Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Comments

  • Maybe its just me but raising the cost of everything I buy by 20% will sharply reduce the number of things I do buy . If I am somewhat typical this will really hurt the economy.Yes I know I may have more money to spend If my income taxes go down but for years I predict I will see the new prices and refuse to pay them unless I am in desperate need of the product
  • No, it isn't "just you"!
  • ...raising the cost...IRMAA
    That's short for Income Related Monthly Adjustment Amounts, which is government lingo for the higher Medicare premiums that some people must pay next year if their retirement incomes exceed a certain level.

    The Social Security Administration started sending letters in late November to retirees affected by next year's premium surcharges because the income on their most recent tax return (2014) topped $85,000 if single or exceeded $170,000 if married.
    if their modified adjusted gross income (MAGI), which includes adjusted gross income plus tax-exempt interest, exceeds the income thresholds, they will pay more.

    Premiums for both Medicare Part B, which covers doctor visits and out-patient services, and Medicare Part D, which covers prescription drug costs, are based on five-tier income brackets. If your MAGI exceeds an income bracket by just $1, you are catapulted into the next tier and will pay a higher surcharge.
    http://www.investmentnews.com/article/20151208/FREE/151209933/medicare-surcharge-letters-dampen-holiday-spirits?template=printart
  • When VAT is implimented it usually starts low 3-5% and then gets raised from there. Gov't like that because it is easy to do.
    The USA will get one in about 5-10 years.
  • Regarding VAT - there's something for everyone to hate (e.g. conservatives dislike the ease at which it can be increased, liberals dislike its regressive nature). I think I've noted before that merely simplifying rates (whether in a "flat" income tax, or a VAT tax) does nothing to simplify the rules on what is taxed and how. That is, the usual suspect proposals do nothing to address the complexity of the code.

    Which is why, ironically, IMHO this article is raising a false issue - that of adding complexity. The complexity is already in place. Perhaps even worse than with a nationwide VAT. Now you have every state, every local jurisdiction with its own sales tax rules.

    In some places, food is still taxed, but at lower rates than non food items. Sometimes clothing is exempt from taxation, but only up to certain limits, which may be different for the municipality and its state. Some services are taxed, others are not. Some places charge tax on prepared food, but not food you prepare yourself. Some places exempt noncarbonated beverages while taxing sodas. And on and on.

    It's not as though the VAT would add to this clutter - it might even help to clear some of it up by providing a nationwide baseline.

    So complain about, oppose (or support) a VAT for whatever reason - just don't say that it would add more complexity to what is already a crazyquilt of local, regional, and state sales tax rules.
  • msf said:


    Now you have every state, every local jurisdiction with its own sales tax rules.

    A VAT does not change state taxes, state income taxes or national income taxes. It is in addition to all that.

  • msf
    edited December 2015
    I never said that it did. What I said was that we already have virtually every conceivable combination and permutation of tax rules; VAT would likely not add substantially more.
Sign In or Register to comment.