Opposition to VAT Mounting in House of Representatives
Curtis Dubay /
The threat of a value added tax (VAT) in the United States is growing steadily. Despite protesting that it is not something he is considering, President Obama refused to rule out a VAT completely, much as David Cameron and Nick Klegg, the new leaders of the U.K. refused to rule out an increase in the UK VAT during the campaign. Of course, one day after taking office they were laying the groundwork for an increase in the UK VAT to 20 percent. That would be a 5 percentage point increase from the current 15 percent rate. Not surprisingly, Obama has already said he would consider it if his debt commission finds it necessary.
The VAT threat will lurk in dark corners until either Congress brings the deficit under control or Obama is ready to bring it out into the open. Until then, murmurings will continue that a VAT is the only way to solve our fiscal mess. Unfortunately, it appears at least to have been part of President Obama’s plan all along to drive spending up rapidly – to “glut the beast” – to make a VAT seem inevitable. (more…)