How would VAT tax “claw back payments made to the gibmedats and dindunuffins. I am under the impression that they don’t get Social Security because they don’t pay in.
Among my concerns with VAT tax:
1. Like article says, it decouples payments made by workers from their SS payouts.
2. VAT tax is one of the things that ruined European Economy
VAT is a consumption tax, but not all consumption taxes are VAT taxes.
Consumption taxes like a sales tax at the federal level that replaces all income and payroll taxes claws back a portion of every federal payment made to anyone. It’s is very easy to avoid income taxes if you are a non worker, no income, no taxes. It is very hard to avoid a sales tax because everyone buys something.
Even if they give a check to the didntdunuffins to cover the sales taxes they paid, they are still going to pay sales taxes again when they spend it, so a percentage gets clawed back again.
That’s why sales taxes are regressive and income taxes are progressive.
I live in the very broke no sales tax state of Oregon, where income avoidance is the main hobby of the citizenry. The underground economy is officially about 11% of state GDP but I think it’s closer to 25-30% in some counties.