Fix the Deficit With a National Sales Tax?
Posted: December 15th, 2010 | Author: Joe | Filed under: Debt, Economy | Tags: deficit, Taxes, Value Added Tax, VAT | No Comments »Who thinks that imposing a national sales tax, or “Value Added Tax” (VAT) would be a good idea? Who thinks that such a tax would raise enough money to offset the deficit and allow the government to pay down the deficit?
If you agree with those statements, come a little closer so I can slap you!
It’s got to be the most idiotic idea of all time, yet there’s a growing push in the media and capitol hill for just such a thing. The most recent one that caught my attention was this one. They talk about the support the idea has on Capitol hill, and from naive citizens concerned about the run-away spending in Washington and the $14 Trillion deficit. That’s fine enough, I expect the drunken sailors of Capitol Hill (that’d be a great band name, by the way) to push a new tax. But you naive Americans out there who think the government has a revenue problem need to wake up.
The fundamental reason no new tax, no increase in tax rates and no national sales tax would solve the deficit problem is because the deficit is a result of out of control spending.
More money in, only means more money out.
Portugal, Spain, Ireland and Greece all have a Value Added Tax – most over 20%! It should come as no surprise that they all also have crushing public debt, sky-high deficits and hundreds of billions in unfunded entitlements. Sound familiar?
Congress needs to spend less than they bring in. Until that happens, any increase in taxes will mean even more spending and only exacerbate the deficit.
Besides, increased taxes result in decreased economic activity. Higher income taxes discourages upward mobility. Higher sales taxes, discourage buying. That’s not the way to grow an economy. That’s economics 101.
