Everything You Need to Know about the Value-Added Tax

While in Sweden last week, I wrote several columns (here, here, and here) about that nation’s fiscal policy. But I also had a discussion about American fiscal policy with one of the tax experts at the Confederation of Swedish Enterprise. That included a discussion of the value-added tax (VAT). If you don’t want to spend […]

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How Value-Added Taxes Hurt Low-Income Households

I have written dozens of columns explaining why a value-added tax would be very bad for the United States, mostly because it would encourage and enable a much bigger burden of government spending. That argument is compelling when I’m speaking to conservatives (though not all of them, apparently!), but I need different arguments when talking […]

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The Value-Added Tax Leads to Higher Income Tax Burdens

As part of my (reality-based) opposition to a value-added tax, I testified to the Ways & Means Committee back in 2011. My primary argument against the VAT is that it would enable a bigger burden of government spending. I frequently share this chart, for instance, that shows that the nations in Western Europe were quite […]

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The Value-Added Tax: A Recipe for More Spending…and More Debt

My views on the value-added tax are very straightforward. Washington taxes too much today and wastes too much money today. Giving D.C. politicians even more tax revenue will encourage more fiscal profligacy. It is profoundly naive to think a VAT will lead to lower deficits and less debt. It is profoundly naive to think politicians […]

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Fiscal Fights with Friends: A Value-Added Tax Would Worsen America’s Fiscal Problems

Public finance experts sometime differ in how to describe a value-added tax. Is it a hidden form of a national sales tax, imposed at each stage of the production process? Is it a hidden withholding tax on income, imposed at each stage of the production process? Both answers are actually correct. The VAT is both […]

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The Value-Added Tax Is a Precursor for a Bigger Burden of Government Spending

I wrote yesterday about Japan’s experience with the value-added tax, mostly to criticize the International Monetary Fund. The statist bureaucrats at the IMF are urging a big increase in Japan’s VAT even though the last increase was only imposed two months ago (in a perverse way, I admire their ability to stay on message). Today, […]

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More Evidence that Value-Added Taxes Are Money Machines to Finance Bigger Government

The value-added tax was first imposed in Europe starting about 50 years ago. Politicians in nations like France approve of this tax because it is generally hidden, so it is relatively easy to periodically raise the rate. And that’s the reason I am vociferously opposed to the VAT. I don’t think it’s a coincidence that […]

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Another Reason to Reject the Border-Adjustable Tax: Value-Added Taxes Undermine National Competitiveness

My crusade against the border-adjustable tax (BAT) continues. In a column co-authored with Veronique de Rugy of Mercatus, I explain in today’s Wall Street Journal why Republicans should drop this prospective source of new tax revenue. …this should be an opportune time for major tax cuts to boost American growth and competitiveness. But much of […]

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Wisdom from Reagan: More Arguments against the Value-Added Tax

The left is very clever about accepting “compromise,” so long as the result is a larger burden of government. This is one of the reasons why I’m so concerned about Senator Cruz’s proposal for a value-added tax. Even though he wants a VAT for good reasons (to finance lower tax rates and also to reduce […]

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Ted Cruz, Rand Paul, Payroll Taxes, and the Value-Added Tax

My views on the value-added tax are very simple and straightforward. If we completely eliminated all income-based taxes, I would be willing to accept a VAT (or even a national sales tax) as a revenue source for government. But unless that happens, I’m unalterably opposed because it’s far too risky to give politicians two major […]

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The Value-Added Tax Should Be Political Poison for Advocates of Limited Government

It’s not my role to pick sides in political fights, but I am very interested in trying to make bad ideas radioactive so that politicians won’t be tempted to do the wrong thing. This is why I’m a big fan of the no-tax-hike pledge. The folks in Washington salivate at the prospect of getting more […]

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The Value-Added Tax: A Nixonian Scheme to Fund Bigger Government

In early 2013, a reader asked me the best place to go if America suffered a Greek-style economic collapse. I suggested Australia might be the best option, even if I would be too stubborn to take my own advice. Perhaps because of an irrational form of patriotism, I’m fairly certain that I will always live in […]

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The Left’s Dream Is a Value-Added Tax on the Middle Class, so Why Are Advocates of Small Government Helping to Advance that Awful Levy?

Some honest statists understand and acknowledge that you can’t have bigger government unless you target middle-income taxpayers. The New York Times endorsed higher taxes on the middle class in 2010. The then-House Majority Leader Steny Hoyer also gave a green light that year to higher taxes on the middle class. In 2012, MIT professor and former IMF official […]

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The Case against the Value-Added Tax

Even though I fret about a growing burden of government and have little faith in the ability (or desire) of politicians to make wise decisions, I somehow convince myself that good things will happen. Here’s some of what I wrote two years ago, when asked whether I thought America could be saved from a Greek-style […]

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Are Well-Meaning but Misguided Conservatives Being Seduced by the Value-Added Tax?

