Value Added Tax Won’t Be Alternate For Fed Income Tax – It’ll Be Both
By Janet Peterson on April 10, 2010, 10:01 am Posted in Finance NewsOne of the many ways to pay for the new healthcare plan may include a value added tax. Many European countries already use a value added tax to help them raise revenue for expansive social programs. This sales tax is imposed in addition to the income tax. A few optimistic people in the United States have speculated that a national sales tax may replace the federal income tax.
A Value Added Tax Will Not Replace The Income Tax
The passage of the current health care bill is expected to raise the national debt to unprecedented levels. The government accounting office has suggested that the program will cost $10 billion dollars over ten years. Because the government does not have a good track record when it comes to predicting costs accurately.
The government typically does not repeal taxes that it adds. Even when gas prices started to rise almost uncontrollably several years ago, state and federal governments were reluctant to remove one of the highest percentages of the cost of a gallon of gas, the hidden taxes consumers must pay. If a national value added tax is proposed and passed, it will exist alongside the national income tax.
Replacing The Income Tax
The income tax remains one of the most confusing and convoluted pieces of law that exist in the United States. The percentage a person pays varies based on his income and many people do not pay federal income taxes at all. The idea of replacing the income tax with a sales tax or a flat tax has been proposed many times, but no politician has ever managed to draft such a bill. If a national sales tax gets proposed to pay for the new and largely unwanted health care legislation, it will be used, along with the income tax, to fund massive federal spending on social programs.
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5 Responses to “Value Added Tax Won’t Be Alternate For Fed Income Tax – It’ll Be Both”
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10 billion over ten years? I think you got your numbers wrong. 10 billion over ten years is pennies compared to our current rate of spending. Fairly important error, if you ask me.
The health care law already includes taxes to more than pay for it.
If the USA could only find a strong enough/smart enough leader to abolish the Income Tax in its entirety and replace with a consumption or Value Added tax
The USA should abolish the income tax in its entirety and replace it with a value added or consumption tax BUT WITH NO EXCEPTIONS for what some people will rationalize as helping the poor. Have NO exceptions and keep it simple. With no income taxes the US economy would explode with investments from around the world and there would be prosperity on an incredible level FOR ALL!!!
Where is Malcom Forbes when you need him. He was rejected but now those right wing nutsos are seriously considering Palin. OMG!!! I’m so happy to live in Canada!
Why not have a flat tax per bracket? One where the income (all sources) and the number of dependents would be controlling factors in determining the taxes for each bracket. Brackets start at some level such $30k and increases by say $10k for each bracket.