Americans of GTPlanet, how would an extra $1,000 a month impact you?

[CodeRedR51]

Can't say about money just given to me but I just got a promotion at work that included a $12k a year raise and it will have a pretty big effect when I change apartments next year. Can finally raise my rent budget a little and it won't be as hard to find a place when 1 bedroom units are frequently going for $1,100 a month.

 

[Biggles]

Whenever you pay.



New York is late to the party, but their law took effect in June.

https://nypost.com/2019/04/04/online-shoppers-will-soon-have-to-pay-sales-tax-in-new-york/

This is news to me. In September I bought a kitesurfing foil from a company in France. Shipped to NY state. Did not pay French VAT because it was shipped outside the EU. Was not charged NY sales tax. In October I also bought a kitesurfing foil board from a company in NC. Was not charged NY sales tax (or NC sales tax for that matter). In October I also bought a helmet from Oregon on EBay. Was not charged NY sales tax (or Oregon sales tax). As I was away from Canada for more than one week in both September & October, did not have to pay Canadian VAT (called HST) when I brought the goods into Canada (valued up to $800).

VAT is a national tax which is paid at each resale of an item (or item's components) - literally on the "value added" at each point of sale. So ... a lumber jack collects tax on the cost of a tree sold to a lumber yard, the lumber yard collects tax when the the wood is sold to a furniture manufacturer, the furniture manufacturer collects tax when the chair is sold to a wholesaler, the wholesaler collects tax when the chair is sold to a retailer, the retailer collects tax when the chair is sold to a retail customer. The tax collected at each stage is paid to the government, but reclaimed by each (VAT registered) seller except the end retail buyer who ends up remitting tax for the final sale price of the chair. It's a system that requires a lot of paperwork, but it's "fair" & hard to avoid the tax as there is a paper trail.

 

[Rallywagon]

This is news to me. In September I bought a kitesurfing foil from a company in France. Shipped to NY state. Did not pay French VAT because it was shipped outside the EU. Was not charged NY sales tax. In October I also bought a kitesurfing foil board from a company in NC. Was not charged NY sales tax (or NC sales tax for that matter). In October I also bought a helmet from Oregon on EBay. Was not charged NY sales tax (or Oregon sales tax). As I was away from Canada for more than one week in both September & October, did not have to pay Canadian VAT (called HST) when I brought the goods into Canada (valued up to $800).

VAT is a national tax which is paid at each resale of an item (or item's components) - literally on the "value added" at each point of sale. So ... a lumber jack collects tax on the cost of a tree sold to a lumber yard, the lumber yard collects tax when the the wood is sold to a furniture manufacturer, the furniture manufacturer collects tax when the chair is sold to a wholesaler, the wholesaler collects tax when the chair is sold to a retailer, the retailer collects tax when the chair is sold to a retail customer. The tax collected at each stage is paid to the government, but reclaimed by each (VAT registered) seller except the end retail buyer who ends up remitting tax for the final sale price of the chair. It's a system that requires a lot of paperwork, but it's "fair" & hard to avoid the tax as there is a paper trail.

Why not just tax a companies annual equity? I mean, I dont know the feasibility of it. I am sure it's an idea that would be easily dodged with creative use of game mechanics. It just seems, if you want to keep taxes from rolling down the hill until it lands on the consumer, taxing annual equity would be a fairer way to "VAT" than making a long paper trail that the consumer has to ultimately pay up on.

 

[PocketZeven]

Or it could have miraculous results. I do believe there are a couple of pilot programs out there to see how it plays out at least on the micro.

I agree, but they should test out any worstcase scenario then an ideal situation and stresstest the idea. No idea what this worscase scenario would likely be though.

 

[Biggles]

Why not just tax a companies annual equity? I mean, I dont know the feasibility of it. I am sure it's an idea that would be easily dodged with creative use of game mechanics. It just seems, if you want to keep taxes from rolling down the hill until it lands on the consumer, taxing annual equity would be a fairer way to "VAT" than making a long paper trail that the consumer has to ultimately pay up on.

Taxing "a companies annual equity" would create another burden specifically on businesses & so potentially inhibits the growth of businesses & the consequent employment. The advantage of a VAT is that it is a widely based consumption tax that spreads the burden, allowing the percentage to be lower while bringing in a lot of revenue. You can look up many online discussions about the advantages & disadvantages of VAT. Here's one:

https://www.taxpolicycenter.org/briefing-book/why-vat-administratively-superior-retail-sales-tax

As a consumption tax it is a "flat tax", which some conservatives favour. It is also regressive as it taxes the poor equally for purchases ... although the wealthy would presumably spend a lot more & therefore pay more tax. Often there are exemptions for basic items, like food or medical supplies. ALL the OECD countries except the US use some form of VAT. The US government would like to implement a VAT as it could bring in a lot of revenue & help reduce the deficit/debt ... but trying to introduce VAT across the nation would probably be political suicide for any American political figure & comes up against constitutional obstacles.

