More VAT Rumblings - The American Spectator | USA News and Politics
More VAT Rumblings

Mary Katherine Ham has the comments from Congressional Budget Office director Doug Elmendorf, who told reporters today that the his office has been receiving questions from members of Congress about imposing a value added tax, which is typical of European nations.

The idea had been floated by White House adviser Paul Volker as a way to get out of our nation’s fiscal mess. Of course, if history is any guide, the existence of new taxes just promps Congress to spend more, and in the case of a VAT tax, which has such a broad base, the temptation would be great to constantly raise it to generate revenue.

If they were to back such a tax, Democrats would be moving away from their traditional support for tax progressivity, as a VAT tax is a regressive measure that disproportionately affects lower income individuals who consume a higher percentage of their income and have less left over for savings.

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