Debunking the Fair Tax myth

[TheAdvocate]

Originally posted by: Genx87

Originally posted by: fallensight
The giant hole the proponents of the 'fair tax' or national sales tax dont want to mention is that the poor and middle class spend all of thier income. That upper 1% that the gop catters to do not spend but a fraction of thier income. Add that with the removal of the child tax credits, morgage deductions and you are looking at a very bleak outook for the majority of americans who live in the paycheck-to-paycheck situation. Yeah, fair indeed.

I dont know if I totally buy that. I know people from all income brackets, from slightly above poverty to making several hundred thousand a year which puts them into the top 5%. Some of them are already millionaires.

What they all share is their ability to spend according to scale. My friends who dont have cash get used cars or very low end vehicles, live in apartments or rent rooms in houses, and when they eat out, they eat at lower end places.

My friends who are making a killing drive high end cars, own bigger homes, and when they eat out, eat at nice restaurants.

I would say the only people who dont spend the same % of their incomes are the insane rich, because even they cant spend the millions they make a year fast enough, not because they dont want to.

The only thing you are wrong about is your definition of "rich". Take the insane part out of the above analysis, and realize that your friends who are "making a killing" are not rich because they have to work for their money, and fallensight's post will suddenly make sense. I promise.

 

[Genx87]

Originally posted by: TheAdvocate

Originally posted by: Genx87

Originally posted by: fallensight
The giant hole the proponents of the 'fair tax' or national sales tax dont want to mention is that the poor and middle class spend all of thier income. That upper 1% that the gop catters to do not spend but a fraction of thier income. Add that with the removal of the child tax credits, morgage deductions and you are looking at a very bleak outook for the majority of americans who live in the paycheck-to-paycheck situation. Yeah, fair indeed.

I dont know if I totally buy that. I know people from all income brackets, from slightly above poverty to making several hundred thousand a year which puts them into the top 5%. Some of them are already millionaires.

What they all share is their ability to spend according to scale. My friends who dont have cash get used cars or very low end vehicles, live in apartments or rent rooms in houses, and when they eat out, they eat at lower end places.

My friends who are making a killing drive high end cars, own bigger homes, and when they eat out, eat at nice restaurants.

I would say the only people who dont spend the same % of their incomes are the insane rich, because even they cant spend the millions they make a year fast enough, not because they dont want to.

The only thing you are wrong about is your definition of "rich". Take the insane part out of the above analysis, and realize that your friends who are "making a killing" are not rich because they have to work for their money, and fallensight's post will suddenly make sense. I promise.

Uh, ask the local libs on this msgboard who the rich are. People in the top 5% of the income bracket are considered rich.

The insane rich make millions a year and they still spend money, much higher btw than your avg wage earner.

Are you implying the insane rich dont or havent worked for their money? Do they have zero income? I am curious where you are going with this. If you are implying the insane rich, something none of my friends are, dont have incomes. Wouldnt a national sales tax actually capture revenue from them otherwise not seen because they dont have any income but do spend money?

 

[TheAdvocate]

It's not complicated. There's even a cliche saying.

You are not rich until your money works for you and you don't have to work for your money.

Rich people are predominantly passive earners. They are not wage earners, or even commission earners. If you have to receive a paycheck to get by, you arent rich. Being rich is a measure of unencumbered assets, not income. The two are not mutually exclusive, but they aren't mutually inclusive either.

 

[soccerballtux]

Originally posted by: fallensight
The giant hole the proponents of the 'fair tax' or national sales tax dont want to mention is that the poor and middle class spend all of thier income. That upper 1% that the gop catters to do not spend but a fraction of thier income. Add that with the removal of the child tax credits, morgage deductions and you are looking at a very bleak outook for the majority of americans who live in the paycheck-to-paycheck situation. Yeah, fair indeed.

So I guess we should send the message that as long as you don't work hard, the people who do and make the most money will pay for the country? Having a graduated tax removes incentive to work harder. It is very communistic in nature.

