Americans should just say “NO” on VAT!!!

Why is it that so many economists think it is their duty to assist tax-greedy politicians in getting the “most eggs for least squawking” or the “most bacon with the least squeal” from taxpayers? (Forgive the homely euphemisms that were inspired as was this entry from spending time in the agrarian paradise of the Deep South of the USA!)

One of the worst instances involving the greatest sense of naiveté about political reality concerns economists that support imposing a VAT (value-added tax) on American businesses & consumers.

Economists generally accept that taxing consumption does less economic harm than taxing income. As such, it would be an improvement if income taxes were REPLACED by a tax on consumption.

It is irresponsible & dishonest to imagine that the US federal government would eliminate or reduce income taxes in combination with a VAT.

One “Trojan horse” tactic relating to VAT is to suggest that it would only be a “modest” rate of say 5%. Proposing a low initial rate is a tactic to institute a new tax system that would be continuously gamed by irresponsible & mostly-unaccountable public officials seeking more revenues. As it is, the “painless” nature of a tax being built into prices allows stealth increases in rates as occurred in countries in the European Union where rates moved ever-higher from 10% to an average of nearly 20%.

Economists with a shred of honesty would promote sensible tax reform so that more government-provided goods & services are paid with “user fees” that bring balance to supply & demand.

You may love bacon but a VAT would support the addiction of tax-hungry pols to “pork” that is bad for economic health:

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About christopher

Content of "Natural Order" attempts to reflect the commitment of Universidad Francisco Marroquin to support the development of a society of free & responsible individuals. The principal commentator for this blog is Christopher Lingle.

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