The Left’s Plan to Impose a Value-Added Tax and Why It Won’t Work for America
Liberals are finally facing up to the fact that their big-spending ways are leading to growing deficits. But they still insist that the right solution is to raise taxes to cover their profligate spending rather than living within our means.One proposal is to implement a European-style value-added tax on consumption on top of the income tax. This new tax, Heritage’s J.D. Foster explains, would “hammer private savings for an extended period as individuals and families slash their saving rates to sustain current consumption in light of the VAT’s higher prices.”
A new analysis from Heritage tax expert Curtis Dubay explains how the VAT really works and why it is wrong for America. He also debunks several myths about the VAT: that it would increase savings rates and investment; that it would boost economic growth; that it would promote exports; and that it would allow lower income taxes.