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.
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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