VAT

The more I think about it, the more I think:

1) We’re going to have to raise taxes to balance the budget. Right now, the tax burden is lower than its historical average in the post-WW2 era. The money for Medicare, Social Security, Medicaid and defense — none of which will ever be cut — has to come from somewhere.

2) A Value Added Tax is the least destructive way to get there. It’s much better than the stupid Fair Tax, which I’ve attacked here. And if it replaced much of our existing system, the capital and potential freed up would more than compensate for the deleterious effects of a tax increase.

Of course, the GOP is not interested. They’re too busy screaming, “They’re raising taxes! Taxes! Taxes! Taxes! AIEEEEEEEE!” The question is not whether taxes are going up; the question is whether they can be raised in the least destructive way possible.

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