Is a VAT Tax Back on the Table?

By Gerard Lameiro

It has been reported that President Obama might consider a VAT (or Value-Added Tax) - essentially a National Sales Tax. Recently, former Federal Reserve chairman Paul Volker brought up the topic of a VAT tax as a potential way to boost taxes. But others thought much differently, including the U.S. Senate that voted overwhelmingly 85-13 last week in a non-binding resolution to state that a VAT "is a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery." After that Senate vote, it sounded like this bad idea would go away. Now, we learn it might be back on the table. What is a VAT tax? What would a VAT tax really do to America and to our struggling economy? A VAT tax is a type of excise tax that works much like a National Sales Tax. However, it’s actually worse than a sales tax. A VAT tax charges a tax on a product at each stage of production, up to and including, the final sale to the consumer. [more...]