Wednesday, April 07, 2010

Paul Volker: Value Added Tax

Remember all those promises candidate Obama made about how his programs would not increase taxes on anyone making less than $250,000 per year? President Obama's economic advisor is now floating the idea that a Value Added Tax may be necessary.
A general tax applied at each point of exchange of goods or services from primary production to final consumption. It is levied on the difference between the sale price of the goods or services (outputs) to which the tax is applied and the cost of goods and services (INPUTS) bought in for use in its production...At each point of exchange the tax is passed on in the form of higher prices. Being at the last point in the chain of exchange, the final consumer bears the whole tax.(Dictionary of Political Economy).
Volker is also proposing a "carbon and energy" tax.


Anonymous said...

But P-BO isn't taxing people, he's taxing value. And who needs that?

professor ed said...

The truly disgusting aspect of this VAT plan is that it would be IN ADDITION to our current income tax. IF we abolished the latter, I might actually go for the VAT.