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May 27, 2009

Trial Balloon: Hey, Let's Impose a National Sales Tax

it won't happen. Obama promised that no one making under $250,000 would pay an additional dime in tax (and some conservatives, striving for accuracy, say he probably meant income taxes; the quote itself, however, is more expansive and does not limit itself to income taxes).

So this is obviously untrue.

Those crazy tea-partiers who said Obama was going to raise their taxes. What lunatics.

Once Unthinkable, U.S. Sales Tax Gets Fresh Look

Levy Viewed as Way to Reduce Deficits, Fund Health Reform

By Lori Montgomery
Washington Post Staff Writer
Wednesday, May 27, 2009

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families.

Liberals dispute that notion. "You could pay for it regressively and have people at the bottom come out better off -- maybe. Or you could pay for it progressively and they'd come out a lot better off," said Bob McIntyre, director of the nonprofit Citizens for Tax Justice, which has a health financing plan that targets corporations and the rich.

A White House official said a VAT is "unlikely to be in the mix" as a means to pay for health-care reform. "While we do not want to rule any credible idea in or out as we discuss the way forward with Congress, the VAT tax, in particular, is popular with academics but highly controversial with policymakers," said Kenneth Baer, a spokesman for White House Budget Director Peter Orszag.

It's odd, isn't it, that the media refuses to note the obvious -- Obama's wild spending has jeopardized our finances -- except obliquely, as here, in an article debating how to fix the problem.

But note they do not highlight the problem itself, nor suggest possibilities that do not involve raising taxes. Such as, I don't know, simply stopping spending so damn much and putting Obama's even bigger coming spending programs on hold.

They will only admit the problem, in other words, in service of advancing their other political priorities -- raising taxes being high on the list.

Thanks to AHFF Geoff.


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posted by Ace at 11:42 AM

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