On December 11, The New York Times ran a piece about how a value added tax might be instituted to pay down the federal deficit. After repairing the hole that my fist made while going through my wall, I rationally thought about what this would mean to me as a resident of New York City. Since a federal VAT would not eliminate any other taxes, as a New Yorker I would be paying on top of the VAT:
1) Federal Income Tax
2) State Income Tax
3) City Income Tax
4) State & Local Sales Tax
5) Property Tax
6) Social Security
7) Medicare
One of the major causes of the American revolution was taxation without representation. It is pretty obvious that taxation with representation is not all it's cracked up to be. VAT is totally regressive and would hurt lower income people, while increasing the cost of almost all goods and services. It's a rotten idea. You would not offer an alcoholic another drink, and we should not allow people who have shown no capacity for managing money the ability to get more money. Does anyone really believe that the money would be used for the avowed purpose? Look at how they are trying to fool around with TARP. How about the social security "trust funds". As former senator Fritz Hollings once famously remarked, "There ain't no trust and there aren't any funds".
The real problem is that no one in government has the courage or the will to really dig into government expenditures and reduce them. The defense budget is full of unnecessary expenditures for weapons that we will never use in wars that we will never fight. Do we really need 35,000 troops in South Korea? What does the Department of Education do? What about all of the departments with overlapping responsibilities that could be consolidated? We can't just blindly continue to feed the beast, because at some point the feed will run out.
