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Speaker Pelosi And The VAT: Cluelessness On Display

After Speaker of the House Nancy Pelosi's press conference horror show", in which she simultaneously accused the CIA of lying to her while she retreated from her own podium, it was safe to assume that her keepers advised her to go silent and deep for a while.

But cluelessness, the primary element of which is hot air, can not remain submerged indefinitely in a political climate like Washington DC and today the obtuseness reared its ugly head again when the Speaker tried to discuss the Value Added Tax (VAT). Here it is in full, so that tax payers savor the full flavor of the drink Pelosi intends to serve (I've bolded the low hanging fruit):

A new value-added tax (VAT) is "on the table" to help the U.S. address its fiscal liabilities, House Speaker Nancy Pelosi (D-Calif.) said Monday night.

Pelosi, appearing on PBS's "The Charlie Rose Show" asserted that "it's fair to look at" the VAT as part of an overhaul of the nation's tax code.

"I would say, Put everything on the table and subject it to the scrutiny that it deserves," Pelosi told Rose when asked if the VAT has any appeal to her.

The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.

Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes.

"They get a tax off of that and they use that money to pay the healthcare for their own workers," Pelosi said, using the example of auto manufacturers. "So their cars coming into our country don't have a healthcare component cost.

"Somewhere along the way, a value-added tax plays into this. Of course, we want to take down the healthcare cost, that's one part of it," the Speaker added. "But in the scheme of things, I think it's fair look at a value- added tax as well."

Pelosi said that any new taxes would come after the Congress finishes the healthcare debate consuming most lawmakers' time, and that it may come as part of a larger overhaul to the tax code.

The Speaker also emphasized that any reworking of the tax code would not result in an increase in taxes on middle-class Americans.


VAT proponents have long argued that such a tax scheme works only in the context of it replacing the progressive tax code. Implementing the VAT while maintaining the present progressive tax code is, simply, a massive tax increase. Speaker Pelosi believes that a VAT would "level the playing field" because it would pay for ObamaCare, which would lower over all costs yada yada yada. And it wouldn't result in a tax increase on middle class Americans.

Some one needs to tell Speaker Pelosi that Americans quit believing this sort of cant sometime around March of this year.


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Comments (39)

If anyone believes ... (Below threshold)
irongrampa:


If anyone believes a VAT wouldn't piggyback on existing taxes, then that oft-sold bridge is on the market again.

"(I've bolded the low h... (Below threshold)
Marc:

"(I've bolded the low hanging fruit):

Isn't "low hanging fruit" and Pelosi synonymous?

"Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes.

gee she says "their governments provide those services," at what cost nitwit. She better check the Japanese tax rate that in large part is because of that "free" health care.

In Japan a person making a bit over 30,000 us dollars pays 20 percent, plus 4% for Prefectural Income Tax, 6% Municipal Income Tax, plus 3% to 5% for those self-employed.

The current Consumption Tax [ the VAT] rate is 5% (4% national, 1% prefectural).

P.S. How do you "level the playing field" when her VAT would also be applied to those buying foreign cars, not to mention the 6.5 tax levied on imported cars now.

There's no amount of talkin... (Below threshold)
Daman:

There's no amount of talking that can be done to persuade the likes of Pelosi and at this point in my life, I don't think there can be much to be done or said to persuade most anyone in a government office.

I suppose that's because persuasion in the opposite of the very essence of government. Government is force. When a person cannot persuade another, something which is voluntary, then they petition the government to force others to do what they could not persuade them to.

Like paying for other peoples college to paying for inmates sex changes.

It's tragic because of all the victims it produces, conscience tax dissenters are treated with more brutality than terrorists, in fact, tax protestors are CONSIDERED terrorists now.

I found a nifty game online that at least in the virtual world you can bring treasonous elements of the federal government to justice for their crimes against free humanity and the people of these united States. You can find it by googling "usofearth", it's a political satire with the plot along the lines that Obama has usurped the Constitution and has attempted a coup of the US.

"level the playing field"</... (Below threshold)
GarandFan:

"level the playing field"

HOW? It's going to hit "the poor" hardest, or do they get a special ID card exempting them?

