US Politics Mega-thread - Page 5514

On February 21 2026 17:53 RvB wrote:

A VAT is not regressive. It's a proportional tax. Savings are future consumption. If you look at only disposable income then that's not taken into account.

On February 21 2026 05:25 Falling wrote:


I think the closest to finding the first step to fix the system is what Newsom is doing with redistricting.
You have a national problem that can only be solved at the state level across every state. You aren't going to remove state control over how elections are run (well, Trump is floating that idea but for nefarious reasons).

So you are stuck in the prisoner's dilemma where no-one wants to be the one to reform how redistricting works in their state.

The only solution to the prisoner's dilemma is to play nice first. And then if it is not reciprocated, absolutely smack them down. And then make a new offer and smack again if an open offer is taken advantage of.

Redistricting in favour of Democrats in California is a warning shot across the bow though unfortunately making the bad system worse. But a few more follow ups might be necessary to put the fear of God into Republican states. There is then a slim chance for a sit down in the equivalent of the First Minister meeting to negotiate some sort of accord/ armistice to commit to reform whereby redistricting is done through an independent body (by state- never going to get one independent body for all in the US) with an agreed upon representation formula.

It will also never happen.
It won't happen under Trump because the man has only thoughts for accruing power and none for how to reform the system to make it better in the long run- just better for him personally. So he would only be a hindrance to chairing/ mediating the Governors' meeting.

And even without Trump, I just don't see everyone putting down their swords at this point. But however slim, I think playing hardball with the threat to make redistricting worse across all Democrat run states, if Republican states don't back down is the only way forward.

I guess, either that or bite the bullet and try and change the constitution so that a federal independent agency (the equivalent of Elections Canada) operates federal elections. We might bring peace to the Middle East before then though.

But it is still Newsom redistricting to force a compromise in Congress and Senate to get an independent Elections USA.

On February 22 2026 01:08 Vindicare605 wrote:

Of course I can single out defense because Republicans would rather cut non-discretionary spending like cutting medicare and social security than they would cut a single dollar from defense.

On February 22 2026 01:08 Vindicare605 wrote:
The fact that Republicans refuse to touch the defense budget despite believing only in cutting spending, says everything about how actually serious they are in reducing the deficit. Their only option is to cut mandatory spending and that would be political suicide so they're never going to do it.

On February 22 2026 01:08 Vindicare605 wrote:
If the Republican philosophy of cutting the deficit is by cutting government spending and not raising revenue, AND they refuse to cut defense spending. Then there is only one other place for them to cut, and that's from non-discretionary spending IE: Medicare, and Social Security.

On February 22 2026 01:08 Vindicare605 wrote:
Democrat methods for solving the deficit do include raising revenue.

On February 22 2026 02:04 oBlade wrote:

You just said it's political suicide that they would never do.

"Republicans would rather [Do a thing that they're never going to do] than cut defense spending."

All that tells me is no single party is going to cut anything. Democrats have not and would not cut defense either because that would be donor and crony suicide.

You can only get there by crossing factions from both parties who will cut. Neither party will cut a single thing by themselves even though Democrats certainly have the edge on willingness to raise taxes on the revenue side. I'm not trying to be dramatic. When is the last time Congress ever net cut anything...?

There is still the other half of discretionary spending which slightly exceeds defense spending. There's say 12% defense 13% other discretionary 14% interest 61% nondiscretionary. Of those you can cut from any 3 except interest payments (which you'd have to try to affect via monetary policy).


Sure. Like raising corporate taxes. But the current Republican president has been taxing corporations through tariffs and you just said it caused problems for everyday Americans.

On February 22 2026 15:20 RvB wrote:

It's correct. If wealth would just compound into infinity we'd see Yoshiaki Tsutsumi topping the lists of richest persons in the world.

On February 22 2026 15:20 RvB wrote:

It's correct. If wealth would just compound into infinity we'd see Yoshiaki Tsutsumi topping the lists of richest persons in the world.

Note too that, unlike systems which tax labour earnings but simply exempt investment
income (or tax it at a reduced rate), VAT does not provide scope for avoiding tax by
converting labour income into capital income – the source of major practical difficulties
in direct tax systems across Europe and the world. This is because income from
whatever source is taxed equally when it is spent. Thus people who earn exceptional
returns to their savings (whether through luck, skill or devices to convert labour income
into capital income) do pay more tax on those returns. Disincentives to save are instead
avoided by declining to levy tax up-front on earnings that are saved rather than spent,
targeting those whose decision whether to save or spend is marginal (and so whose
incentives matter) rather than those whose prospect of earning exceptional returns
means that they would save in any case.12

On February 22 2026 16:34 KwarK wrote:

One group of people saves. One group of people spends. You’re arguing that a spending tax does not disproportionately hit the group of people paying the tax. It’s absurd a priori. I look forward to their next paper on whether the child tax credit disproportionately favours families with children over families without.

On February 22 2026 17:17 Acrofales wrote:

That report's summary literally starts with "measuring VAT burdens relative to expenditure – thereby removing the influence of savings – is likely to provide a more meaningful picture of the distributional impact of the VAT", in other words, changing the denominator to disregard savings to make it more "meaningful". That is quite the statement. Their justification for doing that is supposedly found in this report: https://taxation-customs.ec.europa.eu/system/files/2016-09/report_evaluation_vat.pdf

I can't find anything remotely like it in the summary, but am not going to read 600+ pages to track down where that might say something vaguely like that. I suspect, though, that this report may very well have argued that their analysis is best performed when ignoring savings, because I did find some tangentially related points about how VAT doesn't change the incentive to save, probably put clearest here:


But this has nothing to do with measuring whether a tax is progressive or regressive. They aren't really very interested in that in the first place, as far as I can see.

Anyway, if we ignore savings then VAT might not be regressive. But for someone who lives paycheck to paycheck that ignores 0% of their wealth, and for Musk that ignores 99.9999999% of their wealth (and I'm probably missing a few 9s there). Clearly "disregarding savings" is doing a lot of heavy lifting in that report.

As has been highlighted by various authors (e.g. IFS, 2011; Creedy, 1998; Metcalf, 1994), a key problem with the income-based approach is that it fails to account for savings behaviour. More specifically, it ignores the fact that income that is saved in the current year will still incur VAT when it is eventually consumed (as this VAT cannot be captured by an analysis based on data from a single year). Similarly, current expenditure, and the VAT incurred on it, may have been funded from income earned in a previous year. Because savings rates tend to increase with income, this biases income-based VAT burden results downwards at higher income levels – hence the common conclusion that the VAT is regressive.

To fully take account of the impact of savings behaviour, a lifetime (or at least multi-period) analysis would ideally be undertaken, including the calculation of both lifetime income and lifetime VAT burdens. Unfortunately, any attempt at estimating lifetime income and lifetime VAT burdens is highly complex, even in a single-country context, and simply impracticable in a 27-country study such as this.

However, in the absence of such information, measuring VAT burdens relative to current expenditure is likely to provide a more meaningful estimate of the lifetime distributional impact of the VAT than measuring VAT burdens relative to current income.
Effectively, measuring VAT burdens relative to current expenditure removes the influence of savings behaviour. It instead identifies how the presence of reduced VAT rates and exemptions move the actual VAT burden away from what would be due under a perfectly broad-based single-rate system (where all households would pay the same proportion of their expenditure in VAT). If consumption preferences and tax rates do not change over time, then such expenditure-based analysis will perfectly proxy a
lifetime analysis. However, even where these assumptions fail to hold, as it is unaffected by savings behaviour, an expenditure-based analysis will still be preferable to an income-based analysis.