I've seen that assertion posted here before without any supporting argument
Actually, Krugman also likes the idea, and he had a blog, complete with supporting paper, which we discussed here before and which you said you knew about:
Message 27024374
Message 27024424
Here is what Krugman said in his blog, to remind you:
"More generally, it does seem that countries with strong welfare states have less progressive tax systems than those with weak safety nets; see this, from the Luxembourg Income Study (pdf).
And there’s a substantial literature suggesting that this is no accident: that in the United States, because we don’t have a national sales tax, politics ends up being about tax brackets, which in the end can’t do much to reduce inequality, while in Europe you have broad-based taxes, and politics ends up being about who gets helped, which matters much more, especially for the less fortunate. There’s even argument that American exceptionalism, our uniquely weak welfare state, reflects not so much culture and racial division as the happenstance that we don’t have national consumption taxes.
All of which says that if I can trade a somewhat regressive VAT for guarantees of decent retirement and universal health care, I’ll take it." |
