# Does America need a federal Value Added Tax? **URL:** \ **Category:** Great Debates\ **Created:** [June 5, 2010, 12:58am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006 "2010-06-05T00:58:13Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [June 6, 2010, 2:34pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/21 "2010-06-06T14:34:21Z")
> [@Snnipe\_70E](#): > > Last time I heard it quoted as being in the latter part of May. Yep, and I’m suggesting that their methodology might be suspect. ---
**Author:** ![In\_Winnipeg](https://avatars.discourse-cdn.com/v4/letter/i/a8b319/32.png) [@In\_Winnipeg](https://boards.straightdope.com/u/In_Winnipeg)\ **Post date:** [June 6, 2010, 4:37pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/22 "2010-06-06T16:37:02Z")
Another Canadian here: We were told that the GST would actually make goods cheaper because the taxes on manufactured goods would no longer be “hidden”. In telling us that this was a good idea for all, the Conservatives swore that we would see savings. Naturally, it didn’t happen, and prices actually went up. The reason? Phasing in the new system, we were told, actually ate up any savings that would have been passed along. Do not trust a government that tries to candy-coat anything new that they are trying to force past the taxpayers. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [June 6, 2010, 5:19pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/23 "2010-06-06T17:19:16Z")
> [@In\_Winnipeg](#): > > Another Canadian here: > > We were told that the GST would actually make goods cheaper because the taxes on manufactured goods would no longer be “hidden”. In telling us that this was a good idea for all, the Conservatives swore that we would see savings. > > Naturally, it didn’t happen, and prices actually went up. The reason? Phasing in the new system, we were told, actually ate up any savings that would have been passed along. > > Do not trust a government that tries to candy-coat anything new that they are trying to force past the taxpayers. Boy isn’t that the truth. If we had a flat tax or a VAT I think we would be better off, execpt I do not trust congress to not mess it up in passing one and I think the public would loose. Example the 1994 tax symplification act, it was reported on the news that it reduced the tax code from 2000+ pages to 4000+ pages. Symplification??? ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [June 6, 2010, 5:31pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/24 "2010-06-06T17:31:35Z")
I don’t think a VAT is going to solve the problem of US Multinationals not paying their fair share of corporate taxes here because they’re “earning” their money overseas. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [June 6, 2010, 6:19pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/25 "2010-06-06T18:19:07Z")
> [@MOIDALIZE](#): > > I don’t think a VAT is going to solve the problem of US Multinationals not paying their fair share of corporate taxes here because they’re “earning” their money overseas. That’s not unfair at all. In fact, trying to “fix” this would likely result is massive economic devastation and a global depression, foillowed by mass starvation. In fact, it would be far, far wiser to go the other way entirely, and instead of punishing companies with a high corporate tax rate and various relocation fees, encourage them to recognize income in the U.S. This has a lot of value and would greatly strengthen our banking system, as well as growing lots of high-paying, high-performance jobs here. ---
**Author:** ![Clothahump](https://avatars.discourse-cdn.com/v4/letter/c/51bf81/32.png) [@Clothahump](https://boards.straightdope.com/u/Clothahump)\ **Post date:** [June 6, 2010, 6:20pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/26 "2010-06-06T18:20:59Z")
> [@BrainGlutton](#): > > Sounds persuasive to me. Do you think it’s a good idea? Not just no, but hell no. [This](http://www.fairtax.org) is a far superior idea. ---
**Author:** ![Mr\_Smashy](https://avatars.discourse-cdn.com/v4/letter/m/2bfe46/32.png) [@Mr\_Smashy](https://boards.straightdope.com/u/Mr_Smashy)\ **Post date:** [June 6, 2010, 6:29pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/27 "2010-06-06T18:29:39Z")
Samuelson did a [good job](http://www.washingtonpost.com/wp-dyn/content/article/2010/04/18/AR2010041802723.html) summing up the implications of the VAT for the US a couple months ago. The bumper sticker: The tax is not as simple as its proponents claim, and there will be a huge amount of lobbying to exempt certain classes of products, just like Europe suffers from. And if it gets enacted at 16 percent, that certainly would hammer consumer spending to the point where the recovery would be threatened. ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [June 6, 2010, 6:32pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/28 "2010-06-06T18:32:05Z")
