Team Obama already running the numbers on a VAT

April 19, 2010

Talk about burying the lede. This from the NYTimes and my pal John Harwood:

One way to reach that 3 percent [deficit-to-GDP] 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.

Me. Not only does it look like they are considering a VAT, the only offset would be lower corporate taxes. The whole thing would be a net tax increase, obviously. I mean, that is the whole point, despite all the talk about its efficient, pro-growth effects. A VAT of that size would raise $250-$300 billion a year in new tax revenue.

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Not sure why Obama should give a hoot what Republicans want, since the people don’t either. And I don’t like VAT on principle. Still…

Given a choice between that, cutting Defense Pork or asset-stripping Goldman Sachs to achieve realistic budget aims, some fool somewhere’s always gonna be crazy enough to pick VAT.

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