The political speedball would combine the quick rush of income tax increases with the euphoria induced by a value-added tax on consumption. Tax increases typically produce a revenue spurt that quickly cools off as people find creative ways to evade them, while the VAT keeps taxing consumption at every stage from production to purchase of a product. European VATs typically create substantial revenue streams, but stifle entrepreneurial energy and job creation. That’s why all of Europe’s welfare states are slow-growth economies. As Greece’s need of a bailout to avoid bankruptcy demonstrates, political speedballs eventually produce the economic equivalent of the lethal heroin overdose that is so common among speedballing drug addicts.

via VAT is a fix for spending addicts | Washington Examiner.