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May 27, 2009

Change You Can Believe In: Here Comes A VAT

Because, you know, obviously cutting spending is a non-starter

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

..."Everybody who understands our long-term budget problems understands we're going to need a new source of revenue, and a VAT is an obvious candidate," said Leonard Burman, co-director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, who testified on Capitol Hill this month about his own VAT plan. "It's common to the rest of the world, and we don't have it."

I really really want to hit these guys with a clue-by-four: CUT SPENDING!

But as long as we keep voting them in, they're going to keep spending.

And us and our kids are screwed.

Posted by Mr. Bingley at May 27, 2009 08:41 AM

Comments

The ONLY way I would endorse a VAT would be IN PLACE OF income taxes. (There are lots of things to recommend that set up; for one, people making money "under the table" - like drug dealers - get taxed when they buy stuff, it would encourage people to save money rather than spending it). But NOT on top of.

Good God, I guess it's time for me to stock up on books, canned food, craft supplies, garden tools...everything I could possibly need in the coming years, so I can go all Laura Ingalls and stop spending money when this new tax comes down the line.

I bet a VAT would do little good - I suspect that there are a lot of people, like me, who'd either stop spending on "unnecessary" stuff, or would go to bartering for things, or who knows what.

Posted by: ricki at May 27, 2009 10:04 AM

Any VAT on top of our current taxation would be ruinous for the economy. Just look at England; they've had a VAT for years, and it hasn't helped them at all.

For my Laura Ingalls impression, I'd convert my back yard into a garden. T'ain't much, but at least I could get some fresh vegetables from time to time.

Posted by: JeffS at May 27, 2009 10:31 AM

I'm so happy that America's leadership consists of nothing more than copying Europe.

Posted by: Nobrainer at May 27, 2009 11:24 AM

It's tough to vote them out, when the folks we vote in take on the same attitudes. But now these jokers seem determined to push until somebody decides to hold an armed revolt - and the resulting crackdown would be a convenient excuse to abrogate large swaths of our freedoms, under the guise of public safety.

When people were shrieking about W's supposed erosion of our liberties, I liked to tell them that the real "creeping fascism" is usually economic - inasmuch as the government takes money from us by force of law, we are to that extent owned by the government. They get the first cut of all of our labor and production in this manner. When that cut gets larger and deeper, we have to put more into our subsistence and less into actually enjoying and exercising the freedoms we're given.

It also means the government, by throwing its weight around economically, can enforce "guidelines" and other regulations that would never pass muster as actual legislation. The drinking age, for example, could be moved to 18 by any state that wished - except that DC would withhold its share of highway funding to that state.

People were generally dismissive of this argument, but now you're seeing it in spades - Obama revealed himself to be a petty schoolyard bully, and the TARP funding and various bailouts have given him a ruinous leverage over private capital and private commerce. The VAT would only make it worse. Even if it is fairer than the income tax, the government will never choose one or the other. They'll go for both, even as many states (including my own) already do.

(And I just LOVE their justification for it - the income tax in NJ was originally meant to give property tax relief. And, I've heraad Corzine propose any number of new taxes in order to preserve other "rebates." How did any of these people pass the third grade with math skills like this? How do you come out ahead if they take an additional $500 bucks from you, in order to preserve the program that gives you back $250? Even if it's 100% efficient - and it NEVER is - what's the point of taking $250 out of one of your pockets only to put it back in the other? And you'll STILL be out that $250 bucks, since it's a new tax to preserve an old rebate. It would be more honest AND cheaper to just kill the rebate.)

Posted by: nightfly at May 27, 2009 12:04 PM

Be afraid people, be afraid. This is just more of the same, leech from those who have money. Build your base on those who receive handouts, stay in power.

Posted by: major dad at May 27, 2009 02:20 PM

Remember when Obama promised most people's taxes wouldn't go up by even "one dime"? Watch that go down the MSM memory hole.

Posted by: Dave J. at May 27, 2009 07:48 PM

Well, maybe people at Fox and elsewhere that hasn't bought into the Obama mystique need to dredge up the old "read my lips: no new taxes" attitude that they hit the first Bush with.

Oh, and Dave: they'll probably call it a "user fee" or some idiocy so he can technically claim taxes didn't go up.

You know, I wouldn't be at all surprised if a VAT in this country lead to a healthy, underground, barter economy. At least until the government decided they weren't gettin' their cut and tried to crush it.

Posted by: ricki at May 28, 2009 03:54 PM

All good and accurate thoughts, folks.

And not encouraging in the slightest.

Posted by: Mr. Bingley at May 29, 2009 06:12 AM

2gHURc

Posted by: Olrwkdnu at July 14, 2009 05:40 AM