The big banks, the multi-nationals, and Wall Street are making big profits from the off-shoring of production and jobs. This keeps the market up, but the economy is going to pot. People are without jobs and will stay jobless unless we can stop the hemorrhage of off-shoring.
Oliver Wendell Holmes observed: "Taxes are what we pay for civilized society ..." While it's difficult, every mayor, every governor, each year pays for the government that the city or state provides. But when those same mayors or governors get to Congress, they become economists worrying about the economy. Taxes hurt the economy. Suddenly, everybody is against taxes. Congress goes into this off-Broadway show of all talk, no action -- cutting spending; closing loopholes; long-range plans to lower the debt; and fail-safe provisions for later Congresses to pay for government. As a result of this nonsense, at the end of this fiscal year Congress will have added $5 trillion to the national debt in four years.
Congress could easily eliminate deficit spending by cancelling the corporate income tax and replacing it with a 5 percent VAT. The 2010 corporate tax brought in $191.4 billion, whereas a 5 percent VAT brings in $583 billion. This actually amounts to a cut in taxes with more revenue. Exemptions of $83 billion for the low income leaves $300 billion to start paying down the debt. Since the VAT is rebated, this promotes exports and frees up $1 trillion in off-shore profits that Corporate America can repatriate to produce and create jobs.
The VAT solution is not just a good idea, but absolutely necessary. The problem is not just the off-shoring of production and jobs to China but the loss of production and jobs to Europe. Using its 19 percent VAT, which is rebated at export, Germany produces parts at high cost in Germany, ships the parts to Charleston, S. C., at a cost of 3 percent, assembles the parts at 3 percent cost, and produces windmills in the United States 13 percent cheaper than any U. S. production. The corporate income tax that is not rebated on export makes it difficult to produce for a profit in the United States and makes U. S. exports uncompetitive in globalization.
But front and center in the mind of every member of Congress is his or her job -- not the country's jobs. This takes contributions. Twelve years ago, in my race to be elected the seventh time to the United States Senate, I had to raise $8.5 million. Eight and a half million dollars factors out to $30 thousand a week, each week, every week, for six years. It's not just raising money the year ahead of election, it's raising money all six years. And Wall Street, the big banks, and the multi-nationals are the predominant contributors. Substituting the corporate tax for a VAT makes it profitable to produce in the United States, but the profit is not as big as off-shore profits.
Wall Street, the big banks, and multi-nationals are not concerned about the country's economy. All they care about is more and bigger profits. Multi-nationals get a tax break for off-shoring jobs. So Congress caters to the contributors. It continues the tax break for off-shoring jobs; refuses to even discuss a VAT; introduces bills "made in the U.S.A.," and engages in every fraud about creating jobs.
People are frustrated because there's all talk and no action on jobs and deficits. People are frustrated because our competitive country is not competing in globalization. To compete, to stop deficit spending, to create jobs, a value added tax is necessary.
Andy Stern: The Third Economic Revolution -- Boom or Bust for America?
William Drayton: The Only Way to Fix the Deficit: Multiply Jobs
Leo Hindery, Jr.: Creating Jobs -- Two Better Ways To Do It
Pat Choate: Time for Real Tax Reform, Again
VAT: Will the U.S. Adopt a Value-Added Tax? - EconWatch - CBS News
Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look ...
Obama Economic Adviser Says U.S. Should Consider 'Value-Added Tax ...
Tax where the money is.....a luxury goods tax. WHY do buyers of yachts deserve to purchase a yacht and pay no taxes???
"A bill proposing to cap the sales tax for yachts at $18,000 has passed the Ways and Means Committee and will be considered by the full House
The current sales tax for yachts in Texas is 6.25 percent. If the bill is passed, sales for yachts costing more than $288,000 would get a tax break.
“This is a jobs bill, not a tax break for the so-called rich,” Greg Allison, member of the Gulf Coast Yacht Brokers Association, said. “A $300,000 boat is not a large boat anymore.”"
A $300K BOAT ISN'T A LARGE BOAT ANYMORE, BUT TEACHERS ARE BREAKING THE BANK???
A financial transaction tax would not cause any Wall Street traders to cut back on basic survival needs.
There is nothing fair about this economic crisis, but it shouldn't be all on the shoulders of the poor, working poor and middle class to suffer and sacrifice so that the haves and have mores can continue to rob us blind.
Come on Senator Hollings. You support taxing financial churn equally with your VAT, and I'll support it period.
And the lower classes will be able to buy less......
The lower classes always get it in the end!
I squirm whenever I see that word combo. Most often the line "to compete, to create jobs" is followed by an attempt to sell me a pig in a poke. Add to that the claim that VAT would counter offshore jobs going to China(!) and a red flag goes up. Hey, maybe it'll do exactly as he says but my 'spider sense' is tingling on this. I've found whenever someone promises the sky most often all you wind up with is hot air.
This may even be one of them.
I cannot agree with you to substantially change, or even address, the tax system at this time.
What we KNOW about the current makeup of Congress is that it is a wholly owned subsidiary of the very rich. Democrats are different from Tea-Publicans only in the degree to which they will work exclusively for the rich and military-industrial complex companies.
In the past twelve years the concentration of income in the nation has gone from 7% for the top 1% to 23%. That change in concentration did not happen by accident.
Congress, all of Congress, and the President, have decided to work against the people of the United States and for the elite 1% only.
Substantial changes in the tax code, at this time, would inevitably be perverted to increase the speed at which corporate feudalism is increasing.
A change, like a VAT tax, would be set up to increase the suffering of the poor and working class and enhance the income of the already rich.
The President agreed to a policy of not increasing taxes on the wealthy. Tea-Publicans are actively working to destroy the economy by forcing a failure to honor our financial commitments. We spend more on country-building in Iraq and Afghanistand than we do on Americans.