If it were a fair tax, then yes it would put more burden on us...but the people with all the money would have even more money to invest in the economy. That would create new jobs for us. It would be stupid to sit on the money when you can make so much more investing.


However the rich seem to play nasty to get (and stay) rich so maybe it is asking too much to expect a "fair" tax to be best for us all. But if it becomes unfair, it will always be manipulated by those in power to their own benefit. It seems like a lose-lose situation for us. I don't have much idea what to do.

 

[Genx87]

Originally posted by: TheAdvocate
It's not complicated. There's even a cliche saying.

You are not rich until your money works for you and you don't have to work for your money.

Rich people are predominantly passive earners. They are not wage earners, or even commission earners. If you have to receive a paycheck to get by, you arent rich. Being rich is a measure of unencumbered assets, not income. The two are not mutually exclusive, but they aren't mutually inclusive either.

That is a nice theory but I am thinking Bill Gates and Ted Turner have more money than you or I can dream of and they still work.

And even if your dream were true I say ok and?

If the rich in your eyes arent earning any income, wouldnt a sales tax capture taxes from them income taxes obviously wouldnt? Thus nullifying his argument about how the rich would get off on this?

 

[imported_Tango]

Originally posted by: blackangst1

Originally posted by: thraashman
My view is that the reason the rich are taxed higher is because it IS a fair tax. The fairness of it is that the rich are being taxed a higher percentage because it's the rich's exploitation of the lower and middle classes that make them rich! They're being taxed on their exploitation of the capitalistic society they live in. Even after taxes they still make a huge amount more per year than the lower class. Stop complaining! If you make 50 million and are taxed 25 million, that's still more money than I'll probably ever see in my lifetime.

You, sir, are a poster child of class envy.

Not necessarily. I've alwats been in the highest tax bracket and still think taxes should be MUCH higher for people with my income. It makes both economic and ethical sense. Everybody in the economic system would be better off, and (even more important) poverty would decrease.

The same is true for corporations. The big numbers you read when dealing with US economics are mainly linked to corporations, not individuals. The fact that in the same country you have most of the biggest corporations in the world, breacking profit records year after years, and double-digits percentages of people under the poverty line is a shame. The US wealth is right now only enjoyed by logos, not people. In the long run not only this is morally wrong, but also economically inefficient.
The US as a country has negative savings, and more than 70% of the GDP is based on consumption. I guess you can see what's going wrong.

 

[Genx87]

Originally posted by: Tango

Originally posted by: blackangst1

Originally posted by: thraashman
My view is that the reason the rich are taxed higher is because it IS a fair tax. The fairness of it is that the rich are being taxed a higher percentage because it's the rich's exploitation of the lower and middle classes that make them rich! They're being taxed on their exploitation of the capitalistic society they live in. Even after taxes they still make a huge amount more per year than the lower class. Stop complaining! If you make 50 million and are taxed 25 million, that's still more money than I'll probably ever see in my lifetime.

You, sir, are a poster child of class envy.

Not necessarely. I've alwats been in the highest tax bracket and still think taxes should be MUCH higher for people with my income. It makes both economic and ethical sense. Everybody in the economic system would be better off, and (even more important) poverty would decrease.

The same is true for corporations. The big numbers you read when dealing with US economics are mainly linked to corporations, not individuals. The fact that in the same country you have most of the biggest corporations in the world, breacking profit records year after years, and double-digits percentages of people under the poverty line is a shame. The US wealth is right now only enjoyed by logos, not people. In the long run not only this is morally wrong, but also economically inefficient.
The US as a country has negative savings, and more than 70% of the GDP is based on consumption. I guess you can see what's going wrong.

Our tax rates have been steadily increasing through higher FICA, income, sales, and other fee's in this country over the past 60 years. Yet the poverty rate has remained relatively stagnant since the mid 1960s and the gap between rich and poor continues to grow.

