The VAT Threat Is Real...and Growing

Less than two weeks ago, this blog discussed how one of Obama's main political allies was arguing for a value-added tax Now Nancy Pelosi is adding her shrill voice to the mix. The left's agenda is rather clear. They need this giant new consumption tax if they want to keep making government bigger. This is a serious threat - especially since there are a handful of Republicans who would be tempted to go along with the idea because they foolishly think that a VAT will help exports (I explained why this is preposterous in a Wall Street Journal column, which can be read here). Here's a story from The Hill with some of the details:

A new value-added tax (VAT) is "on the table" to help the U.S. address its fiscal liabilities, House Speaker Nancy Pelosi (D-Calif.) said Monday night. ...The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product. Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes. "They get a tax off of that and they use that money to pay the healthcare for their own workers," Pelosi said, using the example of auto manufacturers. "So their cars coming into our country don't have a healthcare component cost. "Somewhere along the way, a value-added tax plays into this. Of course, we want to take down the healthcare cost, that's one part of it," the Speaker added. "But in the scheme of things, I think it's fair look at a value-added tax as well."