With this in mind, anti-statists on the right sometimes propose that taxes be made as transparent as possible in the hope that tax revolts will keep rates low. But even small government conservatives and libertarian advocates of a night-watchman state (“minarchists”) support basic government functions like defense, policing, and law enforcement. If they are rational, even these right-wing proponents of minimal government should want the legitimate functions of the state to be funded by taxes which do not frequently trigger anti-tax rebellions by voters.
From a Colbertian goose-plucking perspective, the ideal tax is a broad-based consumption tax like a sales tax or a value-added tax (VAT). Consumption taxes are inescapable, unless you take up permanent diplomatic asylum in an airport duty free zone. In addition, consumption taxes are effectively invisible; even if sales taxes or VATs are listed on a receipt, few buyers pay any attention. Finally, consumption taxes are recurrent, so taxpayers do not experience the kind of “sticker shock” every year on Tax Day that inspires them to march to the legislature with pitchforks and torches.
This explains why over 160 out of the world’s 195 countries, and every First World industrial nation other than the United States, rely on a VAT (a kind of cumulative sales tax charged at each stage of production) for a large portion of their tax revenue. In 2019, consumption taxes—chiefly in the form of VAT—were the most important source of revenue for advanced OECD countries (32.3 %), followed by social insurance taxes like payroll taxes for retirement programs and health care (25.7%) and individual taxes (24%).
Writer - Critic - Poet - Editor