Value added tax won’t help the poor

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I would like to make a few comments about Dee Richard’s April 22 column “Flat user tax would treat the rich and the poor equally.”

This kind of tax is usually referred to as a value added tax. A flat tax is a different animal altogether.

Does Richard think treating the rich and poor equally is a good idea? Don’t we give money to the poor? Does she suggest we give money to the rich? Oh, we do.

We load the tax code with complicated credits and deductions so the working poor can get help from the government. That is so we can keep their wages low so as to benefit — oh, the rich.

This loading leads to tax shelters being devised. These tax shelters are predominantly used by the upper-income earners to keep more of their income. That is why they have become disproportionately richer.

How does a VAT help the working poor, the ones who get earned income credit?

It has been stated that the VAT could be tweaked in favor of those lower-income earners by adding exemptions for basic necessities. Just wait and see what will constitute basic necessities.

Any tweaking that would have to be done would just make it easier for the rich to avoid being taxed.

How does this VAT affect the people, like me, who followed the American ideal of saving for one’s future? With the VAT, we will now be taxed again when we spend the money we saved with after-tax money.

That would be our bank accounts, CDs and Roth IRAs. The principals of all of them have been taxed once before.

Like the people who advocate for a flat tax, Richard seems to have a different concept of what is fair for all.

We actually do have a flat tax. It is called the alternative minimum tax. The people predominantly affected by the AMT are hollering against it — the rich, that is.

I remember when people would buy something in New York and, to avoid the sales tax, have it “shipped” to them, supposedly, out of town. This was done at jewelry and clothing stores. Now it is being done over the Internet.

Finally, how would we make sure the VAT was administrated properly? Put a government worker at every cash register?

Jerry Schreibersdorf


Updated 5:48 pm, October 10, 2011
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