added Tax (VAT)?
A consumption tax, more you consume more you pay, a fair tax?
Massive deficits – massive debt – the fairest tax of all
Value-added tax - Wikipedia, the free encyclopedia

A value-added tax (VAT) or also General Sales tax (GST) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs
The value added to a product by or with a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs. A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.

State and Local Sales Tax Rates in 2014 | Tax Foundation
 
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I'm generally against the idea, but if it were to REPLACE most of the taxes we have now I'd consider it.

If it were just added to the already long list we have, then I'd be absolutely against it.
 
Should the Federal Govt. implement a Value Added Tax (VAT)?
A consumption tax, more you consume more you pay, a fair tax?
Massive deficits – massive debt – the fairest tax of all
Value-added tax - Wikipedia, the free encyclopedia



State and Local Sales Tax Rates in 2014 | Tax Foundation

Why would you want the extra compliance issues and bureaucracy required by VAT vs the those of a sales tax?

Also, it is important to note, that the effect of a tax depends on the tax mix. What tax would you propose reducing to compensate the higher levy.
 
Personally, I think it would be much easier on everyone if the government simply confiscated all personal property, did away with money and issued people a modest lifestyle. We American are all too greedy and stupid to fend for ourselves anyway so it's best that we have government watchers looking out for us.
 
Personally, I think it would be much easier on everyone if the government simply confiscated all personal property, did away with money and issued people a modest lifestyle. We American are all too greedy and stupid to fend for ourselves anyway so it's best that we have government watchers looking out for us.

We're 40% of the way there (on income anyway).
 
I'm generally against the idea, but if it were to REPLACE most of the taxes we have now I'd consider it.

If it were just added to the already long list we have, then I'd be absolutely against it.

Since so many things now depend upon IRS as the enforcement machanism, i.e. having a federal income tax, it is highly unlikely that it will ever go away. The most likely tax modification scenario would be some sort of "reform" of the federal income tax coupled with the addition of national VAT/sales tax. Our congress critters just love their ability to exchange IRS code changes for campaign cash which also makes it politically difficult to eliminate the IRS. One major difficulty of having a national sales tax is that it would likely not match the items taxed (or not taxed) by current state/local sales taxes making it more complicated to implement/enforce.
 
Personally, I think it would be much easier on everyone if the government simply confiscated all personal property, did away with money and issued people a modest lifestyle. We American are all too greedy and stupid to fend for ourselves anyway so it's best that we have government watchers looking out for us.

Exempting themselves, of course. ;)
 
Personally, I think it would be much easier on everyone if the government simply confiscated all personal property, did away with money and issued people a modest lifestyle. We American are all too greedy and stupid to fend for ourselves anyway so it's best that we have government watchers looking out for us.

you are so clever!
 
Why would you want the extra compliance issues and bureaucracy required by VAT vs the those of a sales tax?

Also, it is important to note, that the effect of a tax depends on the tax mix. What tax would you propose reducing to compensate the higher levy.

Harmonized sales taxes
It would be implemented as a national sales tax. Company A sells product to company B and to company C- is a sales tax added at each step in the chain of company to company sales?

Goods and services tax/harmonized sales tax (GST/HST)

In canada the VAT was added over and above Provincial sales tax. Most if not all provinces have harmonized their Prov rates with the federal govt. Alberta does not have a prov. sales tax. May have after the election?????

Also as it impacts low income, a percentage based upon that - income level - family size is rebated.
Goods and Services Tax (Canada) - Wikipedia, the free encyclopedia

Untaxed items[edit]
The tax is a 5% tax imposed on the supply of goods and services that are purchased in Canada, except certain items that are either "exempt" or "zero-rated":
• For tax-free — i.e., "zero-rated" — sales, GST is charged by suppliers at a rate of 0% so effectively there is no GST collected. However when a supplier makes a zero-rated supply, it is eligible to recover any GST paid on purchases used in producing the particular supply or service. This effectively removes the cascading tax from these particular goods and services.
o Common zero-rated items include basic groceries, prescription drugs, inward/outbound transportation and medical devices (GST/HST Memoranda Series ME-04-02-9801-E 4.2 Medical and Assistive Devices). Certain exports of goods and services are also zero-rated.
• For tax-exempt supplies, the supply is not subject to GST and suppliers do not charge tax on their exempt supplies. Furthermore, suppliers that make exempt supplies are not entitled to recover GST paid on inputs acquired for the purposes of making the exempt good or service. Tax-exempt items include long term residential rents, health and dental care, educational services, day-care services, legal aid services, and financial services.
 
