tag:blogger.com,1999:blog-4900303239154048192.post4522580447405085572..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Stirring the VATUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-4900303239154048192.post-79179144710080628102009-12-12T02:37:24.061-05:002009-12-12T02:37:24.061-05:00Peter Dorman said,
"This problem cannot be s...Peter Dorman said,<br /><br />"This problem cannot be solved by playing with the tax system."<br /><br />I would say that the _ONLY_ way to solve this problem is by playing with the tax system.<br /><br />Brenda Rosser said,<br />"there is an oversupply of capital in manufacturing and finance and these areas are most likely to benefit from a fiscal boost by the US government; (iv) there's a huge pool of US dollars already being used by the big private equity corporations to buy up everyone and everything else at present (check the current activities of TPG, Carlyle Group, KKR etc); (v) the fiscal stimulus would need to be directed into areas that don't simply create further inflation (away from traditional sources of energy, into local food production and sustainable housing etc)."<br /><br />Money is created and blown into the economy by government spending. It matters where that money is injected (on what does government spend) and it matter where and how that money is then sucked back out of the economy. Taxes do that sucking part. Import duties suck money out of the pockets of offshore producers and highly progressive taxes on ordinary individual income suck money out of the pockets of people who don't earn it.TheTruckerhttps://www.blogger.com/profile/10346127768102862741noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-40970364371345334532009-12-12T01:45:54.870-05:002009-12-12T01:45:54.870-05:00In defense of the VAT. It is often described, per...In defense of the VAT. It is often described, perhaps I should say inevitably described as a sales tax. There are historical and political reasons for this, not economic, primarily having to do with the way it is levied and reported. But "value added" is not "sales." It is gross sales minus purchased inputs. <br /><br />Jerry Brown in 1992had the best VAT imaginable before it was sunk in this "sales tax" mire following some effective and aggressive campaigning by his opponent Bill Clinton. <br /><br />Brown's idea was to levy the VAT at the point of the business. Replacing the corporate income tax. He claimed that this 13 percent VAT and a 13 percent flat tax (with deductions to make it progressive) could replace all income, payroll and corporate taxes. The form would have fit on a postcard. <br /><br />I realize both proponents and opponents use VAT to mean sales tax. But it is just not necessarily so. <br /><br />It IS a good, broad-based tax that could have a very low rate and generate a lot of revenue. But ...<br /><br />In these times, there is revenue to be had in economically efficient taxes like on financial transactions, carbon, or high rollers. (In the context of economic collapse, what is the rationale for favoring the elites? They're no longer leading the country into prosperity. Greed is good because ....?)demand sidehttp://demandsideblog.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-89461401348266548612009-12-11T17:24:35.809-05:002009-12-11T17:24:35.809-05:00" 3. Big fiscal deficits at a time of deep re..."<i> 3. Big fiscal deficits at a time of deep recession are the medicine, not the disease. If the US economy remains this depressed for years into the future then, yes, the deficits are dangerous—but the cause is the economy, not the fiscal policies taken to stanch the bleeding. </i>"<br /><br />The trouble with the idea of further US Government spending is: (i) US dollar hegemony; (ii) related structural problems with the US and global economy prevent the flowing of currency through large swathes of the US domestic and other populations; (iii) there is an oversupply of capital in manufacturing and finance and these areas are most likely to benefit from a fiscal boost by the US government; (iv) there's a huge pool of US dollars already being used by the big private equity corporations to buy up everyone and everything else at present (check the current activities of TPG, Carlyle Group, KKR etc); (v) the fiscal stimulus would need to be directed into areas that don't simply create further inflation (away from traditional sources of energy, into local food production and sustainable housing etc).<br /><br />The concept of fiscal stimulus is a good one. In the right (structural) context and with an appropriate currency. Free up the ability to create and use local currencies.Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-86385289652973145592009-12-11T13:53:06.120-05:002009-12-11T13:53:06.120-05:00Unlike sales tax, the VAT is collected before the ...Unlike sales tax, the VAT is collected before the sale to the consumer, so it is hidden from the consumer's view. That makes it more palatable.<br /><br />One argument that is made for a VAT is that, despite its regressive nature, the gov't could provide offsetting aid to the poor and lower middle class. Yes, they could, but, as we know, could does not mean would. If the gov't has not done much in regard to the sales tax, they would not be likely to do more in regard to a VAT. In fact, since it is a hidden tax, they would probably do less (in proportion). The fact that other countries may have done so does not at all mean that we would.Minnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-59859099612095046442009-12-11T12:52:04.411-05:002009-12-11T12:52:04.411-05:00Elites love the idea of a VAT because it allows th...Elites love the idea of a VAT because it allows them to eliminate the deficit without increasing their own taxes much. Sales taxes are inherently regressive, after all.<br /><br />Everyone loves free money and the usual suspects see a VAT as a way of making other people pay for bank bailouts, the wars, tax cuts for the rich, and the rest of governmental largess aimed at the wealthy.Curmudgeonhttp://www.talisiorder.ca/rapidcommentsnoreply@blogger.com