06-04-2015, 04:34 PM
(06-04-2015, 07:55 AM)Belsnickel Wrote: The problem with a VAT system is the same with any transaction based taxes, they are regressive in nature. People in the middle and upper-lower classes end up paying a higher percentage of their income in taxes than upper classes.
But that's where the money is! And it's not exactly transparent, which is why it's been so popular in Europe (now creeping above an average of 21%!).
I see a VAT as inevitable because we have structural spending issues that the current system simply can't fund. But I oppose it currently until they get their fiscal house in order, because giving them more money is no incentive to spend what they already have more prudently.
Consider entitlement reform first, which would probably entail a bump in FICA and a reduction in benefits...and just watch how that goes over. Social insurance SHOULD be self-funding, and if you want to make it progressive (and technically it's currently partially regressive), fine. But there should be two pots of revenues funding two pots of spending - entitlement and discretionary...and never should the two mix. At least then voters would have a better idea of what they're really voting for.
