Heidi Jones's List: tax

• in a VAT is cropping up all along the ideological spectrum (albeit more often along the leftish end).
• About 150 countries have a VAT. It comes in different shapes and sizes, ranging from 5 percent in Japan to 25 percent in Sweden. It's easy to see why it's popular: As a broad-based tax that's easy to collect and hard to see, a VAT can rake in a lot of money.
• That's one reason the VAT is considered highly efficient -- it's hard to dodge since each link in the VAT chain keeps an eye on the rest.
• The VAT's efficiency in raising money is also why some oppose it. Even if a VAT started at a low level, say 5 percent, it's easy to increase the rate, as Europe has proved time and again. And its very simplicity and lack of visibility -- no tax returns, no obvious hurt at the cash register -- raises suspicions that a VAT is a stalking horse for higher spending.
• regressive
• VAT is starting to get attention for the simple reason that it may be the best among several bad options
• 40-year average of 18 to 20 percent of GDP (in 2009, it dipped to about 15 percent)
• (Interestingly, though, many GOP economists favored a VAT in the 1980s, and it was Margaret Thatcher who introduced one to the U.K.

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• A VAT would likely contain some exemptions--for food, clothing, medicine and housing costs--but it would impose taxes on most other daily purchases, gasoline, televisions, automobiles, computers, airfares, cell phones, refrigerators, newspapers and restaurant foods, for example.
• EU average tax burden was 40% compared with 28% in America
• as the VAT replaced some of the income tax in Europe?
• 85-13 to approve a nonbinding resolution stating that the VAT "is a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery

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• . Western European nations first began imposing VATs about 40 years ago, and the result has been bigger government, permanent deficits and more debt. According to the Economist Intelligence Unit, public debt is equal to 74 percent of GDP in Western Europe, compared to 64 percent of GDP in the United States (and the gap was much bigger before the Bush-Obama spending spree doubled America’s debt burden).

• VAT or a carbon tax
• And it’s also no secret that economists love the idea of a VAT. It promotes savings over consumption, and its hidden nature may mean it has less behavioral impact on taxpayers.