Libertarians are sometimes accused of being unrealistic and impractical because we occasionally talk about unconventional ideas such as competitive currencies and privatized roads. But having a vision of a free society doesn’t mean we’re incapable of common-sense political calculations. For example, my long-run goal is to dramatically shrink the size and scope of the federal […]

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Another Misguided Plan to Burden America with a Value-Added Tax

It’s no secret that I dislike the value-added tax. But this isn’t because of its design. The VAT, after all, would be (presumably) a single-rate, consumption-based system, just like the flat tax and national sales tax. And that’s a much less destructive way of raising revenue compared to America’s corrupt and punitive internal revenue code. […]

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Huge Value-Added Tax Increases in Europe Show Why Washington Politicians Should Never Be Given a New Source of Tax Revenue

The most important, powerful, and relevant argument against the value-added tax in the short run is that we can balance the budget in just five years by capping spending so it grows at the rate of inflation, a very modest level of fiscal restraint. The most important, powerful, and relevant argument against the value-added tax […]

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New International Monetary Fund Study Inadvertently Provides Very Strong Evidence against the Value-Added Tax

I’m not a big fan of the International Monetary Fund, largely because the folks in charge oftentimes advocate toxic policies such as bailouts, higher taxes, and currency devaluation. But there are some top-rate economists working at the IMF, and the bureaucracy has published some good studies about the economic benefits of reducing government spending and […]

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Regarding the Value-Added Tax, Josh Barro Is Completely Right…and that’s Why He’s Completely Wrong

I’ve written before how “The Value-Added Tax Would Be a Money Machine for Big Government.” Writing for Bloomberg, Josh Barro has a piece entitled, “Value-Added Tax Would Raise Tons for U.S. Coffers.” So you might think we see eye to eye on this issue, but that would be a rash assumption. While I see a giant […]

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New Evidence from Japan Shows Why Romney’s Interest in a Value-Added Tax Is so Troubling

In a recent column for the Wall Street Journal, I explained why Mitt Romney’s interest in a value-added tax is deeply troubling. One of my key points was that the VAT is a money machine for big government. But don’t believe me. Look at Japan, where the politicians see increases in the VAT as a […]

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Mitt Romney, the Value-Added Tax, and America’s European Future

My Iowa caucus predictions from yesterday were hopelessly wrong, probably because I was picking with my heart rather than my head. As I noted a couple of weeks ago, Mitt Romney’s openness to a value-added tax makes him a dangerously flawed candidate, and I hoped Iowa voters shared my concern. In a column for today’s […]

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You Should Support a Value-Added Tax…if You Want Bigger Government and More Debt

I testified before the House Ways & Means Committee earlier today. As always, my trip inside the belly of the beast was an interesting adventure. The tax-writing committee was holding a hearing on the value-added tax. I was on a panel with five other witnesses, and all of the other people testifying were sympathetic to […]

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The Value-Added Tax Must Be Stopped – Unless We Want America to Become Greece

Sooner or later, there will be a giant battle in Washington over the value-added tax. The people who want bigger government (and the people who are willing to surrender to big government) understand that a new source of tax revenue is needed to turn the United States into a European-style social welfare state. But that’s […]

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More Arguments Against a Value-Added Tax

The biggest long-term threat to fiscal responsibility is a value-added tax, as I’ve explained here, here, here, here, and here. So I’m delighted to see a growing amount of research showing that a VAT is bad news. Jim Powell has an excellent column at Investor’s Business Daily that makes a rather obvious point about the […]

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A Wide-Ranging Interview Covering Everything from the Gold Standard to the Value-Added Tax

The Free Market Mojo site asked me a number of interesting questions about public policy. I’m not sure all of my answers were interesting, but here are some snippets that capture my curmudgeonly outlook. I think it’s important to divide the topic into two issues, the policies that cause short-run fluctuations and the policies that […]

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Excellent Cartoon on the Value-Added Tax

Amazingly, it was published in the Washington Post. I have to confess, though, that I didn’t find it. I’m in the Cayman Islands for a conference and Jim Miller (Ronald Reagan’s second-term Budget Director and a great American) included it in his presentation. Needless to say, I swiped it from him so I could share […]

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Current System, Flat Tax, Fair Tax, or Value-Added Tax?

Here are four very short videos produced from an in-office interview I did at the Heartland Institute last week. Which tax system do you prefer? I talk about the current internal revenue code… …and the flat tax… …and the national sales tax (Fair Tax)… …and the value-added tax.

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Amusing Cartoon on the Value-Added Tax

Saw this on Redstate yesterday. Funny, but it will be sad when it becomes reality.

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A Value-Added Tax Is Not the Answer…Unless the Question is How to Finance Bigger Government

While admitting that spending restraint is the ideal approach, Tyler Cowen of Marginal Revolution asks whether a value-added tax (VAT) might be the most desirable of all realistic options for dealing with an unsustainable budget situation. Read his post for yourself, but I think a fair summary is that he is basically saying that a) […]

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The Left-Wing Drumbeat for a Value-Added Tax Gets Louder

Every so often, the other side tells the truth. They want higher taxes to make government bigger, and they’re not being shy about their goals anymore. In recent weeks, many senior Democrats and close Obama allies have called for a value-added tax. Now two senior people at the Brookings Institution have echoed that message. We […]

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