Replying to a message of Jeff Binkley to Bob Ackley:

Obama suggests value-added tax may be an option

Only if the congress abolishes the income tax and the
states ratify the repeal of the Sixteenth Amendment.

Steve Forbes and I have had that very discussion a number of
times for the flat tax and VAT. He is for repealing the
16th amendment and putting in a flat tax, period. Not
repealing it will allow Congress to make it incremental.

Not repealing it will allow the congress to re-establish the income tax, period.
The federal income tax was declared unConstitutional back when Lincoln tried it,
that's why there's a 16th Amendment (which only says that congress can tax incomes; estates are *not* incomes). If you want the income tax (I don't) you could amend the amendment to force the tax rate to be a fixed rather than incremental.
.

---
* Origin: Bob's Boneyard, Emerson, Iowa (1:300/3)

In the future 20% will not be enough. Count on it...

============================================

http://www.timesonline.co.uk/tol/news/politics/article7025833.ece

The Times February 13, 2010

New tax bombshell: 20% VATRoland Watson, Suzy Jagger and Rachel
Sylvester

A rise in VAT is looming whichever party wins the general election, as
Labour and the Conservatives draw up plans to balance BritainÆs books.

Alistair Darling and George Osborne, the Shadow Chancellor, are both considering raising VAT to as high as 20 per cent ù the European average
ù from the current rate of 17.5 per cent, The Times has learnt.

Doing so would raise an extra ú13 billion a year at a time when
financial markets are searching for signs that whoever takes power is
serious about tackling BritainÆs ú178 billion deficit.

Though Labour and the Tories have denied having any current plans to
increase VAT, neither will rule it out and The Times understands a rise
in the tax is being considered by both parties.

One City source close to the Tory tax team said: ôThere is a view across
the Conservative Party that VAT is going to have to go up.ö

The Chancellor is also keenly aware that Britain needs to retain the confidence of the credit-rating agencies. He has privately ruled out
either raising income taxes or increasing the scope of VAT, but has deliberately left open the possibility of increasing the sales tax in
the next Parliament.

It is understood that there are discussions in the Treasury about
whether the Government should abandon its deliberate pre-Budget opacity
and instead look to win points for honesty by admitting that VAT may
have to rise.

Ken Clarke, the Shadow Business Secretary, told The Times that any post- election cuts imposed by a Tory government would be worse than the
squeeze of the early 1980s. ôWe are going to have to be much tougher on
public spending than Margaret Thatcher ever was,ö he said.

Asked about VAT, Mr Clarke told The Times: ôWe are vague about tax
increases because we donÆt like them.ö

David Cameron signalled that he would go into the election seeking to
distance himself from the inevitable economic pain that was to follow.
ôThe cuts that are coming, make no mistake ù they are Gordon BrownÆs
cuts,ö he told the Scottish Conservative conference in Perth yesterday.
ôThat is his inheritance to Britain.ö

His comments came as the latest indicators from the eurozone suggested
that the economic recovery may be stalling.

The German economy, EuropeÆs largest, failed to grow at all in the last
three months of 2009 after two quarters of growth. The eurozone as a
whole grew by only 0.1 per cent, a slowdown from 0.4 per cent growth in
the previous quarter. Italy slipped back into negative growth and Spain
and Greece remained in recession.

CMPQwk 1.42-21 9999
Hope and change = $1T deficit and 10%+ unemployment .....

--- PCBoard (R) v15.3/M 10
* Origin: (1:226/600)