As usual, some very sound thoughts – on both the value-added tax and the income tax – from George Will:
When liberals advocate a value-added tax, conservatives should respond: Taxing consumption has merits, so we will consider it — after the 16th Amendment is repealed. A VAT will be rationalized as necessary to restore fiscal equilibrium. But without ending the income tax, a VAT would be just a gargantuan instrument for further subjugating Americans to government. …Because the income tax is not broadly based, it radiates moral hazard: Its incentives are for perverse behavior. The top 1% of earners provide 40% of that tax’s receipts; the top 5% provide 61%; the bottom 50% provide 3%. So the tax makes a substantial majority complacent about government’s growth. Increasingly, the income tax is codified envy. A VAT is the political class’s recourse when the resources of the minority that is targeted by the envious are insufficient to finance ravenous government.
[…] was an opportunity to swap the income tax for a VAT, I would take that trade (assuming, of course, repeal of the 16th Amendment so politicians couldn’t pull a bait-and-switch scam). Just like I would swap the income tax […]
[…] the income tax with a national sales tax is theoretically appealing, but it’s either impractical (because there aren’t enough votes to repeal the 16th Amendment) or too risky (because the […]
[…] stated, unless the 16th Amendment is repealed and replaced with a new provision forever barring the re-imposition of any taxes on income, a VAT […]
[…] I also very much recommend what George Will wrote about the value-added […]
[…] George Will correctly warns that the VAT should be off the table until and unless the 16th Amendment is repealed. And Robert […]
[…] George Will and Robert Samuelson also have written good columns on the issues. […]
[…] Echoing George Will, something like a VAT should never be implemented unless the income tax is completely […]
[…] made two points. First, a VAT is less destructive than the current income tax. As such, if we somehow repealed the 16th Amendment and replaced it with something ironclad that would prevent the income tax from ever again haunting […]
[…] made two points. First, a VAT is less destructive than the current income tax. As such, if we somehow repealed the 16th Amendment and replaced it with something ironclad that would prevent the income tax from ever again haunting […]
[…] made two points. First, a VAT is less destructive than the current income tax. As such, if we somehow repealed the 16th Amendment and replaced it with something ironclad that would prevent the income tax from ever again haunting […]
[…] made two points. First, a VAT is less destructive than the current income tax. As such, if we somehow repealed the 16th Amendment and replaced it with something ironclad that would prevent the income tax from ever again haunting […]
[…] tax would only be acceptable if the personal and corporate income taxes were abolished – and the Constitution was amended to make sure the federal government never again could tax what we earn and …. But that’s not the deal Obama would offer. My fingers are crossed that Obama doesn’t offer to […]
[…] tax would only be acceptable if the personal and corporate income taxes were abolished – and the Constitution was amended to make sure the federal government never again could tax what we earn and …. But that’s not the deal Obama would offer. My fingers are crossed that Obama doesn’t offer to […]
[…] would only be acceptable if the personal and corporate income taxes were abolished – and the Constitution was amended to make sure the federal government never again could tax what we earn and …. But that’s not the deal Obama would offer. My fingers are crossed that Obama doesn’t […]
[…] would only be acceptable if the personal and corporate income taxes were abolished – and the Constitution was amended to make sure the federal government never again could tax what we earn and …. But that’s not the deal Obama would offer. My fingers are crossed that Obama doesn’t […]
I sat and watched VAT work in Germany for the past fifteen years (I left in January). It’s substantial there….at 19 percent….while you still pay income tax (near 24 percent), TV tax ($350 a year), gas tax ($5 a gallon), dog tax (from $30 to $200 a year).
At one point….VAT in Germany was a simple 8 percent and most everyone agreed it was ok. Even at 13 percent in the early 90’s it was still ok. But everyone is sitting there and counting every penny now. By the time you consider social security and health care insurance….there’s nothing left. No one has anything for a 401k package or emergency fund.
The more money the guys at the top (congressmen and senators) get….the more creative they will be in handing it out. Either you toss out expenditures or you face the reality that you will eventually go bankrupt.
[…] (via Dan Mitchell) […]