Time for the VAT ?

[Seshmeister]

Is the fraud at the retail level?

And our sales taxes are all local.

Roughly 9% here in Seattle. Food is exempt.

I'm sure there's alot of downside associated with this system.

But our current system isn't exactly working, either...

I thought your sales taxes were local. We don't have sales tax. It would be hard to take say 20% VAT plus 9% Sales Tax.

The VAT fraud comes in all sorts of ways. The simple version is where a fraudster imports some goods, and then sells them. When he sells them, he charges the price of the goods, plus VAT. Then he fucks off never passing the VAT onto the government.

Then there is the cleverer stuff which may not work so well in the US but is a huge scam in Europe where several businesses act in concert. In this situation, the goods are sold to a series of companies, before being exported again. The goods therefore go round in a 'carousel'. This is best explained by way of an example.

Consider a trader based in the UK. He buys from France a consignment of mobile telephones for £1,000,000. He pays the French telephone manufacturer for the goods. The goods are then shipped to a dock in the UK. No VAT is charged on that shipment. The trader now sells those telephones to a conspirator, for £1,100,000. He charges 17,5%VAT (the standard VAT rate in the UK) and the conspirator sends £1,292,500 (being the price of the goods plus the tax) to the trader. This conspirator then sells the goods to a third conspirator for £1,200,000, charging VAT on that sale. The third conspirator pays £1,410,000 to the second. This may continue for many conspirators; however three will suffice for an example. The third trader now sells the telephones to a German company, which may well be innocent. No VAT is charged, and the sales price of £1,500,000 paid by the German company without VAT. So far the conspirators have made a profit of £500,000 perfectly legitimately on buying and selling mobile telephones.

In an honest operation the first trader would pay £192,500 to HM Revenue and Customs (the UK's VAT collection agency). The second trade has collected £210,000 in VAT, but paid £192,500 in VAT, and therefore only has to pay the difference (£17,500) to HM Revenue and Customs. The third trader has charged no tax on its sale, but has paid £210,000 in VAT, and can therefore reclaim £210,000 from HM Revenue and Customs.

In the fraud, the first business vanishes, without paying the VAT to HM Revenue & Customs. When the last business in the chain collects £210,000 on the export, all of the businesses can vanish, £192,500 better off at the expense of HM Revenue and Customs. As this business is removed from the vanishing party it is hard for HM Revenue and Customs to show the links in the chain, and thereby refuse to refund the VAT on the export.

These guys don't just not pay tax they get the government to pay them instead.

[Dr. Love]

exempt income taxing families making less than 250k and I'd support it.

[LoungeMachine]

This might be what it comes down to, which sucks.

Look at anything other than government, when times get tough spending is cut, when it comes to our ass-backward gov't, we try to spend more and raise taxes.

They need to cut the fat, and when that is done if we still need to extra tax then put in the VAT.

I wish for once you knew what you were talking about, instead of spouting tired cliches you've heard.

By "fat" are you referencing the Bush Tax Cuts? The 2 wars? The interest on the debt?

What EXACTLY should have been cut over the last 10 years?

[dont answer for him, FORD, I'd like him to come up with his own answer for ONCE]

[Seshmeister]

What we need is progressive taxation with no loopholes for the rich.

I don't think that's actually possible.

[LoungeMachine]

I don't think that's actually possible.

Maybe.

But it's probably a helluva alot easier to implement and enforce than a VAT.

I agree with FORD, that we wouldnt need talk of a VAT, or cuts in SS, Medicasi, Medicare, infrastructure, et al if we just made the uber rich and corporations actually pay what they owe.

Look at KBR / Hallibutron for Christ's sake.

Take hundreds of billions in government contracts and then move the HQ offshore to fucking Dubai? wtf?

[kwame k]

True and by our own Government's account something like 90% of big businesses don't pay the taxes they should. GAO report http://www.gao.gov/new.items/d08617.pdf link again. Wish these guys would actually read some of the links we post.

