Images of VATs

This article caught my eye today: Once Considered Unthinkable, US Sales Tax Gets Fresh Look.

Obviously, in the US, there will be a massive hue-and-cry over this. But I really don’t see why.

I’m all for consumption taxes. They’re fair. If you want to consume more, or if you can due to how much money you make or have, so be it. You can be taxed for your consumption. But you have the choice to consume less — regardless of your fiscal position. Thus, it’s fair. It does not unfairly impact anyone.

In fact, I’d like to see here in Canada income tax become something you only pay to the provinces and that the Feds collect money only from a consumption tax (a redone GST) plus corporate taxes. In my view, provinces should not be allowed to tax goods or services, only incomes. That way they’d have to be more responsible to their electorate while the feds focus on the macro economic issues at hand. It also means, by pushing corporate taxes to the federal level only that provinces must control their spending so as not to overly affect the electorate who are paying for the province’s services.

Furthermore, via a proper consumption tax equalization payments to truly “have not” provinces would be OK as it can be based on an examination of taxation levels and service levels wherein the feds ensure that a minimum service level is provided for healthcare, EI, welfare, etc.

I can hope, but I know it won’t happen. I can’t see politicians having the guts to do something as elegant as simplifying the taxation system.