tag:blogger.com,1999:blog-2135788133426971614.post1832405121101411665..comments2024-03-28T01:09:48.303-07:00Comments on 21st Century Taxation: VAT - Economic Effects of More Investment and Less ConsumptionProfessor Nellenhttp://www.blogger.com/profile/03288632402197167948noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2135788133426971614.post-54522387195338822472010-10-29T15:22:26.317-07:002010-10-29T15:22:26.317-07:00Given the importance of "retail therapy"...Given the importance of "retail therapy" for so many Americans, a reduction in spending (and borrowing to spend) and increase in savings is possibly the best positive outcome of implementing VAT! <br /><br />It is no longer viable to "spend our way out of a recession". With the collapse of public finances such as what happened in Greece, deficits cannot be addressed with more spending. As Geithner bluntly puts it, "US consumers cannot be relied on to propel the global economy". See http://www.bloomberg.com/news/2010-06-05/geithner-global-reliance-on-u-s-consumer-will-curb-growth.html<br /><br />We should not continue to spend on borrowed money today, and then fallback on the government to provide for entitlement benefits from more borrowed money. The cycle ends at the point we loose credibility to borrow. Then what? <br /><br />The fact that NRF have conducted a thorough study on the negative impact of reduced retail spending (due to VAT) is applaudable, but I seem to get away from a nagging feeling that the retailers just cannot stomach any more tightening of US consumer wallets.Lisa LZJhttps://www.blogger.com/profile/15408842708018772084noreply@blogger.comtag:blogger.com,1999:blog-2135788133426971614.post-51527988304618998142010-10-19T04:54:42.833-07:002010-10-19T04:54:42.833-07:00There have been proposals to add a VAT at the fede...There have been proposals to add a VAT at the federal level, such as to help pay down the debt. Here is some background in an April 13, 2010 Tax Policy Center blog post - http://taxvox.taxpolicycenter.org/blog/_archives/2010/4/13/4504425.html. Paul Volcker also suggested it for deficit reduction - see April 6, 2010 Reuters article - http://www.reuters.com/article/idUSTRE6355N520100406.<br /><br />It has also been suggested to reduce existing taxes or to replace the corporate tax although a business activity tax - a different form of consumption tax has also been suggested as a replacement business tax.Professor Nellenhttps://www.blogger.com/profile/03288632402197167948noreply@blogger.comtag:blogger.com,1999:blog-2135788133426971614.post-35511853125985783212010-10-19T04:27:03.786-07:002010-10-19T04:27:03.786-07:00Hi - Thanks for the posting. The report is interes...Hi - Thanks for the posting. The report is interesting, but not very objective. The idea of an add-on VAT is unreasonable, and has never been suggested by anyone, except the NRF to generate arguments against VAT. I would be more interested in a report that reviews a potential VAT combined with a lower corporate tax rate, and a slightly lower income tax.Mark Houtzagerhttp://www.us-vat.com/blognoreply@blogger.com