Obama administration already laying groundwork for VAT 

According to the New York Times, the Obama administration’s economic team is already running the numbers to prepare for the possibility of instituting a national value added tax:

A more aggressive approach would seek quick action on Social Security. Alice M. Rivlin, a former Clinton administration budget director and a member of the deficit-reduction panel, said that would represent a “confidence builder.”

But since any Social Security plan would probably preserve benefits for those nearing retirement, it would not help the administration achieve its goal of reducing the deficit to 3 percent of gross domestic product, from 10 percent, within a decade.

One way to reach that 3 percent goal, by the calculations of Mr. Obama’s economic team: a 5 percent value-added tax, which would generate enough revenue to simultaneously permit the reduction in corporate tax rates Republicans favor.

Come again? I don’t know whether the Times is just spitballing here or what, but the idea that administration could horse trade a tax on all Americans in exchange for cutting a corporations a break is insane — especially given heady Tea Party/anti-bailout sentiment on the right.

Americans for Tax Reform, meanwhile, wonders whether or not the possibility of introducing a VAT is the reason why Obama is trying to insidiously redefine his campaign tax pledge and hope no one notices:

The reported VAT calculations may explain President Obama’s recent attempts to alter the terms of his central campaign promise – a promise that no family making less than $250,000 per year would see “any form of tax increase”.
Twice in the past ten days, Obama has claimed his pledge applied only to income taxes. In his April 10 Weekly Radio Address, Obama said:
“And one thing we have not done is raise income taxes on families making less than $250,000.  That’s another promise we’ve kept.”
In a speech on the evening of April 15, Obama repeated the truncated promise:
“And one thing we haven’t done is raise income taxes on families making less than $250,000 a year — another promise that we kept.”

In the interest of transparency, Americans for Tax Reform respectfully asks President Obama to immediately release the reported VAT calculations or deny such calculations exist.

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Mark Hemingway

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