The VAT is an economy killer

The spending side? In 1965, pre-VAT, government spending in EU-15 nations averaged 30.1 percent of GDP, against 28.3 percent in the United States. By 2007, government spending consumed 47.1 percent of GDP in EU-15, significantly higher than the US burden of 35.3 percent.

Nor has the VAT stopped Europe from raising other taxes.

Taxes on income and profits consumed 8.8 percent of GDP in Europe in 1965 — below the US level of 11.9 percent. By 2006, the European burden had climbed to 13.8 percent of GDP, slightly higher than the 13.5 percent US figure. (The same trend holds for corporate-tax data.)

Today’s income-tax system is a nightmarish combination of class warfare and corrupt loopholes. But adding a VAT solves none of those problems, it merely gives politicians more money to spend and a chance to auction off a new set of tax breaks to interest groups. That’s good for Washington, but bad for America.