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Monday, July 6, 2009
4:49 PM EDT
Jacob Feldman

Note to Bartlett: VAT isn't a substitute for higher taxes, it's just another tax

Sacrificing your dog to the boa constrictor does not prevent you from being the entrée. If you’ve seen “Snakes on a Plane,” you know it’s better to run away rather than stop and feed the gluttonous snake. There’s a gruesome scene where a character is running away from a boa constrictor. To save his own hide, he grabs a foo-foo dog from a woman passenger and tosses it to the snake.  This act of cowardly self-preservation turns on the man, though: in taking the time to give the snake another snack (which the snake gladly accepts), the man slows down just enough to be eaten by the snake himself. Aesop it isn’t, but the lesson is a good one for tax fights today.

 

Similarly, American taxpayers need to run away from the proposed value added tax (VAT) rather than appease Obama’s “glut-the-beast” tax policy to pay for health care. Forbes columnist Bruce Bartlett mistakenly argues that throwing a VAT at the Obama administration will prevent an increase in other taxes. Bartlett presumes erroneously that creating a VAT is a substitute for other forms of higher taxation.

 

A quick examination of EU history confirms that a VAT only bait-and-hooks more government taxation. Bartlett conveniently neglects to mention that in Europe a VAT accompanies increased taxation on personal or corporate income.

 

Increasing variety in the beast’s appetite only… increases the appetite.

 

Posted by Jacob Feldman on Monday, July 6, 2009 4:49 PM EDT
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