Hell, let Nancy push it and pass it. That will guarantee a 2010 bloodbath.

I can see Nancy's 'handlers... (Below threshold)
GarandFan:

I can see Nancy's 'handlers' screaming at each other about "Who's turn was it to watch her!".

Please Please let me reiter... (Below threshold)
JustRuss:

Please Please let me reiterate. THIS IS NOT THE SAME AS THE FAIR TAX!

The Fair Tax would replace Income Taxes all together with a sales tax that everyone pays every time they buy a new product. It would show on your reciept as a sales tax and you would only pay taxes on money you spend, not money you earn. Plus the poor would get a prebate every year to offset the extra tax they pay on everything they buy.

This VAT gets added to every nut and bolt along the way increasing the cost to manufacture EVERYTHING. This would be in addition to any income taxes you are paying and just like every other tax on business it gets passed on to the consumer.

Tell me again how this is not a tax increase on the poor?

VAT is a direct tax on prod... (Below threshold)
Mac Lorry:

VAT is a direct tax on productivity. Even considering such a tax during a recession really is clueless. Not surprising it's Pelosi who's considering it.

NANCY IS DELUSIONAL! But wh... (Below threshold)
kathie:

NANCY IS DELUSIONAL! But what would she know about taxes, her husband earns squillions, she has a check book.

I wish somebody would take ... (Below threshold)
bobdog:

I wish somebody would take pity on these fools in Congress and send them a copy of Principles of Economics.

By its very definition, a Value Added Tax is patently regressive. It inevitably impacts the poor more severely than the rich, which runs counter to every leftwing loon theory we've heard for the past fifty years.

It's incredible to me that Pelosi is so hungry for more revenue that she doesn't see it.

There is only one way out of this recession, and that is to cut taxes across the board, for everybody. And that means that Utopia is going to have to fricking wait a while.

Hey JustRuss, you forgot to... (Below threshold)

Hey JustRuss, you forgot to mention the best part about the FairTax: while SSI, FICA, and federal withholding would no longer be taken from the paycheck of everyone who earns one, prices of goods and services would remain approximately the same as they do now. It's more progressive than taxing the rich, and yet it's more friendly to business!

And if we upped the rate from 23% (30%) to 25% (33%), we could pay off the national debt in a very short time, and start bringing the rate back down to 23%, possibly even less.

In about 13 months the vote... (Below threshold)
Gmac:

In about 13 months the voters are going to send Nancy a free retirement package...

Even though she and Harry Reid are gifts that keep on giving its all tax & spend and in a down economy less taxation is more stimulating than directed spending that ends up in their friends bank accounts.

With any luck upwards of 60 or more Democrats and RINO's will discover that the voters don't care for their BS any more either.

OOPS! Looks like the bitch ... (Below threshold)
914:

OOPS! Looks like the bitch queen is tripping on botox again!

Tell Pelosi, the American p... (Below threshold)
therealmccoy:

Tell Pelosi, the American people will go along w/the VAT when Congress & the President work w/out salarie and give up their govt.healthcare OR when pigs FLY!

"VAT proponents have lon... (Below threshold)
Victory is Ours:

"VAT proponents have long argued that such a tax scheme works only in the context of it replacing the progressive tax code."

Nonsense, which is why you didn't quote anyone on the subject to back up your claim.

Nice strawman.

A VAT can be an incremental tax added on top of a progressive tax system like ours, especially where excess consumption is contributing undesirable effects in the economy.

There is absolutely no credible body of information suggesting that it has to replace the progressive tax code.

Eventually it may be desirable to replace part of a progressive tax system with a VAT but that's a choice not a mandate.

The VAT was floated by Clinton as a way to pay for the health care reform discussed in the 90s. No surprise then (and no great mysterious revelation) that it has reappeared.

Really - your hatred of Pelosi is so transparent.

Vic

"VAT is a direct tax on ... (Below threshold)
Victory is Ours:

"VAT is a direct tax on productivity. Even considering such a tax during a recession really is clueless. Not surprising it's Pelosi who's considering it."

I hope you were squatting when you let that one go so as to not soil your pant leg.

VAT is a tax on consumption, not "productivity".