Redistribution of wealth through the state is a sham and proved so by a nation championed on redistributing all that cash and assets from those ebil capitalists. This country of course was the Soviet Union.

 

[imported_Tango]

Originally posted by: Genx87

Originally posted by: Tango

Originally posted by: blackangst1

Originally posted by: thraashman
My view is that the reason the rich are taxed higher is because it IS a fair tax. The fairness of it is that the rich are being taxed a higher percentage because it's the rich's exploitation of the lower and middle classes that make them rich! They're being taxed on their exploitation of the capitalistic society they live in. Even after taxes they still make a huge amount more per year than the lower class. Stop complaining! If you make 50 million and are taxed 25 million, that's still more money than I'll probably ever see in my lifetime.

You, sir, are a poster child of class envy.

Not necessarely. I've alwats been in the highest tax bracket and still think taxes should be MUCH higher for people with my income. It makes both economic and ethical sense. Everybody in the economic system would be better off, and (even more important) poverty would decrease.

The same is true for corporations. The big numbers you read when dealing with US economics are mainly linked to corporations, not individuals. The fact that in the same country you have most of the biggest corporations in the world, breacking profit records year after years, and double-digits percentages of people under the poverty line is a shame. The US wealth is right now only enjoyed by logos, not people. In the long run not only this is morally wrong, but also economically inefficient.
The US as a country has negative savings, and more than 70% of the GDP is based on consumption. I guess you can see what's going wrong.

Our tax rates have been steadily increasing through higher FICA, income, sales, and other fee's in this country over the past 60 years. Yet the poverty rate has remained relatively stagnant since the mid 1960s and the gap between rich and poor continues to grow.

Redistribution of wealth through the state is a sham and proved so by a nation championed on redistributing all that cash and assets from those ebil capitalists. This country of course was the Soviet Union.

I guess you understand that between the present economic system in the US and Soviet Union there is a vast array of solutions....

 

[BlancoNino]

I've read numerous times that there is actually no statute in the IRS code that makes anyone liable for income taxes.

 

[LunarRay]

Originally posted by: BlancoNino
I've read numerous times that there is actually no statute in the IRS code that makes anyone liable for income taxes.

The 16th Amendment when ratified gave the Government the right to tax income. The IRS is charged with collecting income tax and enforcing income tax laws.. Congress and the Executive pass the laws regarding taxation under the provisions it can do so by the 16th..

Read the annotations if you're interested in the right .... heheehe.. to be taxed..

 

[BlancoNino]

Originally posted by: LunarRay

Originally posted by: BlancoNino
I've read numerous times that there is actually no statute in the IRS code that makes anyone liable for income taxes.

The 16th Amendment when ratified gave the Government the right to tax income. The IRS is charged with collecting income tax and enforcing income tax laws.. Congress and the Executive pass the laws regarding taxation under the provisions it can do so by the 16th..

Read the annotations if you're interested in the right .... heheehe.. to be taxed..

http://www.paynoincometax.com/861.htm

http://www.861evidence.com/pgs/structure.shtml

Plenty of others, but meh. Not worth fighting in my book. I totally support a flat-tax (simpler, fairer) along with a ton of cuts in the federal budget.

 

[gman11]

http://www.cato.org/special/ownership_society/boaz.html

 

[soccerballtux]

My history teacher's uncle didn't feel like paying any of his taxes. So he just did his best to avoid the IRS for years. He died when he was ~45, but managed to not pay any of the taxes. He was jailed several times but they eventually gave up in trying to get him to pay. LOL. That is how it is done.

 

[piasabird]

One mans middle class is another mans upper class. Kind of hard to tell what you are talking about. The average income is only around $40,000.00 or so.

If there was a 23% National Sales Tax, then on top of that would be state tax, county tax, municipality tax. So that 23% tax may be 30% - 40% Tax. So when you went to the gocery store and buy $100.00, $23.00 would be extra tax. This does not sound like a good idea to me. Just wait till you buy that car!

