The Washington Post reports that a national sales tax, embraced by some because it would prop up the faltering social welfare state, is gaining fans in Congress.
We’ll see how far lawmakers like Senate Budget Committee chairman Kent Conrad (D-North Dakota) who think such a tax would be a good thing for America get with the proposal.
“There is a growing awareness of the need for fundamental tax reform,” Conrad said. “I think a VAT and a high-end income tax have got to be on the table.”
The paper describes a VAT, or value-added tax, as “a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor.”
I suspect such a tax, depending on how it is administered, might actually provoke civil unrest in America because consumers would quickly tire of shelling out extra for everything or virtually everything they purchase. The beauty of income taxes, from the statist point of view, is that they are generally withheld at the source, and so income earners don’t feel the same kind of pain at the loss of money they never had in the first place.
Europeans and Canadians may put up with this burdensome tax scheme but my guess is Americans would not.
Meanwhile, Phil Kerpen of Americans for Prosperity has a good summary of the ramifications of bringing a national sales tax to the U.S.