Obama suggests value-added tax may be an option

[garbon]

http://news.yahoo.com/s/ap/20100421/ap_on_bi_ge/us_obama_tax

President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, "I want to get a better picture of what our options are."

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding "sense of the Senate" resolution that calls the such a tax "a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery."

For days, White House spokesmen have said the president has not proposed and is not considering a VAT.

"I think I directly answered this the other day by saying that it wasn't something that the president had under consideration," White House press secretary Robert Gibbs told reporters shortly before Obama spoke with CNBC.

After the interview, White House deputy communications director Jen Psaki said nothing has changed and the White House is "not considering" a VAT.

Many European countries impose a VAT, which taxes the value that is added at each stage of production of certain commodities. It could apply, for instance, to raw products delivered to a mill, the mill's production work and so on up the line to the retailer.

In the CNBC interview, Obama said he was waiting for recommendations from a bipartisan fiscal advisory commission on ways to tackle the deficit and other problems.

When asked if he could see a potential VAT in this nation, the president said: "I know that there's been a lot of talk around town lately about the value-added tax. That is something that has worked for some countries. It's something that would be novel for the United States."

"And before, you know, I start saying 'this makes sense or that makes sense,' I want to get a better picture of what our options are," Obama said.

He said his first priority "is to figure out how can we reduce wasteful spending so that, you know, we have a baseline of the core services that we need and the government should provide. And then we decide how do we pay for that."

Volcker has said taxes might have to be raised to slow the deficit's growth. He said a value-added tax "was not as toxic an idea" as it had been in the past.

Since then, some GOP lawmakers and conservative commentators have said the Obama administration is edging toward a VAT.

[Zanza]

[DGuller]

I don't think VAT by itself is a bad idea, as long as it's used to offset the income tax.  Taxing income is a pretty daft way of levying taxes, IMO.

[Neil]

I don't think VAT by itself is a bad idea, as long as it's used to offset the income tax.  Taxing income is a pretty daft way of levying taxes, IMO.

A Democratic congress is unlikely to pass something so regressive and targeted at minorities.

[Monoriu]

I personally strongly prefer sales tax than income tax.

[DGuller]

I don't think VAT by itself is a bad idea, as long as it's used to offset the income tax.  Taxing income is a pretty daft way of levying taxes, IMO.

A Democratic congress is unlikely to pass something so regressive and targeted at minorities.

Make income tax apply only to the very richest, like it used to, and make VAT the main tax for most.  It's really a much cleaner tax system.

[Camerus]

What's wrong with an income tax, DGul?

[Razgovory]

I dunno.  The whole idea makes me nervous.  Brilliantly the State of Missouri is considering a VAT system.  With the majority of the populace of the state living on the borders I don't see how that could possibly go wrong.

[Neil]

I don't think VAT by itself is a bad idea, as long as it's used to offset the income tax.  Taxing income is a pretty daft way of levying taxes, IMO.

A Democratic congress is unlikely to pass something so regressive and targeted at minorities.

Make income tax apply only to the very richest, like it used to, and make VAT the main tax for most.  It's really a much cleaner tax system.

It's still not going to pass a Democratic congress, not matter how 'clean' it is.

[alfred russel]

I don't think VAT by itself is a bad idea, as long as it's used to offset the income tax.  Taxing income is a pretty daft way of levying taxes, IMO.

Offset higher income taxes?

[jimmy olsen]

That'll never pass, I'm surprised he's even talking about it. Can't see the upside.

[Valmy]

We have to do something to cover the deficit and we know they are not going to cut spending no matter what party is in charge because then the voters will revolt...

One of these days we are going to have to pay for all this shit we have our federal government do.  Sorry American people.  The gravy train cannot go on forever.

[Camerus]

No shit.  But I can't see anybody having enough popular support to address seriously the deficit issue until something (a crisis? greater media awareness a la the current global warming craze?) occurs to drive home its importance in the minds of the plebs.

[citizen k]

they are not going to cut spending no matter what party is in charge because then the voters will revolt...
...  The gravy train cannot go on forever.

Then a revolt is inevitable.

[DGuller]

What's wrong with an income tax, DGul?

It discourages work and investments, and there is a whole host of double taxation issues that need to be dealt with, which bloats the tax code complexity enormously.