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Author Topic: Higher Taxes on the Way
David Ricardo
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Bruce Bartlett states the obvious -- tax hikes are on the way:

http://www.nationalreview.com/nrof_bartlett/bartlett200505120918.asp

quote:
I now believe that the best we can hope to do is make incremental improvements to the existing tax system and hopefully prevent it from getting worse. Unfortunately, because the current President Bush and the Republican Congress have allowed spending to get totally out of control, I believe that higher taxes are inevitable. In particular, the enactment of a massive new Medicare drug benefit absolutely guarantees that taxes will be sharply raised in the future even if Social Security is successfully reformed.

Too many conservatives delude themselves that all we have to do is cut foreign aid and pork-barrel spending and the budget will be balanced. But unless Republican lawmakers are willing to seriously confront Medicare, they cannot do more than nibble around the edges. With Republicans having recently added massively to that problem, and with a Republican president who won’t veto anything, I have concluded that meaningful spending control is a hopeless cause.

Therefore, we must face the reality that taxes are going to rise a lot in coming years. I believe that a VAT is the least bad way of getting the hundreds of billions of dollars per year that will be needed. The alternative is higher tax rates that will be far more debilitating to economic growth.

If we end up with a VAT, the fault will not be mine. The blame will go to those Republicans who created an extraordinarily expensive new entitlement program just to buy a few lousy votes. It is they who will bear the ultimate responsibility when financial markets demand that deficit reduction be once again the order of the day and tax increases become mandatory.


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Richard Dey
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The Republicans walked right into this trap. They can't control veterans' costs now, so they can't curb welfare costs. They can't control the borders, can't curb imports, and can't improve exports, so dollars are pouring out of the country. There are fewer and fewer middle-class salaries to tax. And they can't tax the rich the least bit more. Knowing the Republicans, they will dump it into the laps of the next administration -- which will likely be Democrat; they will get away with much higher taxes because they have the rhetoric for it.
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Pete at Home
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IIRC, Bush is the first president to have the guts to talk publically about a VAT. That's a tax shift that could actually save our economy rather than effectively subsidizing job bleed to other countries.
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OpsanusTau
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I have my reservations about the idea of a VAT by itself. For all that it's touted as being the epitome of fairness, I'm not really convinced that it is.
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ender wiggin
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Ok, forgive my Canadian ignorance, but what is a VAT?

(I thought a vat was something you put boiling oil in and suspended Batman over)

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OpsanusTau
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Value Added Tax.
From encyclopedia.com:
quote:
(VAT), levy imposed on business at all levels of the manufacture and production of a good or service and based on the increase in price, or value, provided by each level. Because the consumer ultimately pays a higher price for the taxed commodity, a VAT is essentially a hidden sales tax. Originally introduced in France (1954), it is now a major part of the tax structure of most Western European nations. In the early 1990s the U.S. government considered instituting a VAT to fund national health care programs.

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Funean
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No, VAT is the *fee* you pay to watch Batman being suspended over the boiling oil.

Sorry. Silly today.

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ender wiggin
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thanks
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Mike_W
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Ender,
The GST is more or less a VAT

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IrishTD
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Of course taxes were going to go up. Just look at the upcoming costs in Medicare/aid and SS. As the population ages, it was going to get worse -- no way around it. (I just point these out as they will be the majority of the budget in the near future -- with or without the drug benefit)

As far as a VAT goes, I absolutely hate the idea. It's a far better way of hiding taxes than anything else. How obvious would a 1% bump in the VAT level be? 5%? It's a scheme (in my opinion) to hide how much tax the gov't is taking in. Kinda like the price at the pump for gas. Do you really notice that nearly 40 cents/gallon is tax? Nope! Would you notice if they raised it 5 cents/gallon? Nope!

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canadian
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quote:
Originally posted by Mike_W:
Ender,
The GST is more or less a VAT

Except the GST is out in the open.

In my province the sales tax is hidden. I don't know if this is a good or bad idea, but I know it's a lot more convenient than having to mentally figure out the 7% GST on top of the 8% PST in BC. But maybe I'm just horrendous at math.

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