As I explain in this Senate Budget Committee testimony, they are all single-rate, consumption-base, loophole-free tax systems that fulfill the key principles of good tax policy.
But good theory doesn’t operate in a vacuum, which is why I make several additional points.
1. Echoing George Will, something like a VAT should never be implemented unless the income tax is completely abolished.
2. It’s impossible to have good tax policy if government is too big.
3. A proper definition of taxable income is necessary to understand what’s a loophole and what’s not.
4. Tax revenues already are projected to significantly increase over the next few decades because of “real bracket creep,” meaning than a rising burden of spending accounts for more than 100 percent of America’s long-run fiscal challenge.
5. If you want the rich to pay more tax, keep tax rates reasonable.
On a personal note, I’m irked that my jacket is riding up on my shoulders. I’ve been trained to sit on the tail of my jacket when doing TV interviews, and I should have remembered that lesson during my testimony.
But at least I’m wearing my Bulldawg tie, so that compensates.
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