If the Government gave you an account when you were born with $5,000.00, you could probably retire on it just from the interest.

 

[Craig234]

"I've read numerous times that there is actually no statute in the IRS code that makes anyone liable for income taxes. "

There are plenty of people in jail who say that.

Back to the topic - I see there was no response to the posts I linked to on the benefits of home ownership, so I'll consider that point done.

What we have now is a huge money grab by the most wealthy - the top 0.1%.

They're in control of the political system, and they pass policy after policy after policy which further increase the money from most Americans to them.

They control the media, the think tanks that create the policies to tell the politicians to pass and the propaganda to fool the public with into not complaining about it.

We are racing towards feudalism.

And we're crippling our nation's ability to recover from these problems. As we continue borrowing, the best we'll be able to do is to devlaue the dollar to sneak out of some debt.

That will leave us without the foreign credit we rely on so heavily.

We're headed toward a corporatocracy, where companies parter with corrupt counterparts like the Chinese government to screw 95% of the people, crippling the US's standard of living, crippling Europe's standard of living, to push the first world down to the third for the workers, and the best time to stop it is now before most Americans are so overwhelmed they can't stay informed and vote, before money corrupts the system even further to where the democrats are even more bought out so coroporatists control both parties.

 

[LunarRay]

Originally posted by: BlancoNino

Originally posted by: LunarRay

Originally posted by: BlancoNino
I've read numerous times that there is actually no statute in the IRS code that makes anyone liable for income taxes.

The 16th Amendment when ratified gave the Government the right to tax income. The IRS is charged with collecting income tax and enforcing income tax laws.. Congress and the Executive pass the laws regarding taxation under the provisions it can do so by the 16th..

Read the annotations if you're interested in the right .... heheehe.. to be taxed..

http://www.paynoincometax.com/861.htm

http://www.861evidence.com/pgs/structure.shtml

Plenty of others, but meh. Not worth fighting in my book. I totally support a flat-tax (simpler, fairer) along with a ton of cuts in the federal budget.

Lets put it this way.. the only argument that would hold water would be before the USSC and you'd not be granted Cert to do that.. It has been decided already.. I'd say every possible avenue has been explored in this matter..

 

[LunarRay]

Originally posted by: piasabird
One mans middle class is another mans upper class. Kind of hard to tell what you are talking about. The average income is only around $40,000.00 or so.

If there was a 23% National Sales Tax, then on top of that would be state tax, county tax, municipality tax. So that 23% tax may be 30% - 40% Tax. So when you went to the gocery store and buy $100.00, $23.00 would be extra tax. This does not sound like a good idea to me. Just wait till you buy that car!

If the Government gave you an account when you were born with $5,000.00, you could probably retire on it just from the interest.

You wouldn't pay VAT on groceries nor do you pay State Sales tax on food purchased to take home.. (in California anyhow)..
The only fair tax is a VAT tax but only if done correctly... The States could be mandated to follow suit by several means..

 

[Orsorum]

The irony, of course, is that an increase in taxes for the bottom 90% might make them realize the true cost of our Federal government. Until they feel it in their pocketbooks, they'll be happy to vote for increase and entitlement. Who cares, right, if only the rich are paying for it?

 

[soccerballtux]

Originally posted by: Genx87

Originally posted by: brandonbull

Originally posted by: Genx87
My problem with a national sales tax is perception is reality for many people. Sure they take home more bucks but when they come upto the cash register and see a whopping 30% tax on whatever they are buying they may not bother buying many things and it slows our economy.

The current system is a mess but people have been so brainwashed into believing the money is gone and out of sight they happily spend away even if the effective tax rates end up the same in the end.

So what you are saying is that with historically low levels of savings plus more money in the pocket Americans will cut back on spending?

It wont surprise me if people cut back on non-essential spending as they decide the tax rate is very high for items.

You realize in that case the people up top will have to cut prices.

One of the great benefits of a fair tax is that it won't matter if we have illegal immigrants. If they want to buy crap, they won't be able to escape the sales tax. Sounds like an easy, fair plan to me.

 

[Aisengard]

Originally posted by: BlancoNino

Originally posted by: LunarRay

Originally posted by: BlancoNino
I've read numerous times that there is actually no statute in the IRS code that makes anyone liable for income taxes.

The 16th Amendment when ratified gave the Government the right to tax income. The IRS is charged with collecting income tax and enforcing income tax laws.. Congress and the Executive pass the laws regarding taxation under the provisions it can do so by the 16th..

Read the annotations if you're interested in the right .... heheehe.. to be taxed..

http://www.paynoincometax.com/861.htm

http://www.861evidence.com/pgs/structure.shtml

Plenty of others, but meh. Not worth fighting in my book. I totally support a flat-tax (simpler, fairer) along with a ton of cuts in the federal budget.

Yeah yeah yeah, and I support everlasting world peace. Unless we elect those most conservative politicians we can (which will backfire, when we lose all our 'excessive' rights), we won't see a decrease in the federal budget. It's like the Yankees' payroll. They're allowed to spend the money, so why not?

 

[ayabe]

Originally posted by: Orsorum
The irony, of course, is that an increase in taxes for the bottom 90% might make them realize the true cost of our Federal government. Until they feel it in their pocketbooks, they'll be happy to vote for increase and entitlement. Who cares, right, if only the rich are paying for it?

So the poor don't yet know what it's like to be poor?


People are voting for entitlement increases? How about the 8 billion a month we are spending in Iraq, that's one hell of an entitlement don't you think? Do you know who controls Congress and the White House? Do you know that real wages have been stagnant while the cost of goods and services have dramatically increased in the past 5 years?

Yeah you're right we do need to hold these irresponsible elected officials to account but the way to do that isn't to squeeze working and poor people to death to "teach them a lesson".

 

[TheAdvocate]

Originally posted by: Craig234
We are racing towards feudalism.

And we're crippling our nation's ability to recover from these problems. As we continue borrowing, the best we'll be able to do is to devlaue the dollar to sneak out of some debt.

That will leave us without the foreign credit we rely on so heavily.

We're headed toward a corporatocracy, where companies parter with corrupt counterparts like the Chinese government to screw 95% of the people, crippling the US's standard of living, crippling Europe's standard of living, to push the first world down to the third for the workers, and the best time to stop it is now before most Americans are so overwhelmed they can't stay informed and vote, before money corrupts the system even further to where the democrats are even more bought out so coroporatists control both parties.

Amen.

Originally posted by: Tango
Not necessarily. I've alwats been in the highest tax bracket and still think taxes should be MUCH higher for people with my income. It makes both economic and ethical sense. Everybody in the economic system would be better off, and (even more important) poverty would decrease.

The same is true for corporations. The big numbers you read when dealing with US economics are mainly linked to corporations, not individuals. The fact that in the same country you have most of the biggest corporations in the world, breacking profit records year after years, and double-digits percentages of people under the poverty line is a shame. The US wealth is right now only enjoyed by logos, not people. In the long run not only this is morally wrong, but also economically inefficient.
The US as a country has negative savings, and more than 70% of the GDP is based on consumption. I guess you can see what's going wrong.

I am glad there are some people who see where we're headed. It's neo-fuedalism. Instead of Lords, we'll have CEO majority shareholders. I'm not arguing for a complete 180 to the other side of the pendulum. I am just concerned when we veer too far in either direction. The strength of this nation is the middle class, and frankly, the middle class is oppressed economically at this point (drastically reduced spending power, savings and highly leveraged). In a consumption based economy, this is a terrible thing, for everyone, rich, poor or anywhere in bteween. The middle class is the engine of our economy, and it needs a drastic tune up.

