http://neveryetmelted.com/2009/10/01/obamas-next-big-idea/ The essential American soul is hard, isolate, stoic, and a killer. It has never yet melted. -- D.H. Lawrence Fri, 25 May 2012 12:39:53 +0000 hourly 1 http://wordpress.org/?v=3.3 http://neveryetmelted.com/2009/10/01/obamas-next-big-idea/comment-page-1/#comment-146057 Scott D Mon, 05 Oct 2009 14:11:05 +0000 http://neveryetmelted.com/?p=7286#comment-146057 Economically speaking, a VAT tax IS a less destructive tax than a tax on income. However, practically, it has a dark side. It is a tax that nobody pays directly and, therefore, one that doesn't generate much opposition each time it is increased. Every April I encounter numbers of otherwise bright people who say, "I didn't pay taxes this year. I got a refund." That's what will happen with a VAT. More lulling the populace into mindlessly turning over their resources to government. The income tax -- perverse as it is -- at least has a practical limit. Once you start taxing incomes at 50%+ marginal rates, two things happen: Revenue falls and people start holding tea parties. Economically speaking, a VAT tax IS a less destructive tax than a tax on income. However, practically, it has a dark side. It is a tax that nobody pays directly and, therefore, one that doesn’t generate much opposition each time it is increased. Every April I encounter numbers of otherwise bright people who say, “I didn’t pay taxes this year. I got a refund.” That’s what will happen with a VAT. More lulling the populace into mindlessly turning over their resources to government. The income tax—perverse as it is—at least has a practical limit. Once you start taxing incomes at 50%+ marginal rates, two things happen: Revenue falls and people start holding tea parties.

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