National Sales Tax No Longer Taboo?

[Nitroadict]

from: http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052602909.html

At a White House conference earlier this year on the government’s budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama’s policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

“There is a growing awareness of the need for fundamental tax reform,” Sen. Kent Conrad (D-N.D.) said in an interview. “I think a VAT and a high-end income tax have got to be on the table.”

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American – a tangible benefit that would be highly valuable to low-income families.

Liberals dispute that notion. “You could pay for it regressively and have people at the bottom come out better off – maybe. Or you could pay for it progressively and they’d come out a lot better off,” said Bob McIntyre, director of the nonprofit Citizens for Tax Justice, which has a health financing plan that targets corporations and the rich.

A White House official said a VAT is “unlikely to be in the mix” as a means to pay for health-care reform. “While we do not want to rule any credible idea in or out as we discuss the way forward with Congress, the VAT tax, in particular, is popular with academics but highly controversial with policymakers,” said Kenneth Baer, a spokesman for White House Budget Director Peter Orszag.

Thoughts? The discussion @ the /r/econ page seem to indicate not everyone is stupid enough to fall for this (a VAT on top of current taxes, etc.)

[billott1]

Simply more economic destruction. The only way to help voluntary society in the face of its destruction at the hands of government is to have government stop spending and reduce taxes. This is especially true now that the government is attempting to run formerly private enterprises.

There is not now, nor has there ever been, a mechanism where one person steals money from another by force that increases the prosperity of both parties.

[jmorris84]

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. [u]But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American – a tangible benefit that would be highly valuable to low-income families. [/u]

Very scary stuff…

[Nitroadict]

@Bogart

Simply more economic destruction. The only way to help voluntary society in the face of its destruction at the hands of government is to have government stop spending and reduce taxes. This is especially true now that the government is attempting to run formerly private enterprises.

There is not now, nor has there ever been, a mechanism where one person steals money from another by force that increases the prosperity of both parties.

No doubt, what worries me moreso is whether it actually passes or not. I’m going to err on the side of populist anger & hope a VAT wouldn’t pass simply because it might become or at least continue to be somewhat of a political third-rail.

The pumping of trillions has already been done, however; at this point, I think the best any of us can hope for is that nothing is able to be done thanks in part to a hectic political climate (i.e. worse-case vs. worser-case).

What is encouraging, however, is that more are realizing that tax cuts with reduced spending is the way to go (to make the situation less worse than it already is on it’s way being), & that tax cuts without reduced spending (via the GOP / Bush) is what should be opposed as the “alternative”.