Thursday, May 28, 2009

Tax and tax, spend and spend, tax and (oh-oh...)

Lori Montgomery at the Washington Post reports that Congress is taking a fresh look at a European-style value-added tax (VAT) to reduce the deficit and fund President Obama's health care program. A VAT imposes a percentage tax on the value added at each stage of production and sale.

Ben Sariwatta, at the Ohio Freedom Alliance forum, observed that in India, they have a practice called "black money," which refers to cash transactions made between individuals to evade taxes.

The higher the taxes, the greater the incentive to evade them. At some point, the level of tax evasion will become so great that Infernal Revenue will be unable to effectively enforce tax collections, which will only encourage contempt for tax law.

The Feds may want the VAT, the State will have to increase the income or sales tax, and Columbus and other municipalities want to increase the income tax. We are rapidly approaching the point where people cannot be (or at least cannot stand to be) taxed any more.

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