VAT Finds Favor with Debt Commission Co-Chairman Bowles

J.D. Foster / April 27, 2010

“I think there are many good arguments that you can make for a value added tax or a consumption tax, as opposed to a tax on wages” said National Commission on Fiscal Reform Co-Chairman Erskine Bowles on April 25 during a joint appearance with Co-Chair Alan Simpson on Fox News.

This is a chilling statement both for what it says about tax burdens and what it says about tax reform. One of the most poorly kept secrets in Washington is that the President’s so-called debt commission is supposed to find the formula for dressing up the value-added tax (VAT) to make it acceptable to the American people. This is like trying to fit ruby slippers to a sow. A good clue to the difficulty of the task is the President was careful to ensure the commission reported after the mid-term elections.

The only reason to consider the VAT is because the current tax system cannot support the massive spending surge the President has already pushed through let alone the additional spending he envisions or the entitlements wave to follow. Either he finds a way to finagle the VAT or he will be forced to pare spending back to previous levels. Either Washington puts a much bigger squeeze on the taxpayers, or Washington must go on a crash diet. It’s time to send the federal government to a fat farm. (more…)