- America’s federal debt is over $33 trillion, with a deficit of over 7% of GDP and high interest payments.
- A solution proposed is adopting a national sales tax (similar to a value-added tax, or VAT) like other advanced economies, which could raise $3 trillion over a decade.
- Republican spending cut proposals don’t address major expenses like entitlements, defense, and veterans’ benefits.
- Democrats focusing on taxing the rich won’t generate significant revenue.
- America’s tax system is already progressive, with the top 10% contributing 74% of federal income tax revenue.
- The U.S. tax system taxes middle-income workers less than other countries.
- A VAT tax is suggested as a solution, even though it’s slightly regressive, as it’s less regressive than cutting benefits.
- The U.S. needs both spending cuts and tax increases to address the fiscal issue and ensure broad-based support for programs like Social Security and Medicare.
- Implementing a 5% VAT tax could help put the U.S. on a firmer fiscal path.
Source: washingtonpost.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
