[rayiner]

VAT is somewhat different in mechanics from sales tax, because it is collected along different points in the value chain. More important, VAT in Europe typically ranges from 20-25%, and has a broader tax base. In a typical European country, consumption taxes make up almost 30% of revenue, versus 17% in the US.

[erfderd]

So you're arguing for an increase of our sales tax. That's different than saying we don't pay sales tax!

Now, I don't disagree that a mechanism that tames American consumption would be good, and is also counter cycle to the economy.

But the question remains unanswered: How about the effect of sales tax on people and families at the margins [0]? 20-25% sales tax is a lot for them. A sales tax rebate check at the end of the year like Canada does? $70 hardly covers the bite of the sales tax!

[0] Including my in-laws, so I'll admit this is a bit personal.

[rayiner]

A VAT is different than a sales tax. And families at the margins would be better off with the increased social services we could provide with a European-style VAT, than the pennies we could collect by fighting to tax corporations more than they do in Europe.

It’s a middle class cop-out. The American middle class says they want to help those at the margins, but they don’t want to pay 25% VAT on MacBook Pros. They’re only in favor of increased welfare if Jeff Bezos is the one who pays for it.

[sgc]

There are more solutions than a high VAT, and since it is a regressive tax, it is actually a bad solution. The fact that some countries with high VAT use the funds better than other countries use their tax income does not make it a good tax. Of course corporate income tax can never solve all tax shortfalls, but it is still a reasonable piece of the puzzle.

[refurb]

Indeed. The US could very well fund a generous welfare state like Europe, but that won’t be done by increasing taxes on the rich, but rather on the middle class (like in Europe).