Congressman Leonard Lance (R-NJ)

The presidential Commission on Fiscal Responsibility and Reform convened Tuesday at the White House to address what leaders of both parties agree is one of the greatest threats to the country’s economic future: the rising national debt.  Recently President Obama and members of his economic team voiced their support for a European-style value-added tax, or VAT, as one solution to our ever-growing 13 trillion dollar federal debt.  I flatly reject this suggestion.

A tax-and-spend economic policy that includes a value-added tax is precisely the wrong medicine for our ailing economy and will do little to get our deficits under control over the long-term.

Implementing a national VAT would add more taxes on to the shoulders of millions of working families that already feel they pay too much in federal taxes.  Just a little more than two weeks ago millions of Americans filed their annual federal income taxes.  In my home state of New Jersey, Garden State residents paid some of the Nation’s highest taxes. My constituents overwhelmingly believe that we pay too much — not too little — in federal taxes. The VAT is just another stealthy federal tax.

What’s more, the value-added tax is a proven job-killer that would burden our economy at the worst possible time.  Leading economists predict that even a relatively small VAT of 3 percent could destroy up 2.1 million jobs by its fifth year of implementation.  Americans should look no further than Greece where its 19 percent VAT has contributed to that country’s economic turmoil where it sits on the brink of bankruptcy.

As a member of the Congressional anti-VAT Caucus, I have called on Congress to speak in one voice in opposition to a value-added tax by introducing a resolution similar to Sen. John McCain’s anti-VAT resolution that passed the U.S. Senate recently by a vote of 84 to 13.

The solution to our national debt is not more government revenue but less government spending.

Since President Obama took office in January 2009 non-defense discretionary spending has increased by more than 84 percent.  While Congress and the President clearly must get serious about reducing our record debt and deficits, we must do so by cutting spending first, not adding more taxes onto the backs of the American taxpayers.

Instead of proposing tax increases like a value-added tax to reduce our federal debt, the President’s commission should focus on reducing out-of-control federal spending as a way of addressing the growing size of the federal deficit and returning our nation to a path of fiscal responsibility.

Congressman Leonard Lance is a member of the House anti-VAT Caucus, serves on the House Financial Services Committee and represents New Jersey’s Seventh Congressional District. For more information about Congressman Lance visit:

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