Well, it all depends what it is and what it replaces and what are the rules.

I am against the FairTax because I think it would be a disaster.
 
I tend to be against it as sales taxes and similar taxes tend to be regressive in nature. Ny necessity the poor and middle class tend to spend a larger percentage of their income on consumption than the rich.
 
I tend to be against it as sales taxes and similar taxes tend to be regressive in nature. Ny necessity the poor and middle class tend to spend a larger percentage of their income on consumption than the rich.

Then exclude certain products.
And you can implement a rebate as we have in Canada for low income levels. If I recall correctly it comes in every 3 months, based upon last year’s income.

Now add that tax to a person buying a 10 Mil house.
 
Harmonized sales taxes
It would be implemented as a national sales tax. Company A sells product to company B and to company C- is a sales tax added at each step in the chain of company to company sales?

Goods and services tax/harmonized sales tax (GST/HST)

In canada the VAT was added over and above Provincial sales tax. Most if not all provinces have harmonized their Prov rates with the federal govt. Alberta does not have a prov. sales tax. May have after the election?????

Also as it impacts low income, a percentage based upon that - income level - family size is rebated.
Goods and Services Tax (Canada) - Wikipedia, the free encyclopedia

Just do the sales tax at the consumer level. I do know that a vat is optimal in allocation terms. But you need a whole bureaucracy to implement it and it is prone to fraud. If you want to get rid of income tax you could still reduce cost by downsizing irs though.
 
We absolutely should *not* add a VAT to our current set up. If anything we should be looking at our existing tax code before doing something so stupid as adding a VAT to existing conditions.
 
Just do the sales tax at the consumer level. I do know that a vat is optimal in allocation terms. But you need a whole bureaucracy to implement it and it is prone to fraud. If you want to get rid of income tax you could still reduce cost by downsizing irs though.

Well, the Govt is broke, deficits are high, programs cuts and tax increases are/should be on the table.
A VAT is only paid on the end use product.
Sales tax- is that not added at each level of the chain from product received to thru various vendors till you purchase it? That can be regressive.
 
No, unless the federal income tax is then eliminated.
 
No. No new taxes. What I'd actually like to see is a single embedded retail sales tax that we never see or need to file to comply with, similar to gas taxes. This to completely replace all other taxes; local, state and federal. Whether the state collects and sends Washington's portion to congress or the federal government collects and sends the states and cities their cut, I'm not sure but simplify it so it doesn't even seen like we're paying taxes.
 
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Well, the Govt is broke, deficits are high, programs cuts and tax increases are/should be on the table.
A VAT is only paid on the end use product.
Sales tax- is that not added at each level of the chain from product received to thru various vendors till you purchase it? That can be regressive.

Vat is paid every time the product is sold and the seller gets back the vat he paid, when he bought it. This requires a bureaucracy and continuous payments to and from it.

Depending on how the sales tax can be levied on the last user.
 
Vat is paid every time the product is sold and the seller gets back the vat he paid, when he bought it. This requires a bureaucracy and continuous payments to and from it.

Depending on how the sales tax can be levied on the last user.

And a portion is retained by the company to cover those costs.
 
Eh not sure, probably prefer more of a sales tax then a VAT first off. Still, personally I wouldn't want to pay sales tax or VAT taxes, but I also realize that if the government needs money it isn't the worst idea (as much as I'd still hate it).

Other issues come up with what the tax would be on, if it includes food and clothes etc. like in some states then I can't really support it as it's incredibly regressive. If it is more like a luxury tax, I could see some appeal, even if it means things I like (like video games) are going to cost more =p.

How to manage the loss of state sales tax is another problem, since some states income is mostly sales tax for (usually) stupid reasons. Either people would have to be taxed twice, or something would have to be set up to help states with income and expenses, more so then currently.

I agree with what the other poster said, it'd be really nice if sales tax started getting included in the price of goods, instead of having to figure it out yourself. If you mostly shop in the same city, it isn't too hard to start figuring it out with a calculator, just really annoying but if you are going to different cities sometimes, or traveling, it gets really hard to keep up with who charges what in sales tax. It gets worse if some areas have differing tax codes, like Mesa which (if I recall) doesn't have a local sales tax on food, so you pay just the state rate.
 
Only if they got rid of income taxes. I would support it over the current income tax system.

Our Government doesn't have a revenue problem, it has a spending problem.
 
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