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Author: TMFCop Big gold star, 5000 posts Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46826  
Subject: Re: Saving in a Nation of Spenders Date: 4/16/2004 7:09 AM
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From my understanding of a value-added tax (VAT) and how it works in Britain and Europe is that it gets quite expensive and complicated in determining where the "value" is added along the way.

The bolt manufacturer pays a VAT as does the plate manufacturer to which the bolt is fastened as does the car manufacturer to which it's all fastened, etc. A Starbucks may have a smaller VAT because it's only paying once (we'll discount the cups and coffee beans and the grinders, etc. to make the coffee), but other more complicated arrangements are imposed upon far more heavily.

Equally unworkable and fanciful, but still my favorite, is a real flat tax. If I gotta pay taxes (hey! someone's gotta pay my salary although I'm reminded almost daily when I make a motor vehicle stop--"Hey buddy! Don't you know I pay your salary?"), I'd favor a flat rate of say 10%-15% with zero deductions and adjustments. No mortgage deduction. No IRA deduction. Everyone, everywhere pays a simple flat rate. There'd be no tax dodges. No offshore havens necessary. No, big, unwieldy, costly bureaucracy.

But politicians, regardless of party affiliation, love to dole out breaks and special favors. Tweedledum and Tweedledumber. If they can't hand out tax dollars to their favored constituents, why, there'd be little need or use for politicians. A return to the concept of citizen legislators, instead of a professional class of politician. Hmmmm. It can't happen, but it's nice to think about the possibility anyway.

Sorry for the rant. I'll be sidling over to the Political Asylum board now...

Rich
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