Bartlett, VAT, and Labor Supply
Bruce’s latest is praised by Ezra Klein, gets a mixed reaction from Kevin Drum, but is critiqued by Duncan Black.
While we should praise conservative Republicans, such as Bruce and Bill Thomas, who admit that we need to recognize the deferred tax bills that President Bush is imposing on us, one reason to oppose the use of a consumption tax comes from Bruce Bartlett as he writes:
I do not believe that we as a society can afford to have so many well-educated, experienced, highly skilled workers leave the labor force …
To be fair, Bruce’s Townhall op-ed focused on Social Security and the incentives for early retirement. Note, however, that a VAT would impose a tax on workers as they consider leisure versus goods. But I guess elderly workers would see an income effect that offsets this substitution effect. Fiscal responsibility is fine – but notice how the agenda seems to be tax the working poor and not Bill Gates.