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No individual or organization that claims to believe in the Constitution, fiscal conservatism, free markets, or limited government should be taken seriously when calling for tax increases instead of drastic spending cuts. Only real cuts will solve the problem: not bogus plans to balance the budget in 10 years or limiting spending increases to some measure.

by Laurence M. Vance

It’s Not Just Liberals Who Are Clamoring for Tax Increases

President Biden’s proposed fiscal year 2024 budget called for an increase in the top marginal tax rate from 37 to 39.6 percent and a 25 percent minimum tax on Americans with wealth exceeding $100 million.No individual or organization that claims to believe in the Constitution, fiscal conservatism, free markets, or limited government should be taken seriously when calling for tax increases instead of drastic spending cuts.
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But it’s not just liberals who are clamoring for tax increases.

The American Enterprise Institute (AEI) is a right-leaning think tank in Washington, D.C., “dedicated to tackling our nation’s greatest challenges by producing work that promotes our institute’s core values: free people, free markets, and limited government.”

Too bad that the AEI thinks that increasing taxes on Americans is in line with its core values.

Exhibit A

Alan D. Viard is a senior fellow emeritus at AEI, “where he studies federal tax and budget policy.” In his recent testimony before the House Committee on Ways and Means Subcommittee on Tax Policy, Viard advocated that the United States institute a European-style value-added tax (VAT) because “the United States faces a large long-term fiscal imbalance that will burden future generations and that threatens long-term economic growth.” Said Viard:

The United States should follow the lead of 170 other countries and territories by adding a VAT to the federal tax system. The VAT is economically similar, but administratively preferable, to a retail sales tax. The VAT is far less regressive than entitlement benefit cuts, although it cannot match the progressivity of high-income tax increases. The VAT also avoids most of the economic distortions induced by high-income tax increases, although it is not as economically efficient as entitlement benefit cuts. Because it occupies a middle ground between those two alternatives, it offers a plausible basis for bipartisan compromise, particularly once the limitations of the alternative options are understood.

I have critiqued Viard and the VAT here.

Exhibit B

See the rest here

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