TaxNews.Com reports that a coalition of the Center for Freedom and Prosperity (CF&P) Foundation and twenty-one taxpayer groups has sent a letter of warning to President Obama, Treasury Secretary Timothy Geithner and top Congressional leaders about the fiscal and economic risks of a value-added tax (VAT):
The Coalition for Tax Competition letter is in response to a growing push for the implementation of a VAT in the U.S. in order to raise more tax revenue.
The coalition argues that there has been a “failed history” of VATs being applied in Europe and suggests that such taxes have traditionally been associated with large increases in the overall tax burden and level of government spending.
The letter concludes that “the United States should not repeat the mistakes of Europe … bigger government and higher taxes would mean sluggish economic performance and lower living standards.”
Here is what leading members of the coalition had to say about the VAT.
Andrew F. Quinlan, President of the CF&P Foundation:
VAT’s have historically resulted in massive increases in the overall fiscal burden. The massive expansion of government in Europe over the last thirty years was made possible in large part by the VAT.
Dan Mitchell of the Cato Institute:
The interest groups and politicians pushing for the value-added tax want a new tax to finance more government spending.
Grover Norquist, President of Americans for Tax Reform:
Unless we want to end up with the economic stagnation of Western Europe, we have to avoid a VAT at all costs.
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