> [@smiling\_bandit](#): > > That’s not unfair at all. In fact, trying to “fix” this would likely result is massive economic devastation and a global depression, foillowed by mass starvation. In fact, it would be far, far wiser to go the other way entirely, and instead of punishing companies with a high corporate tax rate and various relocation fees, encourage them to recognize income in the U.S. This has a lot of value and would greatly strengthen our banking system, as well as growing lots of high-paying, high-performance jobs here. Doom! Gloom! You mean if we insisted that Exxon actually [pay some goddamn taxes to the United States](http://thinkprogress.org/2010/04/06/exxon-tax/) instead of trying to shelter it all in the Caribbean, the entire global economic order would collapse? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [June 6, 2010, 7:01pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/29 "2010-06-06T19:01:21Z")
> [@Chronos](#): > > This business of spreading out the tax over the entire chain of sales: How on Earth would you track that? If I pull petroleum out of the ground and sell it to a refinery, and they refine it and sell some of the fractions to a plastics company, and they process it into plastic pellets which they sell to a car-parts supplier, and they shape the plastic into fenders, and sell the fenders to a car maker, I end up paying some portion of the tax on the car? Never mind the fact that some other fractions of the oil the refinery gets will go to places other than the plastic factory, and some of the plastic factory’s pellets will go to someone other than the car-parts company, and so on. > But then there’s the kicker, in the last paragraph: If this tax system is going to bring in the same amount of money as the income tax it’s replacing, but it doesn’t “soak the rich” as much as the income tax does, then the only alternative is that it’s soaking the non-rich instead. And this is supposed to be better? This. Ultimately, it’s a national sales tax with a different name. It will drive business overseas just like any other tax would. ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [June 6, 2010, 11:31pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/30 "2010-06-06T23:31:44Z")
> [@Magiver](#): > > This. > > Ultimately, it’s a national sales tax with a different name. It will drive business overseas just like any other tax would. Lots and lots and lots of other countries have VAT/GSTs, and that’s not what appears to have happened with them. Australia and New Zealand have vibrant business sectors, and they have a 10 and 12.5% (respectively) GST. The thing is, a GST in the US is only going to work if _all_ other sales/end-user taxes on consumer items are removed- with the possible exceptions of “Stamp Duties” etc on really expensive things like cars. Of course, if you do that (as has been done in Australia), that means you don’t get each individual state/county/city council/town charging their _own_ taxes, which would probably be better for consumers and business, but less good for each state/county/town, which is why it will never happen since too many people will take the “NO! MORE! TAXES!” approach. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [June 6, 2010, 11:35pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/31 "2010-06-06T23:35:05Z")
We need _more_ taxes? And _more_ bookwork? ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [June 7, 2010, 12:29am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/32 "2010-06-07T00:29:19Z")
> [@Snnipe\_70E](#): > > Last time I heard it quoted as being in the latter part of May. You must have mis-heard, it is April 9th according to the people who came up with the idea. [http://www.taxfoundation.org/taxfreedomday/](http://www.taxfoundation.org/taxfreedomday/) ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [June 7, 2010, 2:18am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/33 "2010-06-07T02:18:49Z")
> [@Musicat](#): > > We need _more_ taxes? And _more_ bookwork? I for one welcome our new Greek overlords. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [June 7, 2010, 4:45am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/34 "2010-06-07T04:45:42Z")
> [@Mighty\_Mouse](#): > > You must have mis-heard, it is April 9th according to the people who came up with the idea. > > [http://www.taxfoundation.org/taxfreedomday/](http://www.taxfoundation.org/taxfreedomday/) What I probably hears was freedom date if we had to pay for everything the government was spending. According to your link this year it would have been May 17th. Our taxes collected freedom date is April 9th. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 7, 2010, 8:59am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/35 "2010-06-07T08:59:32Z")