Vic

especially where excess ... (Below threshold)
HughS:

especially where excess consumption is contributing undesirable effects in the economy.

Care to offer an example of that in today's economy?

"The Speaker also emphas... (Below threshold)
P. Bunyapn:

"The Speaker also emphasized that any reworking of the tax code would not result in an increase in taxes on middle-class Americans."

You lie.

They all lie...

"Care to offer an exampl... (Below threshold)
P. Bunyan:

"Care to offer an example of that in today's economy?"

I think they mean things like eating too much, smoking, drinking, buying guns and ammunition, driving, heating your home, attending NASCAR events... you know, all those nasty horrible things that so hurt our economy.

"The VAT was floated by Cli... (Below threshold)
DaveD:

"The VAT was floated by Clinton as a way to pay for the health care reform discussed in the 90s. No surprise then (and no great mysterious revelation) that it has reappeared."

Yes, it is in fact a mystery. It was a bad idea then and it is an even worse idea now.

"Really - your hatred of Pelosi is so transparent."

I don't know about about Hugh, but yes, it is becoming harder for me to hide my distain for this woman. And yet I am completely at peace not apologizing for it.

Vic -I imagine it'... (Below threshold)
JLawson:

Vic -

I imagine it's hard for you to understand this, since it seems you have a very difficult time with anything resembling nonconformance to your world view... but it's really very simple.

DISAGREEMENT DOESN'T EQUAL HATE.

DISAGREEMENT DOESN'T EQUAL RACISM.

DISAGREEMENT IS PATRIOTIC.

That last has been very firmly established by the left for the last 8 years!

You really have to let go of the hate, Vic. Your projecting it onto the motivations of everyone who disagrees with you shows a LOT about how hate-filled you are.

Sure, it's difficult to get to the point where you can acknowledge that you have that hate, but until you do you'll never be able to get a handle on it - and you'll see it in everyone around you who doesn't adhere to your thinking. Denial ain't just a river in Egypt, ya know.

And realistically, with your hate how different are you from the jihadists who hate so much that they turn themselves into walking bombs to kill and maim those who don't agree with their theology? A matter of degree, surely - but do you hate the 'haters' so much that you'd destroy anyone who doesn't agree with you? See them jailed? Or simply stripped of any freedom of speech?

That's what I found uncomfortable about the left a good 30 years back, Vic. It's not enough to simply disagree, you have to hate those who disagree. And you have to destroy and discredit them if at all possible - no compromise is allowed. And from the way you come off on-line, you've been taught that lesson very well indeed.

Things haven't changed much since then, except I started seeing in the early '80s just how much that philosophy wasn't working. It takes a while to unlearn... and I think you're already starting to see that it's not all it's cracked up to be in the first place.

Come to the Dark Side, Vic. You know you want to.
Besides... we have cookies.

vic - "VAT is a tax on ... (Below threshold)
Marc:

vic - "VAT is a tax on consumption, not "productivity"."

Hey dipshit, how in the friggin' hell do you plan on taxing "consumption" unless someone, anyone produces something.

You might "get something, for nothing" and to some "the chicks are free," but that ain't the real world.

Whenever this woman opens h... (Below threshold)
Glenn Cassel AMH1(AW) USN Retired:

Whenever this woman opens her mouth, I hear the whistling of the wind. Even on a dead calm day. I guess the simple arithmetic involved with a VAT just flat escapes her. I am not an economist or an "enlightened" member of the congress but I am smart enough to know when the current leadership is blowing smoke up my ass.

Damn. I hate to agree with ... (Below threshold)
bobdog:

Damn. I hate to agree with Vic.

VAT likely WILL be a tax on top of everything else. What's the point of a new tax except to raise new revenue?

On the other hand, that pretty much dispenses with the "not one thin dime" argument Obama's been relying on to hustle health care reform.

And, there's no disputing the fact that VAT is a regressive tax. Just how you enact a national sales tax on each stage of production and not pass the tax on to "the middle class" as Harpy-At-Arms Pelosi suggests is just one of Life's Little Mysteries.


Vic, Are you real... (Below threshold)
DavidB:

Vic,

Are you really that stupid that you didn't even read the posting? Really?

