America will never have a European-style welfare state without a VAT
Democrats want European-style spending but without the efficient tax that makes it possible
AS GOVERNMENTS SPEND more, it becomes increasingly important that they design their taxes carefully. Large European welfare states such as Sweden or Germany rely on growth-friendly value-added taxes (VATs) to help raise the vast quantities of cash they dole out. America can get away with a tax system that is grossly inefficient and needlessly complex only because the amount of revenue it raises overall is relatively small.
This article appeared in the Leaders section of the print edition under the headline “Ways and means”
Leaders October 2nd 2021
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- China’s new reality is rife with danger
- Japan deserves better than an inoffensive prime minister
- Why the word “woman” is tying people in knots
- America will never have a European-style welfare state without a VAT
- New ways to make food are coming—but will consumers bite?
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