From: kbanaian@bernard.pitzer.claremont.edu (King Banaian)
Subject: Re: National Sales Tax, The Movie
Lines: 43
Organization: Pitzer College

In article <VEAL.731.734985604@utkvm1.utk.edu> VEAL@utkvm1.utk.edu (David Veal) writes:
>In article <1993Apr16.164750.21913@alchemy.chem.utoronto.ca> golchowy@
alchemy.chem.utoronto.ca (Gerald Olchowy) writes:>
>>In article <9304151442.AA05233@inet-gw-2.pa.dec.com> blh@uiboise.idbsu.edu (Broward L. Horne) writes:
>>
>>Why don't the Republicans get their act together, and say they
>>will support a broad-based VAT that would have to be visible
>>(the VAT in Canada is visible unlike the invisible VATS they
>>have in Europe)
>>and suggest a rate sufficient to halve income and corporate
>>and capital gains tax rates and at a rate sufficient to give
>>the Clintons enough revenue for their health care reform, 
>
>       The Republicans are, in general, fighting any tax increase.
>There is also worry that a VAT would be far too easy to increase
>incrementally.
>
I was a graduate student in the early 1980s, and we had a conference on 
Reaganomics where Jerry Jordan, then a member of the Council of Economic 
Advisors, was a speaker.  I had the pleasure of driving him back to the 
airport afterwards, and since taxes were the main topic of discussion I 
thought I would ask him about the VAT.  I have favored it for these reasons 
you mention, that the income base is too hazy to define, that it taxes 
savings and investment, that it is likely to be more visible.  He agreed, 
and reported that the CEA at that time was in favor of VAT.  So why not 
propose it?  I asked.  He replied that the Reagan White House feared that 
the Democrats would introduce VAT *in addition to* the income tax, rather 
than in lieu.  Better not to give them any ideas, he said.

Pretty prescient.

>       (BTW, what is different between Canada's tax and most of
>Europe's that makes it "visible?")
>
Yes, any Canadian readers, please tell us if the tax is displayed on price 
stickers (I'm relatively certain it is not in Europe).

--King "Sparky" Banaian                 |"It's almost as though young
kbanaian@pitzer.claremont.edu           |white guys get up in the
Dept. of Economics, Pitzer College      |morning and have a big smile
Latest 1993 GDP forecast:  2.4%         |on their face ... because,
                                        |you know, Homer wrote the
                                        |_Iliad_."  -- D'Souza
