As an update to my blog post the other day on the VAT,
I thought I'd share with you this great article posted by the Wall Street Journal in which they state:
"The nonpartisan Tax Foundation recently calculated that to balance the U.S. federal budget with a VAT would require a rate of at least 18%."
It is interesting if we look at the chart provided, as Europe's VAT and income tax rates are compared to the USA. In these socialized nations with "free" health care, as well as higher unemployment and stunted economic growth, it is amazing that the left still hails that the VAT "works" in Europe.
Being that the proposed VAT will be in addition to income taxes in the USA, if implemented, the USA will top the world with the highest income tax rates, far surpassing Europe.
When the Bush tax rates expire, the top federal income tax rate will be 39.6%. This doesn't include the social security and medicare tax at 7.65%, nor does it include state and local city income taxes.
So if we add the 39.6%, 7.65% and the 18% required for the VAT, this will put the US tax rate at 65.25%! If the state and city income taxes are added to that, Americans will barely have enough left of their paycheck to eat. Oh, but don't worry, we will have "free" health care.
There is no gold at the end of the rainbow, and instead the VAT will just be bottomless pit. Clearly, all VAT glitters is not gold.