I know that I won’t make a friends here, but if this country DEMANDS that the government spend $4T per year (through our elected reps, including the Republican House), then we SHOULD PAY FOR IT...not dump it as debt to my kids and (future) grand kids. The VAT would go a long way in that direction, and it would make EVERYONE have to pay, not just the upper middle class and above, as it is now.
“What really worries me about a VAT is that it will enable politicians to increase the burden of government spending.”
Nope, not true anymore. We passed that point in late 2008 with TARP. We’re now on autopilot - whatever the government spends is TOTALLY DECOUPLED from revenues. So we might as well try to increase revenues as much as possible, so dollar doesn’t crash and throw us into a depression worse than the 1930s. And yes, any tax on the lower and middle classes WILL increase revenue - it’s the taxes on “the rich” that do not (as they get around them).
All done, have at me...
You make a pretty good case for a VAT, except that same “chosen” populations would be exempted from the VAT just as they are now from the FIT, probably via yearly rebate. It would become, essentially, yet another tax on production because only people who produce something (goods, services) would be paying it. And this new tax would be, as all VATs are, completely opaque; one would never know how much tax (on top of tax on top of tax) he’s actually paying, which is inherently undesirable from a taxpayer standpoint (but which has great allure from the VAT proponents perspective, granted.)