Actually a broad based consumption tax with few or no exceptions is the least distortionary. I don't have to decide between a frozen pizza (tax free) or a cooked pizza (taxed), or that frozen whole chicken or the cooked one. .
Well.. you seem extremely focused on this the VAT and exceptions.. Which I am not arguing. However.. I will point out. In your example.. it is distortionary.
So you do have to decide. Lets say the frozen pizza is 5 dollars... apply a 22% dollar tax to that. ITs now 6.10
The cooked pizza (because of the extra folks fixing it) was 16 dollars. Apply a 22% tax and its now 19.52.
Now.. initially the difference was 11 dollars. And based on convenience, taste, etc.. that price break might have pushed toward the cooked pizza.
But now after a VAT ttax.. the difference is now 13.42. And NOW..that difference might switch the push toward the frozen pizza.
Its one of the issues with a sales tax. Higher priced items.. (which are often American made).. will have a greater increase in price than lower priced products. This gives a competitive advantage to the lower priced products as they are less effected by the VAT.
And the fact is almost every industrialized country has a VAT, all of them in Europe do, and it's because it's a good way to raise money because of the broad base and few exceptions
But.. I point out.. its NOT a "good way to raise money". ITs extremely inefficient if you are going to try and counteract the regressive nature of the VAT.
hat's just wrong. Mothers don't need healthcare? .
Nope.. sorry but I am right. Yes.. THAT mother needed it. How about the thousands of young men.. who DON"T NEED IT.. because they aren't sick. ITs why the value of healthcare is really hard to quantify. YEs.. there is some value in having preventative medicine.. etc.. but in all likelihood.. a young person.. doesn't get the value out of a healthcare policy.. like a 80 year old man.. its just the economics.
That doesn't mean insurance/coverage is worthless even if not used.
Its not terrible logic.. its simple economic fact. According to your premise.. since there is TANF in this country.. we should calculate TANF as part of my income. because even though I don't get it.. and in all likelihood.. won't EVER get it.. I could still in the remotest possibility still get it.. so its value to me.. should be dollar for dollar.
See.. the reality is that things don't work like that. Yes.. safety nets have a value. But that value is proportional to the likelihood that you will need that safety net. For the vast majority of people.. the economics of the safety net don't really work out. ITs why safety nets can exist.. if everyone used it all the time.. well it couldn't get paid for.
Most of the time, we are not dealing with real economic value (dollars).. but PERCIEVED value. So.. a person in Europe may be perfectly content to not have four wheelers, because he would rather have what he considers free healthcare. A person in America. may value that time spent going fourwheeling with his children, with the risk that they may have to pay out 6000 dollars at some date IF he gets sick.
So are you arguing for freeloading, then, and everyone not getting costly insurance and spending it on a new business, and if momma has that premature baby, we pay off the downside? Or do we just let that baby and mom die as the downside of that bet? Same with cancer, or a bad car wreck -
Pooh.. because its NOT 'one or the other". We don't have a vat now do we? And yet.. golly be.. if that mother is poor.. she has Medicaid. And if she doesn't have insurance and goes to the hospital.. she and the baby have their lives saved.
Think about what YOUR policy is.. you would TAX that mother 22% on everything she needs to have a healthy child.. 22% on food.. 22% on prenatal vitamins.. 22% on safe housing.. etc.. which what? Makes it MORE likely she is going to have more stress, eat worse, have to work harder, have less safe environment etc.. and more likely to have a problem with birth...
And in exchange for what? the coverage SHE ALREADY HAS? The coverage that she already has with our income tax system?
Now.. you please explain the logic behind that. I'd love to hear it.
.... You know this. EVERY industrialized country has UHC and almost all of them have a VAT.
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Whiskibibble.. we are roughly 10-13 percent away from having UHC. and we certainly don't need a VAT for that. Because ultimately.. the Vat really makes no fiscal sense.
AS I have logically pointed out. The VAT is more of a political vehicle.. than a logical, economic one.
Here is some food for thought: