And our government wants us to agree to a VAT? No way!
There is plenty of waste to cut at the federal, state and local level. Before they cut pensions, they need to cut PBS funding by 100%, along with ALL funding to any local community organizations. Let them compete locally for tax dollars.
“And our government wants us to agree to a VAT? No way!”
This story shows why. The courts (to the degree entitlements are defined as “rights”) and politicians will ensure that actual spending cuts are minimal, notwithstanding all the “waste” in government. After all, one man’s waste is another’s income that won’t be given up without a fierce fight.
So the path of least resistance will always be to keep raising the VAT. It’s less visible than income or payroll taxes and has the additional advantage that you can offload part of the burden onto other countries via their tourists etc.
Fiscal conservatives view steadily rising VATs as a problem, but progressives who have always believed in bigger government, merely view it as the best way to extract the most tax resources with the less squawking.
Well before Obama was elected, Rahm Emanuel’s brother Zeke was shopping around a health reform plan in which the entire health system would be funded by a dedicated VAT. Having a dedicated VAT was to ensure health care didn’t have to “compete” for general fund revenues with other public programs such as defense or criminal justice. Using a VAT rather than dedicated payroll tax made it easier to steadily increase the rate as growth in health care predictably kept outstripping the rate of growth in the economy.
We already have a VAT.
It's called the corporate income tax, and it's the highest in the world.