James Pethokoukis

The conservative case for a VAT

December 16, 2010

Over at NRO, Duncan Currie gives it his best shot:

Despite being more efficient than an ordinary sales tax, a VAT carries significant administrative costs, and piling it on top of the present U.S. tax structure would be a mistake. But using the VAT to eliminate a sizable amount of distortionary U.S. income taxes would yield a far more growth-friendly system than the one we have today. Over the long run, America must reorient its economy away from consumption and toward investment while boosting its dangerously low savings rate. A VAT is certainly not the only way to promote those objectives, but it should at least be part of the conversation.

How a VAT would affect growth

October 14, 2010

Just how would tacking a 10 percent value-added tax onto the current tax system affect the economy? Well, an Ernst & Young study commissioned by the National Retail Federation came up with this result:

VAT Attack! Will business go for it?

July 12, 2010

This WSJ story implies Big Business would accept a value-added tax for several reasons:

One VAT to rule them all!

July 1, 2010

Just how big a value-added tax would it take to solve America’s budget woes through tax increases alone? ┬áMonstrously big, according to the Tax Foundation:

How Greek debt crisis could save America

May 24, 2010

It’s absurd. Uncle Sam is likely to run up an additional $11 trillion in debt over the next decade. But Washington only replies with minor budgetary tweaks. First, the Obama administration says it wants to freeze some domestic spending for three years. Then it creates a new healthcare entitlement program “paid for” through tax increases and unlikely spending cuts. Next up, the Obama administration creates a deficit reduction panel that not even its members think will work. And now the Obama administration wants new “rescission” authority to cut billions from congressional spending bills — excepts it’s “trillions” that are the problem. None of these measures favorably alters the budget’s perilous trajectory.

Mankiw on the VAT

May 3, 2010

A nice primer on the issues surrounding a value-added tax from Greg Mankiw. This is the key part for me:

Wealth taxes, Washington’s next bad idea

May 3, 2010

Some Democrats seem to have no problem raising the cost of capital.  Dividend taxes rates are scheduled to triple, while capital gains rates will only increase by a mere 60 percent. But as a I poke around the liberal idea factories here in Washington, I am hearing more and more about wealth taxes on the wealthy, just like they have in Europe.

Becker vs. Posner on the VAT

April 26, 2010

The online conversation between Gary Becker and Richard Posner is one of my favorite things on the web. Currently they are taking on the the idea of the US implementing a value-added tax. First a bit from Becker, as excerpted by me:

The reality behind the VAT

April 22, 2010

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:

The latest on Obama and the VAT

April 22, 2010

OK, here is what President Obama said on CNBC to reporter John Harwood about a value-added tax: