Via Ezra Klein, a pretty good interview with Bruce Bartlett who has the too-rare distinction of being an intellectually honest and perfectly reasonable conservative. Here he is on the benefits of a VAT (value added tax):I think the administration made a mistake approaching the funding of health-care reform how it did and I think Republicans made a mistake refusing to seriously debate the issue or its funding.
The value-added tax would be a very appropriate tax to use for this purpose. One reason is I am disturbed that we have a large percentage of the population that pay no income taxes. And I know many of those people pay payroll taxes. But income taxes fund the general government. According to a study by the Tax Policy Center, 47 percent pay no income tax, or have negative liability. And I think it's bad for democracy when people get into the position when a majority can vote benefits for themselves but not pay for it. And that should disturb liberals as much as conservatives.
The VAT would necessarily be a broad-based tax. It would be a way of getting people to pay for the benefits they themselves receive. People like Len Burman and Rahm Emmanuel's brother [Ezekiel Emmanuel, a health care adviser to Peter Orszag] have supported this for some time. Len argues that if people knew the VAT was dedicated to health-care reform, and the rate rose and fell automatically with the spending of the system, they would have an incentive to hold down taxes. They would have some positive reinforcement we do not now have with Medicare. I hope that's right. You know, every other major developed country has a VAT: The parties of the left in Europe made a deal a long time ago: If conservatives will let us have a welfare state, we'll fund it conservatively. And I think that's still a good deal.
He also makes a good point about how a VAT would give the government an additional tool to stimulate spending in a recession:
And thinking about this from another perspective, suppose we had a VAT right now and we wanted to stimulated consumption. Reducing the VAT rate temporarily would be a wonderful way to stimulate consumption. Suppose you had a 10 percent VAT and we said we weren't going to collect it for the next 10 months. People would buy like crazy. They'd buy toilet paper, they'd buy anything they could get their hands on that they knew they'd need in the future. We're depriving ourselves of a great stimulant tool by ignoring this.
I think I agree with a lot of this. Even if a VAT is regressive, realistically it's the only way you're going to get conservatives on board with funding a welfare state--and it's nice that it has other benefits too, like its ability to work as a stimulus tool, and the fact that it would properly align incentives with regard to keeping the costs of healthcare in check.
Moreover, just generally speaking, I think lots of people agree that at some point we're going to have to shift to a less demand-oriented economy (currently consumer spending accounts for 70% of GDP), so it makes sense to shift the tax burden away from income and more towards consumption.
On a separate point, I think this interview really brings into stark relief how damaging it is for the country that there is no intellectually honest opposition party that offers serious policy alternatives. I understand that conservatives don't want an expanded welfare state and that they view the obstruction of its expansion as a worthy cause, but at some point this behavior takes its toll on the ability of the government to operate: if you relentlessly increase spending while refusing to raise revenue in the long term, the federal government will eventually just stop working (see: California). That's an outcome nobody should want, regardless of ideology.
You know, these free market principles make a lot more sense if you assume everyone has the same amount of money, and hence the dollars they allocate to something represent exactly their 'desire' for that object. So the person who wants it the most gets it, with the least fuss.
Fine, you can say that the people with more money have more entitlement to stuff, that is the idea of capitalism anyway. But when it comes to basic needs, yes, like parking, it's meant to be something everyone can get. So free market can totally screw it. The richest people get it, even if they don't want it that much (a bit of a stretch), and maybe even abuse it.
It's more of an obvious problem with, for example, gas. If there's a limited amount of it, and prices soar, then rich folks can use it to excess, and poor people can get seriously screwed. So price caps as a form of socialism seem necessary, even though it makes the distribution much less efficient.
I don't think what you're saying makes a whole lot of sense. You seem to have slipped into the mindset that goods and services are just magically already there in set amounts, and that what happens on the consuming end has no effect on what happens on the producing end.
But consumption drives production. If gas becomes very scarce, it is in everyone's interest for prices to reflect this (for them to "soar"), not because the rich are "entitled" to anything, but because high profit margins in the gas business will encourage people, in the aggregate, to divert more resources into producing more gas, and so there will be more gas for everyone, and prices will go back down--for everyone. Or, alternatively, if the gas supply cannot be increased any further (if we have reached "peak gas"), then the high cost of driving a gas-powered automobile will start to make non-gas-reliant modes of transportation more competitive, and people will find it profitable to start diverting resources into developing those new industries and technologies.
So I think in this case you are guilty of "shooting the messenger"--you're blaming the price for the problem, when really the price is just indicating the real problem, which is that the tradeoffs of producing this good--gas--are becoming too costly in comparison to other things we could be spending our time and energy on. By introducing price controls you're just "living in denial"--delaying progress by keeping everyone in the same spending pattern on the same products, even as the quality and access to those products steadily declines.
Of course, this free market pricing mechanism can't be applied to everything--sometimes there are extenuating circumstances. For example, with healthcare, we might decide that it's morally unacceptable to deny a poor person medical coverage in an emergency, and then find ourselves on a slippery slope, so that by the time we're giving away ER care for free, it actually is more efficient to give that person access to less costly preventive care that would prevent the costly trip to the ER in the first place. And so--boom--you're on your way to some form of socialized medicine. That's just fine.
But there are no such slippery-slope-inducing moral imperatives regarding parking spaces! Only a child of Los Angeles could believe something so patently absurd as the idea that "free parking" is a "basic need". It reminds me of the Woody Allen quote about LA: "I don't want to move to a city where the only cultural advantage is being able to make a right turn on a red light".