The WaPo discovers that a value-added tax would be one way to pay for Obama’s healthcare reform plan. (White House healthcare adviser Ezekiel Emanuel is a big VAT fan and even wrote a book about it.) Len Burman of the Tax Policy Center describes a VAT this way (in a different report):
A VAT is a tax on consumption, similar to sales taxes levied by states, except that it is collected in stages from each business that contributes to the production and sale of consumer goods. It is universal in the rest of the industrialized world and generally thought to be relatively easy to administer and for businesses to comply with.
Burman, quoted in the article, thinks a 25 percent VAT could plug the government’s budget hole, while one of 10-15 percent could pay for healthcare reform, the story also notes. Burman adds that one of the complaints “leveled at the VAT is that it would be a money machine and fuel the growth of government.” To a great degree, a VAT would be hidden tax since it would incorporated into what we buy.
Also consider this: These estimate of how expensive Obamacare might be could be way low. Indeed, the Urban Institute speculated that the ten-year cost might be close to $2 trillion rather than $1 trillion. That VAT might need to be way higher, gang. Either way, somebody in that 95 percent of us who are supposed to get a tax cut would be paying higher taxes.