February 9, 2016

TAX WHAT YOU DON'T WANT, NOT WHAT YOU DO:

The VAT: Coming soon to a campaign stop near you (Alan D. Viard, February 8, 2016, AEI)

Although VATs and other consumption taxes have the same work disincentives as income taxes, they avoid the saving and investment disincentives that are built into income taxes. Replacing much of the income tax system with a VAT, as the Cruz and Paul plans would do, therefore has the potential to increase investment and long-run economic growth. 

Especially as we transfer more wealth to universal investment accounts, we'll want people to save/invest, not spend.

Posted by at February 9, 2016 12:32 PM

  

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