You said, "I hope you were squatting when you let that one go so as to not soil your pant leg.

VAT is a tax on consumption, not "productivity"."

Now, from the article, "The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.

You see there Vic, they are taxing the value added at each stage of production for each producer of product.

That's the basic definition of Value Added Tax Vic, get a clue, it's taxing the value added through production of the item. Of course the tax will be passed on to the consumer in higher prices for items, and then we will get to pay sales tax on the item as well. Wow, what a wonderful system.

Of course you are a kool aid drinker and think that every tax scheme like this is great.

VAT is at best a flat tax a... (Below threshold)
JustRuss:

VAT is at best a flat tax and easily becomes a regressive tax. A quick look at the wiki will confuse the hell out of you, which means VAT is a perfect compliment to the current tax code. They are both bullshi*.

Get rid of the current tax code all together and go to a national sales tax. FairTax FTW.

VAT taxes every step along the way and everyone has to keep track of what the people they purchased parts from paid in value added. Eventually ending up at the consumer who pays a very small portion of the tax themselves as well.

The problem is who the hell is going to keep track of this stuff? Lawyers and Accountants thats who. The stuff that is produced will have a premium added to pay for that PLUS the VAT. Its a snowball effect and in the end it all gets passed on to the consumer, and in the end it will disproportionately affect the poor and middle class.

"You see there Vic, they... (Below threshold)
Victory is Ours:

"You see there Vic, they are taxing the value added at each stage of production for each producer of product."

You say the words but clearly you don;t know what they mean.

(1) The tax is passed on to the consumer and (2) each of the suppliers, producers or manufacturers claims back the VAT that was paid by them individually.

Just because the word "production" is in the description that doesn't make it a "tax on productivity" as asshat said.

It's a consumption tax that is levied fractionally at each stage throughout the supply and production chain.

Really.

"Of course you are a kool aid drinker and think that every tax scheme like this is great."

Bite me. VAT has a place in the tax code. Whether it should be applied here and now is worth debating. Debating the definition is kinda silly.

Vic

I said "especially where... (Below threshold)
Victory is Ours:

I said "especially where excess consumption is contributing undesirable effects in the economy."

Hugh said "Care to offer an example of that in today's economy?"

Sure. Excessive reliance on imported oil.

Sale of gas-guzzling SUVs increases oil imports, increases pollution, increases pollution-related health problems, increases health care costs, increases military costs to police oil-production zones, etc. etc. etc...

One solution - Put a VAT on gas guzzling SUVs.

But instead of just slapping a tax on the SUV when its sold (that's a sales tax) you tax each of the stages of the vehicle's production fractionally, as each stage 'adds value' to the raw materials.

It's still a consumption tax, it's just collected throughout the supply and production chain. Ultimately it ends up being paid by the consumer because it ends up in the price of the SUV.

Vic

"And it wouldn't result ... (Below threshold)
Oyster:

"And it wouldn't result in a tax increase on middle class Americans."

I'm so sick and tired of hearing that. It's just become a throwaway line for these goons because it's absolute horseshit.

Vic -"Sure. Excess... (Below threshold)
JLawson:

Vic -

"Sure. Excessive reliance on imported oil."

And just WHO (cough-cough-Pelosi-cough-Reid) are doing everything they can to ensure that reliance continues?

But hey, as long as you can squeeze out some more tax money, it's all good - right?

Sale of gas-guzzling SUV... (Below threshold)
iwogisdead:

Sale of gas-guzzling SUVs increases oil imports, increases pollution, increases pollution-related health problems, increases health care costs, increases military costs to police oil-production zones, etc. etc. etc...

One solution - Put a VAT on gas guzzling SUVs.

Liberals love to control people through taxes, but Pelosi didn't mention this. She talked about using the VAT to "help the U.S. address its fiscal liabilities" and to "level the playing field"(?).

Guess what happens when taxes increase the cost of our manufactured goods--fewer of the goods are sold and people working in those industries are laid off. That would be the goal of a VAT tax imposed on "sale of gas-guzzling SUVs," wouldn't it--to discourage folks from buying them? Fewer goods sold, less collected in VAT tax. So, Vic and Pelosi are at odds here. Vic wants a VAT to save the environment, Pelosi wants a VAT to raise revenue. At any rate, increasing any taxes in the face of a slowing economy is just plain nuts.

