A common conservative argument is that holding down taxes will somehow starve the beast and automatically lead to lower spending. Not only is there no evidence supporting this belief, recent research argues that it is perverse. By reducing the tax-cost of spending, starve-the-beast theory has actually caused spending to rise.
Those who oppose big government would do better to concentrate their efforts on actually cutting spending. Holding down taxes or insisting that we keep a ridiculously inefficient tax system because that will give us small government is juvenile and bad for the country.
If people want small government, there are no shortcuts. Spending has to be cut. But if spending isn't cut, then I believe that we must pay our bills. I think it's better to do so as painlessly and efficiently as possible. Those who complain most about the VAT generally oppose all tax increases no matter how large the budget deficit is. They imagine that the fiscal crisis their opposition to higher taxes will help to create will lead to massive spending cuts that would be politically impossible otherwise. This cannot happen, however, because Congress is never going to enact a large deficit reduction package that has no tax increases; historically, such packages have aimed for a 50-50 split between spending cuts and revenue increases.
It is my observation that ideological dogmatism, rather than serious analysis, underlies the vast bulk of opposition to a VAT among conservatives. When, eventually, economic conditions force them to live in the real world, instead of a fantasy world where the budget can be balanced by abolishing Medicare, I think they will support a VAT just as European conservatives did. The longer they wait to do so, the greater the economic pain we will have to go through before conservatives bow to reality and support a VAT.
- David Frum on Bruce Bartlett's newest policy paper which calls for a Value Added Tax
Those who oppose big government would do better to concentrate their efforts on actually cutting spending. Holding down taxes or insisting that we keep a ridiculously inefficient tax system because that will give us small government is juvenile and bad for the country.
If people want small government, there are no shortcuts. Spending has to be cut. But if spending isn't cut, then I believe that we must pay our bills. I think it's better to do so as painlessly and efficiently as possible. Those who complain most about the VAT generally oppose all tax increases no matter how large the budget deficit is. They imagine that the fiscal crisis their opposition to higher taxes will help to create will lead to massive spending cuts that would be politically impossible otherwise. This cannot happen, however, because Congress is never going to enact a large deficit reduction package that has no tax increases; historically, such packages have aimed for a 50-50 split between spending cuts and revenue increases.
It is my observation that ideological dogmatism, rather than serious analysis, underlies the vast bulk of opposition to a VAT among conservatives. When, eventually, economic conditions force them to live in the real world, instead of a fantasy world where the budget can be balanced by abolishing Medicare, I think they will support a VAT just as European conservatives did. The longer they wait to do so, the greater the economic pain we will have to go through before conservatives bow to reality and support a VAT.
- David Frum on Bruce Bartlett's newest policy paper which calls for a Value Added Tax
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