[adventured]

VAT taxes are extraordinarily regressive. Next to lowering taxes on the rich, it's among the worst possible options.

Increasing the income tax and taxing capital gains at regular income rates, along with bolstering estate taxes on the rich, are the ideal near-term solutions to the US budget problem. The US still has a lot of slack taxing capacity on the wealthy. That should be maxed out long before we look at a VAT.

[amanaplanacanal]

Regressive taxes can be fine, as long as you balance them with transfer payments so that the poor don't end up paying more.

They might even make the economy more efficient. I'll leave that argument to the economists, though.

[magduf]

I think you also need to have tax breaks on certain things, for instance groceries and non-luxury clothing. Many high-tax, high-CoL states here in the US are like this, so that poorer people don't pay so much for essentials.

[hanniabu]

Can you expand on why you think it's regressive?

> That should be maxed out long before we look at a VAT.

This is relative. The US government sucks at being efficient.

[scooble]

Not the person you asked, but as I understand it, poor people spend a higher percentage of their income on goods and services (because they have less left over after paying for basic necessities). So a higher percentage of their income is lost on VAT than a richer person. This makes it a much less progressive taxation method than e.g. Income tax.

[Apocryphon]

What if they're only imposed on corporations?