There is an “emerging consensus” that we are headed for a Value-Added Tax (VAT) in the United States. But the more optimistic among the experts and pundits believe it won’t come until after the 2012 election and then only if President Obama is reelected. There is no doubt that something will have to be done about the financial crisis and the federal debt — even if ObamaCare is repealed — and many believe the “hidden” VAT is the politically viable solution. Many openly say that the VAT, with its costs hidden in the price of commercial products, is the only way to get the money to pay for ObamaCare.
Paul Volcker, former Federal Reserve Board Chairman and now chairman of President Obama’s Economic Recovery Advisory Board, predicted that a VAT would be the solution to the financial crisis and insisted that the VAT is “not a toxic idea.” Other Democrat leaders have weighed in advocating the VAT, including House Speaker Nancy Pelosi (D-California), Sen. Kent Conrad (D-North Dakota), White House advisor Ezekiel Emanuel, and John Podesta, head of the Center for American Progress.
The Senate recently opposed the creation of a VAT by an overwhelming vote (85-13). The non-binding resolution stated that the VAT “is a massive tax increase that will cripple families on fixed income and only further push back America’s economic recovery.” Of course, President Obama promised there would be absolutely no tax increases for families making less than $250,000 per year. But, Americans for Tax Reform reports that President Obama recently changed his rhetoric — just slightly — to say that he won’t be raising “income” taxes on families.
President Obama has also gone on record telling his debt commission, The National Commission on Fiscal Responsibility and Reform (NCFRR), that “everything is on the table” when it comes to ways of reducing the nation’s $1-trillion-plus federal deficit. The NCFRR is an 18-member commission co-chaired by former Clinton White House Chief of Staff Erskine Bowles and former Republican Sen. Alan Simpson of Wyoming. The NCFRR will be presenting their recommendations to the president by December 1, 2010 — conveniently after the November elections. The commission was told to recommend ways to reduce the federal budget deficit from 10 percent to three percent of the GDP by 2015 and to submit solutions for cost containment of Social Security and Medicare.