The Washington Post has an article today on the value-added tax (VAT). Some Democrats are considering the sales tax as a way to pay for the expanding costs of social programs. Everyone realizes we’re currently on a course to bankruptcy; however, it’s going to be a difficult to create a national sales tax without taking a beating at the polls.
The fascinating part of the article is that it’s not even a consideration that perhaps the government shouldn’t be in the health care business. No state has been able to create a long-term viable health care system. European states are already taxing their citizens to death and the health care is expensive, slow, and poor. It should also be noted that much of Europe has had the benefit of not having to pay for defense. In many ways Europe has had perfect conditions for fantastic health care and it’s still a failure. Despite these facts, Ezekiel Emanuel, the brother of White House chief of staff Rahm Emanuel, has written a book titled “Health Care, Guaranteed.” Emanuel argues that we can pay for this utopian dream by taxing the crap out of people.
What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, “100 Million Unnecessary Returns,” Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 — about 90 percent of households — from the income tax and would lower rates for everyone else.
Does this sound too good to be true? Of course it does; this is complete nonsense. An argument could be made that some of the more conservative states with lower taxes could absorb the new sales taxes, but what about all those states in the North? People are already leaving in droves, and a national sales tax would make the economic climate in those states even worse.
I don’t see how anyone could sell the VAT tax without getting rid of the income tax. It seems as if this the author of this particular article is more worried about all the people who aren’t paying (income) taxes. Soaking the rich and burdening corporations with higher taxes (oh, btw, corporate taxes are passed on to consumers) isn’t going to be good for the economy. I’m all for a simpler tax system, but we can’t continue to penalize people for being successful. Democrats are slowly morphing from the party of the have-nots to the party of hand-outs.
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