The VAT's Public Perception

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As Derek noted earlier, there's been a lot of talk lately in the wonkosphere about the possibility of a value-added tax (VAT). Liberals love the idea, because it would produce a lot more tax revenue. Conservatives like the idea, because they think it's fairer than a more progressive income tax. But not everybody likes the idea. In fact, everybody overwhelmingly hates it.

I stumbled over a poll that Rasmussen conducted last week that sought to determine American support of a national sales tax, after Rep. Nancy Pelosi (D-CA) voiced her support. Although a VAT isn't precisely the same as a national sales tax, the general idea is similar enough to make the poll's results interesting. Here's how it broke down:

Rasmussen National Sales Tax3.PNG

Interestingly, the poll separately found that 60% of Americans believed that tax increases hurt the economy. So since 7% more than that opposes the VAT, Americans likely believe a VAT would hurt the economy even more than other kinds of taxes.

I suspect the numbers would get better if those polled were given an option where a VAT would replace other existing taxes. I'll test that theory below (so please vote!). For example, I'm sure those with high incomes would prefer a VAT to a progressive income tax. Smokers might prefer a VAT to a tobacco tax. Truckers might like it more than a tax on gasoline.

It helped if Americans thought the money would be used for health care or deficit reduction:

Thirty-eight percent (38%) support a national sales tax to help pay for health care for all Americans. But most voters (55%) are still opposed. In May, 40% favored and 49% opposed a national sales tax if the revenue was used to help provide universal health care.


If the money raised from the tax is used to reduce the federal deficit, 39% are in favor, with 48% opposed. Thirteen percent (13%) are not sure.

Those numbers are better, but still pretty bad. And of course, public opinion is all that really matters in politics. If a majority of voters aren't on board with an idea, then a majority of politicians probably won't be either. So unless public perception of a national sales tax changes substantially, then I doubt we'll see a VAT in the U.S.

But in the meantime, let us know what you think by voting below on whether you'd support a VAT or National Sales Tax if it replaced some existing taxes:

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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.
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