Five easy reasons to oppose ObamaTolls

[pampango]

23. The VAT like our FICA is regressive but their income taxes are high and progressive.

Their VAT is flat (therefore regressive) but it does not have an upper limit cap like our FICA has, so at least the rich in Europe don't "max out" on the VAT like high income earners do with our FICA.

And despite the regressive nature of their VAT it is popular because it is used to fund their safety net. And it is more palatable because the rich pay more in income taxes. (If their income taxes were as regressive as ours, who knows how popular the VAT would be.) A flat VAT coupled with progressive income taxes that fund an effective safety net and health care system seems to be a combination that European workers are willing to accept and support.

The fact that income equality in Europe is the highest in the world is largely due to the high and progressive taxes they pay and the safety net that those taxes support. You don't get world-class income equality with regressive taxes. (If you did, the US would have the most equitable income distribution in the world. )

If I were creating a tax system to support a progressive society I would not turn to a VAT. But the Europeans have and do have a very equitable society compared to any other real-world examples. IMHO, they could improve their tax system without the VAT but their overall tax system is certainly better than ours and they seem to support it and benefit from it far more than Americans do from theirs.