The Sliced Bagel Tax
The Heritage Foundation | September 2, 2010
As if tax law wasn’t complicated enough, New Yorkers are now required to pay an extra tax on their bagels—but only if they’re sliced on premises. The act of slicing the bagel renders the bagel “processed food” and thus subject to a special tax. While the story is the butt of many jokes, it’s an important example of how a value-added tax in the United States could make even simple transactions incredibly complicated. Writing on National Review Online, Heritage’s J.D. Foster warns lawmakers about the folly of a VAT: “The VAT would open up a whole new realm for Congress to play with other people’s money, and a whole new opportunity for lobbyists to ply Washington to manipulate those rules.”
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