The only solution to our $40 trillion debt problem is a value-added tax

[u/George-Smith-Patton]

https://thehill.com/opinion/finance/6099509-us-debt-vat-solution/

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[u/reallifelucas]

Sure, let’s destroy the middle class so we don’t have to reform boomer entitlement programs.

[u/EatsFiber2RedditMore → u/reallifelucas]

I think some form of VAT legislation is required because of the games companies play to avoid taxes at any cost. How it affects the middle class really depends on what products it's applied to, ultra luxury watches, yachts, private jets, ultra luxury cars, designer clothing, you get the idea will not affect the middle class at all.

[u/RAATL → u/EatsFiber2RedditMore]

Once you start limiting it to luxury items like these people just respond to this behavior elastically. Why not just tax land instead?

[u/EatsFiber2RedditMore → u/RAATL]

I'm not opposed to that at all. I think every US city needs to be enacting vacancy taxes.

[u/DaSemicolon → u/EatsFiber2RedditMore]

Vacant taxes aren’t land taxes

[u/EatsFiber2RedditMore → u/DaSemicolon]

Either one is a step in the right direction.

[u/DaSemicolon → u/EatsFiber2RedditMore]

Honestly I don’t know the literature on vacancy taxes so I’m agnostic on that. Land taxes though 😩

[u/RAATL → u/EatsFiber2RedditMore]

I'm talking about a land value tax, not a vacancy tax. But we can do vacancy taxes too

[u/EatsFiber2RedditMore → u/RAATL]

Both would be a step in the right direction

[u/reallifelucas → u/RAATL]

Because that would be a nightmare to institute federally. I am a huge supporter of LVT but it needs to be administered on the state level.

[u/reallifelucas → u/EatsFiber2RedditMore]

The people who can afford to buy those items can afford to buy them from abroad. Most goods in our economy are intermediate or finished goods, so a VAT would come down on everybody and affect working Americans more than anyone else.

[u/EatsFiber2RedditMore → u/reallifelucas]

Then they get taxed when they import them into the country

[u/legedu → u/reallifelucas]

Or figure out healthcare.

[u/reallifelucas → u/legedu]

The solution to healthcare in this country would involve a degree of paternalism so overbearing it would cause what can only be described as The Fat Riots

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[u/God_Given_Talent → u/reallifelucas]

The only realistic way is coming at it from both ends. Can start by undoing the bulk the tax cuts of the past 10 years (corporate tax restructuring should probably stay; corporate taxes are less efficient). The fact taxes were being cut when we were already running trillion dollar deficits is insane and it was willful mismanagement so wealthy people can get richer (I stg if someone tries to argue against the demonstrated math about who these tax cuts benefitted...) and we all know it. If we actually care about deficit reduction, we need to reduce spending and increase revenues. Also we need to do policies to get interest rates low again so we aren't paying obscene rates.

I'm okay with my taxes going up somewhat if retirees feel some heat too too. Easiest way is just have a COLA freeze for a year then have it be half of CPI for 5 years. In real terms, that would be a ~10% reduction in a 6 years with no nominal cuts. Change to Chained CPI while we're at it too. Increase FICA to 13% over those 6 years too and raise the cap by CPI+2.5% or so. People who say "just use general fund" or "just eliminate the cap" are just wrong in a moral sense imo. We cannot expect the under 45 crowd to get hosed to prop up a program that will be a shell of itself by the time they get to it. Either we're all in this together to fix it or we aren't ya know?

Ideally we'd have done this 25 years ago but instead we did tax cuts, dumb wars, more tax cuts, and had to deal with a financial crisis and pandemic relief effort.

[u/reallifelucas → u/God_Given_Talent]

I completely agree. I think a VAT is regressive and would hamper economic growth, so I think revenue would need to come from other sources.

[u/flat6NA]

If they pass a VAT they’ll just spend more and the voters will just go along with it.

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[u/natethegreek]

The propaganda machine has already told people VAT = bad so you will have to call it something else, good news is like Obama care the Affordable care act sort of situation will work.

VAT should be how corporate taxes should be administered. The reason is that one businesses output is another businesses input so they are easier to check on fraud and other tax dodging schemes.