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Beware The Value-Added Tax

by @ 8:10 am on September 28, 2009. Filed under Economics, Politics

Some on the left are already starting to talk about bringing to America one of the worst aspects of European tax policy:

Sept. 25 (Bloomberg) — John Podesta compared the nation’s current budget crisis to the situation former President Bill Clinton faced in 1993 and said some form of a value-added tax is “more plausible today than it ever has been.”

“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.”

Except, of course, that we’re not talking about getting rid of the income tax and imposing a pure consumption tax, which is something that might be worth considering. Instead, this would be an additional tax on top of everything else that’s paid, and it would hit low-income workers the worst.

So much for no middle class tax hike.

H/T: Vodkapundit

3 Responses to “Beware The Value-Added Tax”

  1. [...] here to read the rest: Below The Beltway » Blog Archive » Beware The Value-Added Tax google_ad_client = “pub-3658190228035086″; google_ad_slot = “1112917537”; google_ad_width = [...]

  2. Let's Be Free says:

    Would someone let me know when these folks are done extracting and destroying value, so we can start creating it again in the name of our and our childrens’ futures?

  3. Vast says:

    A VAT tax is a bad idea under our current system. The problem I have with consumption taxes is that they are generally bottom loaded taxes, in other words the poor generally end up paying the greater share of the tax burden that way.

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