Shop until they drop

Washington Monthly, May, 2004 by Charles Peters

"If 'sexy high heeled shoes' are four of your favorite words ... If girls can never have too many handbags, dresses, t-shirts, or lacy underthings ... If you know that shopping is one of life's most fabulous pleasures, then ... " according to the envelope copy from a recent direct mail solicitation, you should subscribe to "Lucky, The Magazine About Shopping."

This reminds me that I want to embrace a proposal by the New America Foundation's Maya MacGuineas to replace the payroll tax with a tax on consumption. The worker's share of the payroll tax is an unfair burden on low-and middle-income workers. The employer's share is a disincentive to hiring new workers.

The value-added tax in Europe and state sales taxes in this country prove that consumption taxes can be accepted. And MacGuineas's proposal avoids the regressive problem of sales taxes by malting the rate increase as the amount of consumption rises, and by providing low-income exclusions. As for the effect of a consumption tax on business, it's hard to believe that it would discourage the subscribers to Lucky.