If you must raise taxes, raise VAT
Taxing consumption is economically efficient and politically possible
The rich world’s states are getting bigger and less effective—and the forces that are the cause cannot easily be turned back. As governments look after ageing populations and fight wage inequality, they are doling out more in pensions and benefits. From 1980-2022, social spending in rich countries with available data rose from 14% to 21% of GDP.
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This article appeared in the Leaders section of the print edition under the headline “The case for VAT”
Leaders September 28th 2024
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- If you must raise taxes, raise VAT
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From the September 28th 2024 edition
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