Speaker Pelosi Hints at Massive Tax Hike

Curtis Dubay / October 06, 2009

Speaker Nancy Pelosi joined a growing liberal chorus calling for a massive tax hike through the implementation of a value added tax (VAT). A VAT is similar to a national sales tax. Businesses would pay it at each stage of the production process and consumers at the cash register. European countries have had VATs for years.

As we pointed out earlier this year, Congress should not pass a VAT to pay for a government takeover of the health care system or expand the size of government. If it does so, it will be a massive tax hike:

Just a 1 percent VAT on all goods and services in the economy would raise $63 billion for Congress to spend each year. Some suggest the VAT rate should be set as high as 20 percent. At that rate, a VAT that covers all goods and services in the economy – including food, clothing, housing, and health care – would collect an additional $1,260 billion a year and cost every U.S. household $10,680 annually. (more…)