Out of Money? Value-Added Tax Next Up

Curtis Dubay / May 27, 2009

Massive increases of spending by the Obama Administration, from the stimulus to its proposed budget, have created historically unprecedented large deficits that will push the nation’s debt level to unsustainable levels.

It was only a matter of time before the proponents of big government began their push to substantially increase the amount of revenue raised by the federal government to close these budget gaps and pay for other big-government priorities like nationalized healthcare.

The tax hike proposals offered so far—such as taxes on sugary drinks or tax hikes on alcoholic beverages—would not raise anywhere near enough revenue to make even a tiny dent in projected deficits.

And President Obama has made it impossible to get the revenue from the income tax because of his constraint that taxes cannot be raised on anyone making under $250,000 (even though he has already broken this pledge). There is just not enough income of the rich to squeeze to pay for all this spending.

That leaves something akin to a national sales tax as the only option.

Enter the Value Added Tax (VAT). From today’s Washington Post: (more…)