I Couldn't Come Up With a Clever Headline About The VAT, But Here's a Really Interesting Debate About It


Over at AOL News, there's an interesting set of four op-eds looking at the Value-Added Tax, increasingly bandied about as a cure for what ails federal deficitis.

Reason columnist and Mercatus Center economist Veronique de Rugy reprises her recent column here regarding the VAT:

If advocates of the VAT are serious about fixing our current fiscal crisis, they shouldn't be asking for a VAT alone but for a VAT and a credible commitment (one that no one can renege on once the VAT is in place) to dramatically cut spending. Short of such commitment they can't be taken seriously.

More importantly, focusing on revenue mechanisms such as a VAT in deficit-reduction discussions misses the fundamental point that spending, not revenue, is the cause of our financial troubles. Looking for new sources of revenue moves our attention from what needs to happen now: slow or stop spending increases and reform entitlements, sooner rather than later. For all these reasons, I am against the VAT.

Whole thing here.

Read the three other pieces on the VAT by Ira Stoll, Donald Marron, and Henry Aaron and Isabel Sawhill.