Those who know me know that I have a crush on Mary Katharine Ham. That I find her very attractive does not diminish in the least the brilliance of this tour de force on the onrushing VAT to supposedly pay for health care. Let’s take a few paragraphs from the middle:
Remain extremely skeptical, folks. No matter how much lovely alliteration Obama uses to describe this plan, it’s just another pathway into your wallet for the federal government. It’s just another source to tap for revenue when they’re unwilling to make “tough choices.” It will go up and up, and the relief the nation sees on the corporate income tax or the income tax as a trade-off will be precious little in the Congress we’ve got now.
It should also be noted that the VAT costs $3 billion just to collect in Canada, according to the National Post, on top of the added cost to every single item you buy, every day.
Luckily, because the VAT is a highly visible tax and disproportionately affects the poor, constituents and even their tax-happy Democrat representatives are likely to be wary about enacting one. Heck, even the floating of one might be enough to earn Republicans a few points on the generic ballot.
I hate to have to quibble on a point, but I must. As Charlie Sykes said in his post on this, “Don’t count on it. Just ask smokers.” In fact, depending on the labeling requirements, it can be very easy to hide this (no, I will not say any more; even though I realize that anything I can think of the tax-and-spend-and-tax-and-spend-and-tax-and-spenders can, I’m not in the business of making their jobs easier).
With that out of the way, the fact that every level of production sees a sales tax which is based on the difference of the purchase price of the product (or raw material) and the sale price of the product is a massive drain on the producer. Even a “simple” product like Mountain Dew has 16 different components the bottler has to keep track of.
Related to that, it is impossible to claim that a VAT of X% will not cost more than a end-user sales tax of the same X%. That is becasue not every raw material involved in the manufacture of, say, Mountain Dew has the same number of steps between the individual raw materials and final consumption.
While I won’t steal more of Mary’s content, I do have to comment on another aspect she brought up – the Left’s proposed dual-mode tax scheme. The existence of two different stages of taxation (in this case, wealth-acquisition and wealth-expenditure) makes it easier for government to raise first one stage, then the other. The older among us in Wisconsin remember when the sales tax was a “mere” 4%, and then “temporarily” raised to 5%. In a couple weeks, depending on one’s locale and choice of expenditure, that will be as high as 6.85%. Meanwhile, there’s a new, higher top income tax bracket in that same budget that will hike Milwaukee County’s sales tax rate by a percentage point.
So, what are you still doing here (other than wondering why The Weekly Standard doesn’t offer comments)? Go. Read! NOW!
