Wednesday, November 27, 2002

VAT, Take II: If I take your meaning, a VAT (at least as a sole means of revenue) functions more like a luxury surtax than a progressive tax - everyone pays the base tax on necessities, but the wealthier pay an additional amount on their (obviously higher) discretionary spending. Am I right? Okay. Suppose I could show that the numbers would run about the same, flat tax vs. VAT. That is, the dollar amount that Earner X pays would be roughly the same under both plans. (I have no doubt that the number crunchers could set this up to work.) At that point, the only legal way to avoid paying your "fair share" would be to live below your means, which is unlikely. In addition, there would be pressure not to live above your means either. I'm not sure, then, what the objection is, unless it's a philosophical one. (And, my support of consumption taxes aside, the philosophical objections to them can be pretty convincing.)

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