Let me cement my "commie class warrior" reputation with the idealogues on P&N by saying that the main problem capitalism has (it's still overall a good system, when it's regulated at the perimeter) is that it's a game. A game has a winner, or several winners. Ultimately, too much of the power, in this case currency/wealth/money, ends up in a few key players hands and the whole thing stagnates. I read about people bitching about game imbalance on these forums all the time, yet I haven't ever read anyone transfer that lesson to real life. It does apply. That is why we have anti-trust laws. Butt hose are failing now because we have changed the legal landscape and the players have found ways around them, like any good player would.

Here's how it's working: The last couple of decades, America has coasted on a wave of corporate deregulation and an unprecedented M&A craze. It does create wealth. It does create prosperity. But as the number of targets (competitors) dries up, the M&A profit model runs out of fuel, and even worse, competitiveness, the very principle of capitalism, fails, because there arent enough competitors and a single entity or small group of entities controls the market with no checks. This permeates into every facet of daily life and we're seeing it now in the middle class. It's deceptive because the idealogues can correctly point to traditional markers such as job growth and GDP and they are going up, but the transfer of wealth, and the real growth of wealth is all at the very top, and that's severely problematic for the reasons stated. If you don't want to see it, no one can make you, but it's there. It's neo-feudalism.

$.02

 

[BaliBabyDoc]

Originally posted by: LunarRay
BBD,
I see a State VAT based on the needs of the various States with redistribution to County and City based on the needs of that locale. I'd presume that the revenue from the cities would be about equal to the needs.
The FED VAT would be such that it would eliminate any and all tax or FICA.. in essence there would be NO IRS.. All VAT would be collected upon the purchase of the service or item... IRS would be diverted to that effort..
Tariff duties and the like used to control importation would be replaced by the VAT but in this case when the goods are landed in the USA or assumed to be purchased by the importer of the goods.. assuming they are not among the excluded items.
The idea of targeting VAT exclusion on say ... a clean air vehicle would serve to significantly reduce the cost to the consumer... But cars would have a phase in VAT rate so that full VAT occurred on all SUV and autos over 35,000$.
In our wisdom we could control every aspect of the consumption side of our economy cuz everyone would be just that. The tricky bit is the rates... Our Congress might want to make much lower rates on the items normally purchased by the rich and offset onto the middle class so even a VAT scheme can and probably would be argued in the typical rich/poor manner.. I'd install by law an independent body much like the Federal Reserve Board is to set the rates even the rates on Congressionally targeted law... Congress would only be able to advise but not establish the rates..
The membership to this board would require approval of Congress with a super majority vote.. say 75%... That then is the people talking.. imo..

hehehehheh.. I'd no doubt collect VAT on all INTERNET purchases etc.. heheh

This has one drawback.. that I readily see... a term 'Foxing' is used in Ireland and is basically a barter system.. I fix your car and you cut my hair.. goes on alot in Ireland and would become part of the American culture as well.. so long as you can trust the folks but .. being a very legal people we'd not engage in that activity cuz we know the IRS would be on every corner looking ... heheheh

I like that except I don't think it will work for schools. We've been doing this great experiment in locally-controled public education for nearly two centuries. I can tell you for a fact that Chapel Hill/Carrboro couldn't possibly run itself on Alamance/Burlington (ABSS) money but if it comes from one big pot . . . ABSS would insist it get exactly same funds per pupil as its well-off neighbor. On the flipside, most states (and Feds) would like to see Chapel Hill/Carrboro results on an ABSS budget.

 

[BaliBabyDoc]

Originally posted by: LunarRay

Originally posted by: piasabird
One mans middle class is another mans upper class. Kind of hard to tell what you are talking about. The average income is only around $40,000.00 or so.

If there was a 23% National Sales Tax, then on top of that would be state tax, county tax, municipality tax. So that 23% tax may be 30% - 40% Tax. So when you went to the gocery store and buy $100.00, $23.00 would be extra tax. This does not sound like a good idea to me. Just wait till you buy that car!

