Wednesday, May 27, 2009

Get Ready to Open Your Wallets, America

Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

When Democrats start talking about "fundamental tax reform", it generally means "higher taxes" and, after months of profligate spending, they are now trying to find a way to present us with the tab. It seems that the only thing that's "off the table" is spending less money.

This is fiscal irresponsiblity at its worst; it will further grow a government that's already too big and reduce the means for economic expansion.

Sure, you'll be able to avoid this tax by not buying, but how will that effect an already struggling private sector? Alas, the more the private sector struggles to survive, the higher the unemployment figures will rise.

This would be a bad idea, even in good times. In times like these, it's like throwing gasoline on a fire.

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