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View Diary: Killing Sacred Liberal Cows, or What Economists Think About the Economy (105 comments)

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  •  please explain how VAT and Carbon tax can be made (1+ / 0-)
    Recommended by:
    FishOutofWater

    progressive?

    Over 20 years I've listened to advocates of a VAT, no one has convinced me its possible. No one has convinced me it wont contract the economy and make income disparity worse.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Thu Nov 15, 2012 at 01:06:10 PM PST

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    •  Depends on whether it's used for deficit reduction (0+ / 0-)

      Here's a short summary on the carbon tax: http://www.carbontax.org/...

      Basically the idea is that rebates would mitigate the impact on low-income households and actually make it more progressive. Of course, that means it can't be used to bring down the debt which is a reason why it's unlikely to come up in the current "fiscal cliff" discussions. It would have to be revenue neutral. And, of course, there are the concerns of implementing that unilaterally without China or other emerging economies on board which might have very unpredictable and harmful effects on the US economy.

      I'll get back to you about the consumption tax - I might also write a diary later about different tax policies that might work including VAT.

      •  Ahem, lets stimulate the economy first (0+ / 0-)

        cause the carbon tax is going to initially slow the economy down.

        Incentivize capital flow to Wind, Solar, HVDC supergrid, pumped hydro & Solar thermal storage.

        Once the infrastructure to actually make this stuff in the US has been established, start applying the carbon tax.

        And throw that VAT idea into the garbage with the gold standard.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Thu Nov 15, 2012 at 01:35:49 PM PST

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        •  Sure (1+ / 0-)
          Recommended by:
          Roger Fox

          Yes, stimulatory measures at this point are needed more. However, the sooner we could implement the carbon tax the better. I don't see it happening any time soon but the longer we wait, the more we're just kicking the can down the road (cap and trade is even more unlikely and has some problems of its own)

          And VAT is not a terrible idea if it's done along with other fundamental changes to the tax code (to make it more progressive). Is this likely to happen? Am I an enthusiastic advocate of VAT? No. But to say VAT is like the gold standard is ridiculous (Europe has something to say to you).

          •  How to make a VAT progressive (0+ / 0-)

            Well, 47% dont pay a net income tax, right, so to approach that same figure, 47% need to not pay a VAT, in fact some people make out quite well with the Earned Income tax credit.

            SO folks who get money back, when they buy something the VAT has to give them money......

            And thats just the basics of dealing with making a VAT somewhat similar for households making 50k or less.

            Then the 200k Ferrari needs a good 200k-400k VAT

            Cause some working class dude gets a rebate, cause he has a job that when we had income tax he got 1k back.

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Thu Nov 15, 2012 at 03:39:33 PM PST

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