by Smitty
I concur with Ace’s objection to the idea of a VAT:
It should go without saying that the VAT is an exceptionally bad idea, whether it’s paired with a flat tax or a fair tax or any other tax and whether it replaces the federal income tax or not. Whatever its merits, they are outweighed by its key features: the VAT obscures for the taxpayer just how much money is being sucked up by the government; it is prone to Congressional abuse; and it is, in the words of economists, “efficient.”
Yes, you can put VAT on each and every sales receipt. But unless the taxpayer keeps and diligently tallies every receipt, he will have no idea what he’s ended up handing over to Uncle Sam.
This feature of the VAT is a tax-and-spend liberal’s wet dream because it keeps the taxpayer-voter in ignorance of how much of his property the government is appropriating over time. Even under the current complicated income tax scheme, the taxpayer-voter has a pretty good idea of how much of his annual income gets sent off to Washington, D.C. And he can then make reasonable predictions and demands and votes when Congress starts fiddling with tax rates. But for the average American, if Congress were to adjust a VAT, the question “how much does this affect me or my business” becomes difficult to answer. Again, unless the taxpayer-voter has been keeping track of his consumption.
And I respect Herman Cain very much. However, if you’re conservative, you might want to ask yourself: after Cain, who does the conserving?
Cain may respect Greenspan for having been a good Federal Reserve chair, for some value of ‘good’. However, as far as I can tell, the whole concept of the Federal Reserve has gone pear-shaped. And I don’t see how the VAT avoids sitting alongside the Federal Reserve as another tool for avoiding doing the correct, conservative, reasonable, responsible thing: saying ‘NO’.
- Got a problem balancing the budget? VAT!
- Need money to fund a project to buy some votes? Jack that VAT!
- Got an economic feevuh? Call VAT man!
- VAT! What is the question?
None of this is intended as a swipe at Herman Cain, whom I’ll happily support as GOP nominee. I’m just concerned that the real problem we face is an over-powered DC, and a VAT sets a precedent that, if history means aught, will be molested horribly within my lifetime.
Unlike the Boomers, who really don’t seem to care fig #1 about any generation past themselves, I think that we have to look really long and hard. The World’s Youngest Blogger is the guy I have to answer to about how we deal with the death of Progressivism. VATs are a really smashing success in Europe, as long as you don’t care that it’s your wallet getting smashed.
What I want to hear from candidates is how they’re going to deflate the Federal over-reach bubble. A federalist approach could diminish DC and restore the power of states and the federal government to act as vertical checks, even as we restore horizontal checks of Congress on the Executive. A VAT, on its own, won’t kill the American experiment, but it could be a contributor, mixed in with all of the other legacy Progressive ideas with which we seem strangely comfortable.
Update: linked at The Lonely Conservative.
Update II: A moment of agreement with Grover Norquist:
Norquist was even less sanguine about Cain’s 9-9-9 plan. “Having three taxes, all of which can grow – it’s like having three needles in your arm taking blood out, it’s much more dangerous than having one,” Norquist explained.