> [@Chronos](#): > > This business of spreading out the tax over the entire chain of sales: How on Earth would you track that? You are aware that many countries already do this, right? There _are_ existence proofs that tracking is possible. > [@Chronos](#): > > But then there’s the kicker, in the last paragraph: If this tax system is going to bring in the same amount of money as the income tax it’s replacing, but it doesn’t “soak the rich” as much as the income tax does, then the only alternative is that it’s soaking the non-rich instead. And this is supposed to be better? 😕 Tax details are _enormously_ important, even when the total taxes paid by a sector are unchanged. Whether tax on sales is better or worse than tax on profits is an interesting question, but don’t argue they have the same effect! _We need to view taxes and income (re-)distribution as **separate** problems._ Even “green” progressives often oppose the carbon or gasoline tax as “regressive” but that such a tax is overwhelmingly desirable yet still unadopted proves that American governance is defective. It would be straightforward to adjust other taxes (income or social-security) to make gasoline tax class-neutral on average. (Yes, certain _individuals_ might be affected, e.g. low-income people with long commutes, but _that’s the whole idea_ of a gasoline tax, gol-darn it, to discourage inefficient gasoline use!) > [@Chronos](#): > > ("When the car is exported the $10,000 is returned. ") To whom? The exporter, who has paid _all_ the tax since, at each stage, the added cost was just passed along. (Whether the tax on exports _should_ be returned is another issue.) ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 7, 2010, 9:05am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/36 "2010-06-07T09:05:58Z")
> [@](#): > > Our taxes collected freedom date is April 9th. Every time I see this kind of garbage I want to puke at the stupidity of the American voter. There’s no “food freedom” day when we don’t have to pay for our food anymore. What is there about education, fire and police protection, highway maintenance, etc. that leads otherwise sapient primates to think they grow on trees effortlessly and with no cost? :smack: ---
**Author:** ![blindboyard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/blindboyard/32/2833_2.png) [@blindboyard](https://boards.straightdope.com/u/blindboyard)\ **Post date:** [June 7, 2010, 12:10pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/37 "2010-06-07T12:10:48Z")
> [@septimus](#): > > The exporter, who has paid _all_ the tax since, at each stage, the added cost was just passed along. (Whether the tax on exports _should_ be returned is another issue.) Yes. Might want to look up Carousel Fraud. Can only be combated with competent tax inspectors. Wouldn’t hold my breath on America winning that one. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 7, 2010, 2:14pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/38 "2010-06-07T14:14:24Z")
> [@Chronos](#): > > This business of spreading out the tax over the entire chain of sales: How on Earth would you track that? I dunno, but apparently a lot of countries have a VAT, so it must not be an insuperable accounting problem. ---
**Author:** ![buttonjockey308](https://avatars.discourse-cdn.com/v4/letter/b/bcef8e/32.png) [@buttonjockey308](https://boards.straightdope.com/u/buttonjockey308)\ **Post date:** [June 7, 2010, 6:47pm UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/39 "2010-06-07T18:47:30Z")
It’s probably not a problem in earnest, however we won’t repeal the remainder of the associated taxes. I’d suspect, being America, that we’d layer the VAT right over the existing tax structure (for the consumer) and we’ll be solidly screwed out of that much more money. In my current bracket, I will pay approximately $17,000 between SS, unemployment and taxes this year from my payroll alone. This doesn’t take into account the federal, state and local taxes collected from me whenever I make a purchase. Add what I spend yearly and I will easily contribute $25,000 in total in taxes. I rent an apartment, I have no kids in schools, I have yet to call either the fire or police departments. I drive on the roads, walk my dogs in a park and drink the water; that’s the extent of my use of the system, and I pay for two of the three of those directly. Another tax on top of this structure and I will consider simply dropping out of society and moving to a cabin in Montana and living off of the land. Easily 1/4 of the money I make evaporates in taxes and it’s only going to get worse with what’s expected of Healthcare. A VAT tax, or any other tax for that matter needs to be completely ignored unless and until they can figure out how to live on the money we’re currently giving them. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [June 8, 2010, 1:50am UTC](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006/40 "2010-06-08T01:50:20Z")
> [@septimus](#): > > Every time I see this kind of garbage I want to puke at the stupidity of the American voter. There’s no “food freedom” day when we don’t have to pay for our food anymore. What is there about education, fire and police protection, highway maintenance, etc. that leads otherwise sapient primates to think they grow on trees effortlessly and with no cost? :smack: The tax freedon date is a way of measuring just how much of your yearly income goes to taxes. I does not mean that after that day you do not have to pay taxes, just a measure of how many days you have to work to equal what you pay in taxes. [Previous page](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006.md?page=1) [Next page](https://boards.straightdope.com/t/does-america-need-a-federal-value-added-tax/542006.md?page=3)