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Daniel Indiviglio

Daniel Indiviglio - Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

Sure, A National Sales Tax

By Daniel Indiviglio
May 27 2009, 5:23 PM ET Comment

Ryan Avent disputes my argument from earlier that liberals will shudder at the thought of a national sales tax. The crux of his point is that the welfare states of Europe have shown us that they're a great way to get tax revenue, and so long as the government continues to spend money like it's going out of style, we'll have no choice. As a result, he thinks the Republicans -- not Democrats -- will call foul and end up being the opposition:



If I had to anticipate the primary opposition to a sales tax, I'd guess that it would come from the right. Adoption of the tax would be predicated on the idea that current tax structures are insufficient to support current and future levels of spending, and would be impossible in the absence of compensating social spending -- on health care, education, and so on. For a Republican to agree to such a tax would be to abandon some of his dearest principles: a commitment (at least in theory) to smalller [sic] government -- a starved beast -- and a determination to limit the growth of entitlements and the intrusion of the government into the private health care system.

I think he's right insofar as, if no other tax laws change, and Democrats propose adding a national sales tax, Republicans will certainly oppose it -- they hate pretty much all new taxes. It seems to me, however, that any move to a national sales tax would also involve a revamping of the entire tax system, at least that's what most of its proponents from the original article seem to imply. As he mentioned, corporate taxes might be lowered. Tax reform might even reduce progressive income taxes if a national sales tax were high enough.

I'm not convinced that there's a conservative out there who would not prefer a national sales tax to high corporate taxes and very progressive income taxes. The former is much better for investment and long-term growth, as the rich would have more money (and incentive) to invest, while companies would have more income for investment of their own. Now, conservatives might not want that tax to be as high as liberals, but they'd certainly prefer a tax of this style to most alternatives.

If everything else is left the same when a national sales tax is created, then yes, Republicans will balk. But things will get interesting if they start pointing out that Democrats are promoting a tax that disproportionately targets the poor.

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