In his March 1 letter Mr. Johannes van Hijum claims that the Netherlands provides better services for lower taxes than the United States by comparing property taxes and utility fees.
He conveniently omits the fact that the Netherlands has a value added tax. The VAT is essentially a national sales tax on all goods and services. The current rate for the VAT in the Netherlands and all other EU countries is 21 percent for most items. The rate for some essential items such as food is “only” 6 percent. The VAT is the main source of funding for the generous social programs of the EU nations. So overall taxation in the EU nations is significantly higher than in the United States. Also the VAT is a regressive tax, so that lower-income people pay a higher tax rate on their income than higher-income people. On the other hand, all citizens have better government-provided social benefits in exchange for these higher taxes. As Milton Friedman once said “There is no free lunch.”
Jerry Fraser
Lynnwood
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