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Adding Taxes



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An email in response to my article for the most recent NR: “Nice article on the VAT. Just wondering: If you were king and could replace the income tax with a VAT would you?” I think the case for taxing consumption instead of income is strong, but the case for doing it through a sales tax or a VAT is much weaker. Taxing consumption by taxing income minus savings and investment (including investments in children) strikes me as a better idea, mainly because I think that sort of tax would probably be harder to raise.



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