Wednesday, April 21, 2010

President Obama suggests VAT is an option

Charles Krauthammer has long predicted that the Obama administration would turn to the European-style value-added tax (VAT) to pay for his ever-growing wish list of entitlement spending.  Last week the Senate passed a non-binding resolution expressing opposition to the U.S. adopting a VAT. The White House, through press secretary Robert Gibbs, has denied that the VAT was under consideration.  Today, in an interview with CNBC, the President had an opportunity to personally disavow the VAT, and not surprisingly, he punted:
President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, "I want to get a better picture of what our options are."

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding "sense of the Senate" resolution that calls the such a tax "a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery."

For days, White House spokesmen have said the president has not proposed and is not considering a VAT.

"I think I directly answered this the other day by saying that it wasn't something that the president had under consideration," White House press secretary Robert Gibbs told reporters shortly before Obama spoke with CNBC.

After the interview, White House deputy communications director Jen Psaki said nothing has changed and the White House is "not considering" a VAT.
The President's Bipartisan National Commission on Fiscal Responsibility and Reform is scheduled to report its recommendations on reducing the deficit by December 1, 2010, after the mid-term elections in November.  The White House will continue to dissemble about VAT until then, but my money is on a VAT recommendation from this blue ribbon commission.

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