Pelosi's claim that a VAT will "level the playing field" is too goofy to warrant a response.

Re: "A new value-added tax ... (Below threshold)
Hank:

Re: "A new value-added tax (VAT) is "on the table" to help the U.S. address its fiscal liabilities, House Speaker Nancy Pelosi (D-Calif.) said Monday night."

Fiscal liabilities?

What a dishonest loon Pelosi is.

She and her party have spent us into oblivion and the term she uses for their irresponsible governance is "fiscal liabilities"?

How's that luxury tax on ya... (Below threshold)
engineer:

How's that luxury tax on yacht that Congress enacted a few years ago doing? Didn't that accomplish the same thing. Less revenue, jobs lost and US businesses destroyed.

Thank God!Vic came t... (Below threshold)
SER Author Profile Page:

Thank God!
Vic came through with some inane comments! Provided the daily humor that I look for in our trolls.

Here in Ireland, we pay any... (Below threshold)
firefirefire:

Here in Ireland, we pay anywhere from 12% to 21.5% VAT on goods and services except food, although if you have dinner out you also pay VAT on prepared foods.
This is on top of income tax and all the hidden fees and licence costs from car registration to Television ownership.
It costs me 160 euro a year to own a TV!!!

Kill the VAT!
you'll be glad you did

Don't worry Fire,if Obama a... (Below threshold)
Rich:

Don't worry Fire,if Obama and the Dems work it out then it will be good for all america. Just because they say so. glug glug.

Rich

Taxes should not be used to... (Below threshold)
JustRuss:

Taxes should not be used to control lifestyle! That is not the role of government! Taxes should ONLY be used to provide working capital for the government and the federal government should play a small roll in the running of the country. What they Feds should do is maintain infrastructure, maintain a military that can defend the country (not police other countries for the UN), a Navy that can protect shipping (not pretend to be a missile shield), and fund the essential parts of the government (ie just the legislative, executive and judicial branches that are needed at a minimum level to maintain order and enforce the law).

Federal Government should not be involved in feeding/housing/paying the poor, healthcare (except in minor regulation), business (see healthcare) or any other sector of the economy. They should not try to keep people from smoking or drinking or eating fast food by taxing the hell out of those goods. Lifestyle is a choice and if Americans want to live a fun filled life that only lasts 60 years they should be able to do that! Freedom means living with your life choices.

Income Tax increases on the Rich only work until the Rich take their money and leave, then where will you get the money? VAT will only work to control consumption of raw materials by decreasing demand for them based on artifical price hikes(taxes) that are passed on to the consumer. And in the end YES that will affect poor and middle class more than the rich because a disproportionate amount of money will be spent by them compared to the rich.

FairTax for all, its still disproportionate but everyone pays into the system and if the rich guy stuffs a matress or keeps money in a savings account rather than spend it, it makes my money worth more. It is automatic deflation (I understand it is only to a point)

I don't believe we live in ... (Below threshold)
Marie:

I don't believe we live in a democracy any more. Our elected representatives live like kings and queens, take bribes (aka campaign contributions), have extraordinary benefits (like "fact finding" trips abroad and private tax-payer funded jets)and keep voting for tax hikes to fund our over-bloated government. They do all this in full view of the public and then keep getting re-elected. I'd like to start a website called throwthebumsout.com. It would advocate voting against every incumbent in every election. The new representatives will probably be almost as bad as the old ones, but then they can be turned out of office the next time around. Corruption should not be rewarded.

"I'd like to start a websit... (Below threshold)
914:

"I'd like to start a website called throwthebumsout.com."

Lol Marie..

How about HangEmAllHigh.org? Or, BackTaxCheatEliminators.com? Or, WeAreBottomFeederEviscerators.com? I know there not as worthy as Your suggestion.. But Im just getting warmed up.,. ha ha

Ms. Pelosi has as much of a... (Below threshold)
dnb:

Ms. Pelosi has as much of a handle on financial matters (perhaps because she has so much money she never needs to worry about a lack thereof) as she has on the Catholic Church's view of abortion.




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