The VAT in the Hat

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The New York Times reports that House Democrats are considering a value added tax as a way of financing healthcare reform. A VAT is one of those things that economists and think tankers all love, but it’s also one of those things that’s never had any real chance of being adopted in the United States.  So it surprised me that Dems were even seriously talking about it.

But Tyler Cowen has a take on this that I hadn’t thought of:

From my distant perch out here in Fairfax (and Arlington), I believe this means health care reform is falling apart.  It means the unions won’t let them tax health insurance benefits and the CBO won’t let them punt on the issue of finance.

Hmmm. That sounds unduly pessimistic.  But given the fact that congressional approval of a VAT is vanishingly unlikely without years of preparing the ground first, the fact that it’s being discussed suggests that pretty much all the likely sources of revenue have already been ruled out.  That’s not a heartening thought.

The reference in the Times was made almost in passing, and maybe it doesn’t mean anything.  I certainly wouldn’t make too big a deal out of it at this point.  But I figure it’s worth a brief mention as a possible canary in the coal mine.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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