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:
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.
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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:
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.
