Wednesday, October 27, 2010

OK, let me explain something here...

by Rich Miles

Do any of you wonder what this talk is in the TV commercials about a 23% sales tax? I mean, I see this topic getting way out of hand if there isn't some clarity injected into the discussion. So let me give it a try:

First, let me say that I'm not sure if I favor this plan yet or not. There are too many uncertainties to it. I know that if it were laid out the way several countries in Europe do it, then I would be for it, wholeheartedly. But I still have infinite faith in our government to take a perfectly fine idea, and fuck it up miserably. So I'm not going to express an opinion on it until I've seen what, if anything, our lads in Washington are going to do with it. I rather expect it won't be anything like what I'm about to describe, at least in its first incarnation. Assuming there will be a first incarnation.

OK, so here's what is being bandied about, though not with a very high priority at the moment. It's called a value-added tax, or VAT, and it's common in many of the other countries of the civilized world.

But most countries who have a VAT do not apply it to everyday purchases like groceries, toiletries, soft drinks, etc. VAT is intended as a consumption tax. Great Britain has an approximately 17% VAT, in addition to income tax and assorted other taxes - but NOT sales tax. I don't know what other countries charge, though it should be easy enough to ferret them out on the Internet.

So what would be the point of America adopting a VAT, which is the 23% tax that's being talked about? Well, if the income tax remains in effect, there would be little point to it. But if the VAT were to replace the income tax, and were attached to enough commodities, it might end up being a boon to all of us - no income tax, and a refund on a portion of the VAT at the end of the year.

So far, there hasn't been enough (none is not enough) sane discussion of the tax to determine if it's feasible in America. But it's not automatically a rotten idea. There are circumstances under which a VAT could be a good idea.

But you'll never convince a repug of that. It's a tax, and there's nothing else for it but to reject it.

So that's what the tax is about. It will take a lot more talk before it can even be considered in this country.

And if you have a clearer explanation of VAT, please comment here. I'd appreciate it.

1 comment:

Anonymous said...

Makes sense.