Bloomberg: Podesta Says Value-Added Tax ‘More Plausible’ as Deficits Grow

Posted by Kendall Harmon

John Podesta compared the nation’s current budget crisis to the situation former President Bill Clinton faced in 1993 and said some form of a value-added tax is “more plausible today than it ever has been.”

“There’s going to have to be revenue in this budget,” said Podesta, Clinton’s former chief of staff and co-chairman of President Barack Obama’s transition team, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing today.

A so-called consumption tax would “create a balance” with European and Japanese economies and “could potentially have a substantial effect on competitiveness,” said Podesta. Value- added taxes in Europe and Japan encourage savings by taxing consumption.

Podesta said such a tax may be regressive, but can be balanced by exempting some products and using “the money to support low-wage workers.”

Read the whole thing.

Filed under: * Economics, PoliticsEconomyTaxesThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentBudgetThe National Deficit

Posted September 26, 2009 at 5:22 pm [Printer Friendly] [Print w/ comments]

1. Jeffersonian wrote:

Podesta said such a tax may be regressive, but can be balanced by exempting some products and using “the money to support low-wage workers.”

There’s the lede, right there.  He who robs Peter to pay Paul can definitely count on Paul’s vote come election day.

September 26, 5:58 pm | [comment link]
2. Dilbertnomore wrote:

We should all take very good notes of the events that comprise our contemporary history. We’ll need them as we try to explain to our grandchildren how we enabled the gross transformation of our nation from a constitutional republic based on limited central government and individual liberty to the ‘workers paradise’ being created for us by the public servants we elected to carry out our wishes. I’m betting we have a very tough time persuading our grandchildren we acted wisely.

September 26, 10:39 pm | [comment link]
3. tgs wrote:

This is just more of the same old government script - create a crisis and use it to push through a radical agenda. A much better solution is to simply stop spending and printing so much money. The best way to do that - KILL THE FED!

September 27, 10:00 am | [comment link]
4. Chris wrote:

That people of Podesta’s “just tax them more” ilk and their willing accomplices in the media like Al Hunt, who never met a government expansionist he didn’t like, are still able to command the pages of Bloomberg with this pabulum shows me that the MSM is as out of touch as ever with the rest of America….

September 27, 10:08 am | [comment link]
5. Archer_of_the_Forest wrote:

I think looking at going after a VAT on imports would help the trade deficit tremendously. Most countries have VAT system on imports, especially China. The way China has it rigged up, its tantamount to an import tax, In other words, it is a tax Americans have to pay to export out goods to China, but a tax the Chinese don’t have to pay on goods they they send to the USA. I am not 100 percent convinced that is a way to help out trade deficit, but I think it bears looking into.

September 27, 5:58 pm | [comment link]
6. billqs wrote:

A consumption based tax makes sense, provided that the current income tax was abolished.  This, they will never do.

September 27, 11:00 pm | [comment link]
7. palagious wrote: though a consumption tax would have no effect on demand and further cripple the ability to create jobs.

September 28, 8:42 am | [comment link]
8. Pageantmaster ن wrote:

The problem with a value added tax [as with sales taxes] is that it is regressive; it targets the poorest.  That is it hits hardest on those who have no option but to spend almost all of their income on purchasing the essentials of life.

September 28, 9:04 am | [comment link]
9. Bill C wrote:

I understand the need, however to increase taxes during this period of high unemployment, and financial crisis makes little sense.  There are far more obvious sources of funding, one very obvious one being cutting wasteful government spending, putting wholesale health care reform off until the crisis has passed and eliminating the enormous drain on our resources that illegal aliens provide.  Just look at the state California is in.

September 28, 5:47 pm | [comment link]
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