The reality behind the VAT
Over at the very fine TaxVox blog, Howard Gleckman writes a good explanatory piece on the current VAT debate. But this one part really struck me:
Our current revenue system has reached its breaking point. To fix our terrible budget problem, we are going to have to cut spending. But we are also going to have to raise more revenue. And for the life of me, I don’t understand why we wouldn’t want to do so in the most efficient way possible. And that may lead us to a consumption tax in one form or another, Senate resolutions notwithstanding.
Me: That was directed at conservative critics of the VAT. Now from what I can tell, plenty of conservatives would have no problem with a VAT if it a) replaced the income tax and b) was designed to boost tax revenue by boosting economic growth. And as far as a way of increasing the tax burden, the budget cuts are going to have to come first. Optimize government, try to quick the pace of GDP growth and then raise taxes if necessary.