We non-Pollyana libertarians oppose calls for tax “reform” — as Rockwell writes, “The only tax plan anyone should trust is the most simple possible: the one that proposes to lower existing taxes.” He goes on:
But there is another danger to promoting a VAT or a NST. It might actually convince someone in Washington to give it a try. And instead of replacing the whole tax code, the politicians might try to introduce the new one at the seemingly low rate of 1 percent or 3 percent. If they ever get away with this, look out. It will inch up year by year as the political class discovers yet another way to loot us.
This points to a general danger of the idea of a replacement tax. I hear of these plans all the time. People say, let’s get rid of the tax I don’t like and replace it with one I do not pay. So people will propose getting rid of the capital gains tax and instead increase taxes on inheritance. Or they say, let’s get rid of inheritance taxes and put a higher tax on Americans working abroad. You can think of many of your own variations on this. The danger here is not in advocating the repeal of one tax. That is something we should all favor. The danger comes from advocating a new tax to take its place. If you know the way politics works, you know that the new tax will be enacted and the old one not repealed.
And here is perfect proof of this: Podesta Says Value-Added Tax ‘More Plausible’ as Deficits Grow. This is of course just yet another tax on top of others. Libertarians: stay strong. Never advocate tax “simplification”. Never advocate “replacing” any tax with another. (No offense, my naive, 23-year old self.)
[LRC cross-post]