 

[BobK]

Why not just tax a companies annual equity? I mean, I dont know the feasibility of it. I am sure it's an idea that would be easily dodged with creative use of game mechanics. It just seems, if you want to keep taxes from rolling down the hill until it lands on the consumer, taxing annual equity would be a fairer way to "VAT" than making a long paper trail that the consumer has to ultimately pay up on.

The problem is, taxes on businesses always roll downhill to the consumer.

 

[TheGeologist]

It would be a massive boost and a great way to tackle my student loans. I'd be all for it.

 

[die996]

I wouldn't be reading something stolen from r/AskReddit.

 

[jjaisli]

In very general terms, think it's a flawed idea in a capitalist society. And there's a lot of room for abuse. Our national debt is out of control as it is. Can we really afford this? As a policy, it could help as a stepping stone for people in need, but it could also be used by those who don't REALLY need it as an easy supplement. And this has the potential to be 'Stage I' in an eventual basic living stipend, where through continual automation, we turn ourselves into a perpetual welfare state as there just aren't enough well paying jobs.

That said, for people who either don't have the skill or income or circumstances prevent them from advancing for a multitude of reasons, this could go a long way to helping. But so could a loan. Or a tax credit. When I hear what some of my own employees are paying for rent I can only shake my head--it's significantly more than I paid for a mortgage on my first house 20 years ago. So the cost of opportunity continues to increase and it's harder and harder for borderline poor/lower middle class people to make it to the next level. I don't envy young people starting out today.

I'm not completely against the concept but I would prefer the money go directly to education vouchers or food stamps or 'rent stamps' or child care whatever you want to call it. Likewise, I would rather see some of that money go toward education reform and remedial education. There are a lot of 40-60 year olds working in fields that either are or soon will be extinct. And this may continue to be an on-going and continual process going forward. As technology advances, it's likely that more and more specialized jobs will change or evolve or be phased out all together. And it's not easy for the people who have these skills to relearn and restart another career at that point in their lives when they may already be in debt.

But then I guess you'd have to ask how much that oversight would cost and complicate things by offering vouchers vs just paying a basic amount.

 

[Danoff]

When I hear what some of my own employees are paying for rent I can only shake my head--it's significantly more than I paid for a mortgage on my first house 20 years ago

Inflation accounts for a 50% increase in prices since 1999. $2000 of rent today is equivalent to $1333 in 1999.

 

[jjaisli]

I understand that. But rent in particular outpaced the general inflation rate. Significantly.

 

[Danoff]

I understand that. But rent in particular outpaced the general inflation rate. Significantly.

Depends on your location.

 

[DG_Silva]

England does not have a 25% VAT rate. The British-wide VAT rates are 0%, 5% and 20%.

It depends on how you define the tax. When you're making it comparable to US tax methods, then VAT is 25% of the non-tax price. To us in the UK who are used VAT, it is 20% of the total price of the item. Either way, it comes to the same amount.

 

[McLaren]

I like Yang. I like the idea behind it. But, as Northstar said, it depends on how it works. Through my own taxes, I'd prefer just to keep the $1,000 initially than for it be taken, and given back the next month. Surely there's a way to calculate a way to cut it down so that a $1,000 is saved on the individual.

 

[TenEightyOne]

It depends on how you define the tax. When you're making it comparable to US tax methods, then VAT is 25% of the non-tax price. To us in the UK who are used VAT, it is 20% of the total price of the item. Either way, it comes to the same amount.

Eh? Tax is tax, it's an addition to a base price. VAT is 20%, 5% or 0% of an item. If I sold £10-worth of item to you I'd charge £12 and pass the VAT along. Note that the price rise is only about 16% of the total price. It never gets near 25% of it. For the VAT to equal 25% of what I'm charging you the tax would have to be 33%.

 

[DG_Silva]

Eh? Tax is tax, it's an addition to a base price. VAT is 20%, 5% or 0% of an item. If I sold £10-worth of item to you I'd charge £12 and pass the VAT along. Note that the price rise is only about 16% of the total price. It never gets near 25% of it. For the VAT to equal 25% of what I'm charging you the tax would have to be 33%.

Sorry, yup I'm wrong. I always thought that VAT was 20% of the total cost, not 20% of the raw cost which is then added to the raw cost to make the total cost. My bad.

 

[ROAD_DOGG33J]

We have the yang, but where is the yin?

 

[Rallywagon]

We have the yang, but where is the yin?

I think that might be the guy in office now

 

[Pupik]

We have the yang, but where is the yin?

Pittsburgh.