An efficient tax code can also raise a lot more revenue. Dan opposes the VAT (and similar consumption taxes) on that grounds. Yes it looks good to start, but politicians will soon raise the rate to the sky and spend the results...
It's a strking dilemma: should we keep an atrocious tax system to limit the size of government? Is there no way to get an efficient tax system and a limited government?
Catches the eye, no?
No. My eye is on the prior paragraphs, the opening of Cochrane's post:
Dan Mitchell wrote an interesting op-ed in the Wall Street Journal ... highlighting a great libertarian dilemma: is a consumption tax (VAT or similar) a good thing?
Every bit of economic analysis says yes. Economists hate distortions, taxes that lead to bad economic behavior. Our tax system is full of them. Broaden the base, lower the rate, tax consumption not savings, dramatically simplify the code, and you can get the same revenue with much less economic damage.
Dan and Cochrane both, apparently, think it would be good to "Broaden the base, lower the rate, tax consumption not savings, dramatically simplify the [tax] code".
Tax consumption, not savings?