There’s been a lot of discussion about Mitt Romney’s appeal – or lack thereof – among supporters of limited government.
To put it mildly, many libertarians and conservatives are underwhelmed by his less-than-stellar record on healthcare, his weakness on Social Security reform, his anemic list of proposed budget savings, and his reprehensible support for ethanol subsidies.
Notwithstanding this dismal track record, some advocates of free markets argue that anybody would be better than Obama.
But that’s not necessarily the case. Economic history shows that the burden of government often expands the most under Republicans, with Nixon and Bush (either one) being obvious examples.
On the other hand, even a skeptic like me has admitted that Romney’s record in Massachusetts is difficult to assess because he was governor of a very left-wing state and he had to deal with a state legislature with heavy Democratic majorities.
That being said, there’s a new development that suggests Romney may be an unacceptable alternative to Obama. In an interview with the Wall Street Journal, he basically said he is willing to consider a value-added tax for the United States. Here’s the relevant passage.
He says he doesn’t “like the idea” of layering a VAT onto the current income tax system. But he adds that, philosophically speaking, a VAT might work as a replacement for some part of the tax code, “particularly at the corporate level,” as Paul Ryan proposed several years ago. What he doesn’t do is rule a VAT out.
For those who are not familiar with a VAT, it is a version of a national sales tax, but imposed at every stage in the production process and embedded in the price of goods and services. Perhaps more important, it is despised by everyone who wants to limit the size of government. This video explains how it works and why it is a money machine for big government.
Simply stated, this is an awful tax. If it ever gets implemented in the United States, the battle will be over. America will descend to European-style stagnation, eventually leading to fiscal crisis.
Any politician that supports a VAT (or even hints at supporting a VAT) should not be allowed anywhere near the White House. That applies to Mitt Romney. And it should be the rule for Paul Ryan as well.
But what about Barack Obama, you may be asking. Hasn’t he said nice things about a VAT?
Not surprisingly, he has been sympathetic, appointing VAT sympathizers to high office and remarking that a VAT is “something that has worked for other countries.”
But there’s no way a VAT will happen if Obama gets reelected. Republicans will be overwhelmingly opposed, even if only for shallow reasons of partisanship.
But if Romney wins and decides to push a VAT, many Republicans will say yes because of loyalty (much as many GOPers went along with Bush’s statist agenda) and many Democrats will say yes in order to get a new source of revenue to expand government.
The consequences, as explained here, would be disastrous.
P.S. For a humorous – but accurate – perspective on the VAT, take a look at these clever cartoons (here, here, and here).
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[…] One of the most worrisome things about Mitt Romney is that he repeatedly refused to rule out a value-added tax when asked by the editors of the Wall Street Journal. I don’t trust politicians when they say […]
[…] final point. I don’t care if you like Mitt Romney or dislike Mitt Romney. But, given his less-than-sound views on the VAT, I want everybody to be prepared to hold his feet to the fire if he happens to prevail on November […]
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[…] approach . Romney, meanwhile, mostly wants to tinker with the current system (when he’s not saying worrisome things about a value-added tax). Rate this:Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike […]
[…] already explained why Mitt Romney is not a proponent of liberty. This cartoon underscores that sentiment and also shows why he will have a problem going after […]
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Romney says he “Doesn’t like the idea of a VAT”. How you spin that to say that somehow Romney will bring a VAT down on us is beyond me. It’s another case of people blatantly misinterpreting what Romney says.
Dan– I appreciate your articles and believe you have contributed a lot of substance to conversative thinking for quite some time now. That said, I’m struggling to understand how you can read so much into very little that has been published on Mitt’s position here. First off, he says he doesn’t like the idea of layering a VAT onto the current tax system, and that he’s only open *philosophically* to replacing some of the tax code with a VAT. I’m not seeing how you’re inferring that with Mitt comes a VAT. Aren’t you making a lot of assumptions here? I’m also wondering… which candidate are you for? I think Mitt’s the best one standing, and certainly the only one I can see beating Obama out of this Republican field. I’d also bet you $10,000 that if we elect Mitt, we would not see a VAT during his tenure. Seems like you’re reaching a bit on this one.
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You are absolutely right and the evidence can be presented as purely empirical. It is exactly because VAT has proven the irresistible banana peel to big government and economic decline, that it should be feared like the plague.
Yet, Romney is the leading conservative candidate! What does that finally say about Americans?
To me it says that finally, after two centuries of aberrant exceptionalism America’s freedom margin advantage over the rest of the world has now worn out to its thinnest level — and the tipping point of decline is being reached. Americans are now about to join the Europe they once left in pursuit of individual freedom. Against a backdrop of THREE billion people who are fast ascending towards western freedom levels, both America and Europe are doomed to decline – they will simply be absorbed into the world average. A world where the average American earns only a little more – or even say two times more – than the world average, will be a world that feels monumentally different to what we have today.
So my advice is, “Don’t be stupid! Throttle down, relax, sign up for Obamacare, engage non-pecuniary activities that improve your standard of living and thus finally eat in one mere decade the freedom seed left by American generations past. There are still enough idiots who will work (half-work) for HopeNChange for a while to have a big party where we burn down the house.
But don’t get too drunk and hang over! Because you have to prepare yourself and your descendants to jump ship to another country in a decade or so as America’s decline towards the world average picks up pace and the vicious cycle accelerates. And this ship jumping has to be planned, especially because America (in an aberrant move reminiscent of truly oppressive regimes and the coming Armageddon) has plugged the safety exit valve with “exit taxes”, i.e. emigration taxes of all oppressive things. So I predict that things will spiral down into a really nasty situation during the sinking years of the American Titanic.