Discussion of a VAT as a replacement for the income tax is a valuable part of the fiscal policy debate -- for one thing it would "broaden the tax base and make everyone pay for the welfare state that still has substantial political support." But I doubt the conclusion:
The solution is to make the case for a massive overhaul of the tax system, and transition the system from one that relies on income (corporate and individual and Soc. Sec.) taxation to one that relies on taxing consumption (VAT, National Sales Tax, or FairTax). This is a wonderful opportunity for a party of ideas (Republicans, before they succumbed to corrupt Hastertism) and a vibrant think tank community (before they began to resemble an echo chamber of conservo-libertarian apparatchiks promoting stale doctrine) to lay the ground work for a 3rd and 4th “American Century.”
My fear is that we would have the promise of "a transition," but not the reality, so we'd up with a VAT and the income tax. I still prefer a flatter, simpler version of the income tax. That could be screwed up later, too, of course, as politicians got tired of spending cuts and reverted to their truer "get more to spend" natures, but it would harder for them to hide their actions.
Comments
It's easy to understand why rich people favor a flat tax. But why do working-class people, like the editors of small papers, favor it? Like the tea partiers, you seem to be fighting against your own interests.
The progressive tax works, at least reasonably well. Remember our last federal budget surplus? Remember the rich folks' tax cut that blew the surplus? Remember the earlier, Reagan rich folks' tax cut that ballooned the deficit?
You can say you're a deficit hawk all you want, but you can't expect me to take you seriously if you think we can get there by asking the rich to pay less in taxes.
And no, you can't get rid of Medicare or Social Security. Old people vote.
Unless you are willing to substantiallly reduce military spending, you're practicing voodoo economics, just as the elder Bush pointed out so many years ago. He was right.
I'm sure you're going to have some libertarian theory to offer here, but there is a reason almost nobody takes libertarians seriously. Your theory, whatever it is, will never pass Congress. And it shouldn't.
1. Well, I said "a flatter, simpler version," not a flat tax, so do we have two different arguments that you want to pretend is the same argument?
2. I presume liberals, conservatives and libertarians each think quite highly of their own views and rather dismissively of the other groups', so pardon me if I don't go hide in a corner just because you think "nobody takes libertarians seriously." I'm guessing you won't get bent out of shape on knowing that when I hear someone start babbling about "the rich," I know exactly where he's coming from and everything he's going to say.
3. Why do the people who think government spending is excessive always have to be the ones to justify their positions in minute detail by listing everything they would cut? Why don't you justify your side for a change? How much spending are you willing to accept? What percentage of GDP? How close to a Greece-style meltdown do we have to get beore you're willing to say enough? How much control of your life are you willing to give up?
The single biggest problem libs have with a straight flat tax across the board is their twisted definition of fairness. I.E. they can't grasp the concept of fairness.
Their idea of fairness is "From each according to his ability, to each according to his needs!". (Marx, Karl (1875).)
Also, the fact that 48% of taxpayers didn't even PAY any federal income tax in 2009 should make even the most sympathetic middle class liberal democrat want to hurl.
Almost half! And you (littlejohn) wonder why we're pi**ed about taxes???
Do you know a reason why almost half didn't pay federal income tax?
It all began in 1975, when Pres. Ford introduced the Earned Income Tax Credit, which entitled low-paid workers to a rebate. Since then, Presidents from both parties have expanded the program, politically popular because it encourages people to work. The credit now costs more than $50 billion dollars a year, according to the Tax Reform Center. As a result, individual families with children can receive as much as $5,600 a year from the feds.
Guess we can blame the latest version of progressive taxation on the GOP, lol!
AJ
AJ, you can blame it on a whole host of people and factors, technically you can lay the blame at the feet of the congress in 1913, the sad fact remains that right now, today, half of the taxpayers in this country are not paying anything. Blame anybody you want I don't care, I want it to be FIXED.
I'm sick of paying thousands of dollars a year while HALF of my fellow Americans are getting a FREE ride.
What is also rather ironic is how rich democrats support higher taxes, yet always fail to pay them (see Geithner, Rangel, Kerry etc)..