emazur
04-18-2010, 02:37 AM
http://www.brookings.edu/opinions/2010/0414_VAT_aaron_sawhill.aspx
A major portion of deficit reduction over this period is going to have to come from tax increases. The cleanest way to raise enough revenue to prevent fiscal crisis is to do what every other developed nation in the world has already done -- impose a broad tax on most consumption.
Such a tax should be collected at all stages of production in comparatively small amounts, based on the value added at that stage of production. What this means is that a producer that buys $70 worth of inputs from other companies and sells its product for $100 pays tax on the $30 of "value added." If all producers, including retailers, pay this tax, the full value of each good that consumers buy is taxed.
Liberals fear that a consumption tax is regressive, and conservatives fear that it would stimulate greater government spending, but the evidence from other countries suggests both fears are exaggerated.
Given both the importance of preventing debt from ballooning at a rate that could produce another financial crisis and the constraints on filling the budget gap with spending reductions alone, a value-added tax seems almost inescapable.
Winston Churchill once said of democracy that it is the worst form of government except for all the others. Much the same can be said of the value-added tax. It is the worst way to prevent excessive growth of public debt, except for all the others.
Goddamn, Brookings sucks. When they're not calling for a new world order http://www.brookings.edu/papers/2009/09_g20_bradford_linn.aspx
they're calling for more taxes, and in the same article linked up top, they're saying we need to be spending even more
A major portion of deficit reduction over this period is going to have to come from tax increases. The cleanest way to raise enough revenue to prevent fiscal crisis is to do what every other developed nation in the world has already done -- impose a broad tax on most consumption.
Such a tax should be collected at all stages of production in comparatively small amounts, based on the value added at that stage of production. What this means is that a producer that buys $70 worth of inputs from other companies and sells its product for $100 pays tax on the $30 of "value added." If all producers, including retailers, pay this tax, the full value of each good that consumers buy is taxed.
Liberals fear that a consumption tax is regressive, and conservatives fear that it would stimulate greater government spending, but the evidence from other countries suggests both fears are exaggerated.
Given both the importance of preventing debt from ballooning at a rate that could produce another financial crisis and the constraints on filling the budget gap with spending reductions alone, a value-added tax seems almost inescapable.
Winston Churchill once said of democracy that it is the worst form of government except for all the others. Much the same can be said of the value-added tax. It is the worst way to prevent excessive growth of public debt, except for all the others.
Goddamn, Brookings sucks. When they're not calling for a new world order http://www.brookings.edu/papers/2009/09_g20_bradford_linn.aspx
they're calling for more taxes, and in the same article linked up top, they're saying we need to be spending even more