Shawn Tully of Fortune Magazine seems to think so. In fact, he predicts that a value added tax (VAT) is the only practical solution to the exploding of deficit spending that is part of Obama’s mammoth $3.9 trillion budget. Tully argues that there are really three options to get rid of our deficit:
- Economic Growth could raise the revenues to cover the deficit. However, government spending typically depresses economic growth, so Tully does not see this as viable.
- Reducing spending would obviously be the best solution, but is not foreseeable with the current administration and makeup of congress.
- A value-added tax, which is essentially a national sales tax (in addition to our income tax) would be able to feasibly cover the current deficit projections.
Since the closest thing to immortality is a government program, and the Democrats control the White House for at least another two years, a VAT is not inconceivable. What is inconceivable is the burden it will put on our economic system and on working families. If a VAT is implemented, it may be decades before we again see the prosperity in this country that we knew from 1980-2008.
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I think you mean 1983-2008. That’s when the effect of the Reagan tax cuts were first felt. Let’s not give Jimmah credit he doesn’t deserve.