Value-Added Tax... Stimulating?

[FlyingTiger]

I had no idea that there was anybody going around preaching that a VAT would actually be good for the economy. But the notion that I should pay 10% more for my purchases gets appropriately shredded below:

http://www.meltingpotproject.com/mpp/2009/10/i-award-you-no-points-and-may-god-have-mercy-on-your-soul.html">Full Article

(Excerpt)

Debate about a value-added tax has picked up in recent weeks, as those worried about the government's balance on its Chinese Express card have tried to figure out how in the world we're going to pay our enormous bills. Most onlookers worry that such a tax would deliver yet another blow to an economy that has already taken more hits than Snoop Dogg at a medical marijuana convention. But at least one man - Bruce Bartlett, economic advisor and top-notch Rush Limbaugh impersonator - argues that a VAT would actually be the greatest idea since the housing bubble:

"Suppose you had a 10 percent VAT and we said we weren't going to collect it for the next 10 months. People would buy like crazy. They'd buy toilet paper, they'd buy anything they could get their hands on that they knew they'd need in the future. We're depriving ourselves of a great stimulant tool by ignoring this."

Bartlett is right, of course. People would buy things like crazy before the tax went into effect. And then, 10 months later, everybody would continue their normal spending (except at a 10% higher rate, of course) and use the huge stash of all the stuff they'd stored up to, I don't know, build a toilet paper fort for their canned soup or something.

....

This is completely idiotic. A national sales tax as a form of STIMULUS? I just took a pay cut, I don't want prices to jump 10%, thank you very much.

[Art_from_Ark]

1. I've always wonder why it's called a "value"-added tax

Since it is not adding any value, only cost.
So "CAT" (cost-added tax) seems more appropriate.

[aquart]

2. It's regressive and rotten.

Anything to avoid taxing the rich.

[FlyingTiger]

3. It's extremely regressive.

But I guess "more consumer debt" equals "giant economic win" to some people.

[westerebus]

4. I prefer a stock tax.

One cent on each share traded. 524,000,000 shares traded x .01 = 5,240,000. Now you would have to use it to fund the national debt and for that purpose only until it's paid off.

Wishful thinking on my part.

[Joanne98]

5. It's the cons long term plan for taking the debt off the rich and putting the burden on the poor.

And the middle class. Tell that to the red-headed lady whining about soda tax!