[LoungeMachine]

. Wish these guys would actually read some of the links we post.

Easier for them to just get the daily talking points from Rush Hannity.

[kwame k]

Easier for them to just get the daily talking points from Rush Hannity.

True but what is really frustrating is that this isn't a big issue or gets little to no news attention. I really don't see Obama or anyone else as having the balls to address this.

Our own Government knows this goes on and only issues a report about it every now and then

[LoungeMachine]

I remember him talking at a PC recently about tightening corporate loopholes and tax fraud.

Haven't heard squat since, though.

Imagine if we put the same emphasis on a WAR ON CORPORATE TAX FRAUD as we did on drugs. Locking up, not fining or slapping the wrists of these crooks.

[kwame k]

I remember him talking at a PC recently about tightening corporate loopholes and tax fraud.

Haven't heard squat since, though.

Imagine if we put the same emphasis on a WAR ON CORPORATE TAX FRAUD as we did on drugs. Locking up, not fining or slapping the wrists of these crooks.

Seriously, I have a feeling it will never happen. Between the lobbyist and the big money donations, I don't think it's politically expedient to do so.....if you want to get reelected, that is.

[sadaist]

I thought your sales taxes were local. We don't have sales tax. It would be hard to take say 20% VAT plus 9% Sales Tax.

Taking your hypothetical numbers of 29% on purchases, please remember that those purchases are made with any money we have left after Federal & State income taxes of around 30%.

If you're taxed at 30%, you take home 70% of what you earn.

Then of that 70%, anything you buy is another 30% tax.

Don't forget property tax if you're lucky enough to own anything.

And don't invest your money, those earnings are taxed quite high, and there is a huge tax penalty when you withdrawal your money. Don't spend it though, or you're right back at sales taxes.

These people that love taxes don't think it's a big deal because it's only another 1%, or only another 2%. Well, after enough 1% & 2%'s, you're gonna hit 100%. Then what? It's not like the government will suddenly stop spending more than they have. I know, amnesty for all illegals...they oughta be good for some taxes.

Sorry, every time I hear about another tax being forced upon us it makes me sick. I'd go out and protest, but I'd be branded a racist by the libs. I don't care if the President is black, brown, white, yellow or red. The only color I care about is green.

[kwame k]

But Sadie when you think about it we need taxes. You don't go to a restaurant and eat a meal and then bitch about the fact they give you a bill at the end of it. When I dial 911 I want a cop, fireman or ambulance there now. When I jump in my Jeep I want the interstate to be pot hole free. So really it's about paying for a services provided.

Look I hate fucking taxes but I do understand I have to pay for the services I use.

[sadaist]

What EXACTLY should have been cut over the last 10 years?

How about $689,000+ per year San Diego is spending for one contractor to play recorded dog barking noises to drive away a seal colony from a popular swimming area?

That's one example of what I'm sure my city has hundreds if not thousands of. And I'm sure every single city and town in America has crazy bullshit spending like that going on...as well as the Federal Govt who gives the states money. But when they fall short on dollars, they raise taxes or impose new ones or they threaten to cut health care, teachers, firemen & police officers.....instead of all the bullshit. Oh yeah, they'll also have to release violent prisoners out on the streets. That's one of my favorite scare tactics.

[sadaist]

But Sadie when you think about it we need taxes. You don't go to a restaurant and eat a meal and then bitch about the fact they give you a bill at the end of it. When I dial 911 I want a cop, fireman or ambulance there now. When I jump in my Jeep I want the interstate to be pot hole free. So really it's about paying for a services provided.

Look I hate fucking taxes but I do understand I have to pay for the services I use.

I agree and I pay my taxes. But I don't agree with a soda tax to pay for obese people's health care. If they wanted to be fair, they would weigh a person when they make their purchases and tax them accordingly.

And you speak as if all our tax money goes to noble causes. It surely does not.

[sadaist]

You don't go to a restaurant and eat a meal and then bitch about the fact they give you a bill at the end of it.

It's called the Dine & Dash.