If the Government gave you an account when you were born with $5,000.00, you could probably retire on it just from the interest.

You wouldn't pay VAT on groceries nor do you pay State Sales tax on food purchased to take home.. (in California anyhow)..
The only fair tax is a VAT tax but only if done correctly... The States could be mandated to follow suit by several means..

I see a couple of troublemakers saying, "we let you have that IRS crap but now you are trying to make all the rules . . . and that ain't in that GD Constitution . . . just like that unitary executive BS!"

 

[LunarRay]

Originally posted by: BaliBabyDoc

Originally posted by: LunarRay
BBD,
I see a State VAT based on the needs of the various States with redistribution to County and City based on the needs of that locale. I'd presume that the revenue from the cities would be about equal to the needs.
The FED VAT would be such that it would eliminate any and all tax or FICA.. in essence there would be NO IRS.. All VAT would be collected upon the purchase of the service or item... IRS would be diverted to that effort..
Tariff duties and the like used to control importation would be replaced by the VAT but in this case when the goods are landed in the USA or assumed to be purchased by the importer of the goods.. assuming they are not among the excluded items.
The idea of targeting VAT exclusion on say ... a clean air vehicle would serve to significantly reduce the cost to the consumer... But cars would have a phase in VAT rate so that full VAT occurred on all SUV and autos over 35,000$.
In our wisdom we could control every aspect of the consumption side of our economy cuz everyone would be just that. The tricky bit is the rates... Our Congress might want to make much lower rates on the items normally purchased by the rich and offset onto the middle class so even a VAT scheme can and probably would be argued in the typical rich/poor manner.. I'd install by law an independent body much like the Federal Reserve Board is to set the rates even the rates on Congressionally targeted law... Congress would only be able to advise but not establish the rates..
The membership to this board would require approval of Congress with a super majority vote.. say 75%... That then is the people talking.. imo..

hehehehheh.. I'd no doubt collect VAT on all INTERNET purchases etc.. heheh

This has one drawback.. that I readily see... a term 'Foxing' is used in Ireland and is basically a barter system.. I fix your car and you cut my hair.. goes on alot in Ireland and would become part of the American culture as well.. so long as you can trust the folks but .. being a very legal people we'd not engage in that activity cuz we know the IRS would be on every corner looking ... heheheh

I like that except I don't think it will work for schools. We've been doing this great experiment in locally-controled public education for nearly two centuries. I can tell you for a fact that Chapel Hill/Carrboro couldn't possibly run itself on Alamance/Burlington (ABSS) money but if it comes from one big pot . . . ABSS would insist it get exactly same funds per pupil as its well-off neighbor. On the flipside, most states (and Feds) would like to see Chapel Hill/Carrboro results on an ABSS budget.

Ok.. I see that..
Well.. I suppose each State would have to opt one way or another then.. voter mandate would carry the day... maybe even by county to opt in to a State VAT redistribution scheme.. Not really sure on the State level because my focus has always been on the Federal side... and I can see that there are many many State/County/Local issues that are really specific to each locale...
I'll have to take a few states and research... hehehehehhe
There is a way, I know this.. to do the States in a VAT scheme as well.. but the dynamics are a bit different for each.. not a good thing..

EDIT: I'm almost ready to give up on State VAT as a viable scheme... Looking at the various governmental bodies within some states that overlap like some school districts I find myself with a model that don't work at all.. I can't eliminate the property tax on the property in a district and then distribute the VAT garnered because there may not be a similar spending capability and to redistribute based on history would be insane to try.. as you say each school would want the same $ per some base.. No matter what I do I can't make it work... Flustering... and in some cases I'd get revenue with no where to spend it and I can't really have a variety of rates on the same item based on locale.. folks would buy in the cheaper zones.. It must be the same rate on the same item in all locale with in a state and that just won't work...