Are we about to get a national sales tax?
The Washington Post reports that, "Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax."
Of course, they're not talking about going through the nearly impossible task of amending the Constitution to get rid of the income tax first, as "Fair Tax" supports propose in their support of a national sales tax--they're talking about a new tax. Proponents argue that if a new national sales tax were imposed, "the nation's debt would stabilize."
A quick look at the spending history of the many European nations that added a national sales tax, or a "value-added tax" (VAT), clearly shows that is would not likely be the case. What instead tends to happen is a permanently increase the size of government and ever-higher tax rates.
In an excellent summary of the VAT in European countries, economist Dan Mitchell points out that
...the burden of government in Europe used to be only slightly larger than it was in the United States. Beginning in the late 1960s, however, European countries began to implement VATs. Since then, the overall tax burden in Europe has climbed rapidly.
A graph Mitchell created in another study on taxation called "Fiscal Policy Lessons from Europe" helps make the point:

Mitchell also addresses the implication that somehow, because the United States is the only developed country in the world without a VAT, we are missing out on something. The economic data shows the only things we're missing out on are less prosperity, higher taxes, and lower living standards:
Per capita economic output in the U.S. in 2003 was $37,600—more than 40 percent higher than the $26,600 average for EU-15 nations.
Real economic growth in the U.S. over the past 10 years has been more than 50 percent faster than EU-15 growth over the same period—3.2 percent average growth compared to 2.1 percent average growth. The gap has become even larger since the Lisbon Strategy was announced.
The U.S. unemployment rate is significantly lower than the EU-15 unemployment rate, and there is a stunning gap in the percentage of unemployed who have been without a job for more than 12 months—11.8 percent in the U.S. versus 41.9 percent in EU-15 nations.
Living standards in the EU are equivalent to the living standards in the very poorest American states—roughly equal to the living standards in Arkansas and Montana and only slightly ahead of the living standards in the two poorest states, West Virginia and Mississippi.
But before they get to trying to implement this tax, we're trying to stop them from raising taxes on almost everything we drink--click here to go to our page that says exactly who you and your friends need to call in the Senate to stop a dramatic increase in taxes on our drinks as part of a government take-over of health care.


