…Until the politicians figure out a way of imposing a national sales tax. More specifically, the crowd in Washington is salivating at the idea of adding a value-added tax (a European-style national sales tax) on top of the income tax. A VAT will allow them to finance a big expansion in the burden of government, which is exactly what happened in Europe after the tax was levied (notwithstanding promises that the revenue would be used to lower and/or eliminate other taxes). Here’s a worrisome Bloomberg report featuring comments by one of President Obama’s main political allies:
“There’s going to have to be revenue in this budget,” said Podesta, Clinton’s former chief of staff and co-chairman of President Barack Obama’s transition team, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing today. A so-called consumption tax would “create a balance” with European and Japanese economies and “could potentially have a substantial effect on competitiveness,” said Podesta. Value-added taxes in Europe and Japan encourage savings by taxing consumption. Podesta said such a tax may be regressive, but can be balanced by exempting some products and using “the money to support low-wage workers.”
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