White House distances itself from Volcker (VAT) tax remarks

[The Northerner]

Source: Reuters

WASHINGTON, April 7 (Reuters) - The White House distanced itself on Wednesday from remarks by former Federal Reserve Chairman Paul Volcker that higher U.S. taxes might one day be needed to control the country's deficit.

Volcker, an influential adviser to President Barack Obama, made the remarks on Tuesday in New York.

"Mr. Volcker was speaking for himself and not the administration. The president has not proposed this idea nor is it under consideration," a White House official said.

"The president has passed historic tax cuts for middle-class families and continues to push for more tax cuts. The president is not proposing to cut the deficit at the expense of middle-class families," the official said.

The topic is a delicate one for Obama, a Democrat, with opposition Republicans likely to make taxes a key issue in November's congressional elections.

Volcker said that "if at the end of the day we need to raise taxes, we should raise taxes." The U.S. budget deficit is expected to reach $1.5 trillion in fiscal year 2010.

Read more: http://www.reuters.com/article/idUSN0714816320100407

[Taverner]

1. Every other country in the world has a VAT (read: federal sales tax)

Honestly, its crazy we don't

[shraby]

2. Taxes are like rabbits..they just multiply and never disappear.

If they put on a VAT, it would be in addition to the income tax, and all the other taxes middle America pays. They will not get rid of any current taxes.

[Taverner]

3. Things cost money

And that cost is going up. Its built into the system.

[SocialistLez]

5. No income tax, just vat

That's something I've heard others advocate for.

I'd also like a tax on financial transactions and a raise in the capital gains tax to about 30-35%.

[SharonAnn]

11. So that way people with low income pay high tax %, those with high income pay low tax %

Wow. What an idea. Replace all taxes with the most regressive taxes and make sure that the wealthy pay very little and the poor pay a whole lot.

[SocialistLez]

12. I would support

a VAT if it was something like the MA sales tax.

Purchases on clothes aren't taxed until you spend x amount of money.

We could exempt food, prescriptions, etc.

[dipsydoodle]

19. You've got that back to front.

VAT has the most effect on higher users / buyers of products and services - not low users.

[Lord Magus]

15. I say it's crazy that they do.

Sales taxes are a terrible thing. They invariably hit the poor hardest and the rich the least. If we need more taxes the way to go is raising the top income tax bracket.

[chill_wind]

4. Volcker has been consistently treated like the crazy uncle

hidden in the attic. Especially by Summers. Advisor-- somewhat. "Influential" --- not if he wasn't even allowed to pick most of the members on his own board (PERAB) without being run over by Summers.

This is just one more example of it.

[karynnj]

17. True, but here he was ambushed

The right has been speaking of the secret plan to enact a VAT - needed because of the "debt Obama ran up" for months. What he said was that it was "less toxic" than he thought it was in the past and he also mentioned there was likely going to be some carbon tax. Now, he was simply answering a question, but what this did was to create news all over the right blogosphere that Obama was going to institute this tax - and numbers like 12% (from other countries) was mentioned.

The WH HAD to distance itself from something that would hurt in November unless it was cleanly and clearly rejected as soon as possible. This is NOT to attack Volcker - this happens all the time and can happen to anyone willing to take questions. His answer as stated was not the problem. It was how it was spun.

[O is 44]

18. +1 n/t

[bluestateguy]

6. A VAT would be regressive

First raise taxes on the rich and corporations. A VAT should only be for a major emergency.

[billymayshere]

8. Bingo!

While we are at it how about a windfall profit tax on Exxon, the health insurance industry, and drug makers. A 20-30 percent increase on the top marginal tax wouldn't hurt either, let these rich assholes pay their way. They have benefited from the economic policy of the last 30 years, now it's time to pay up. I don't think I would be opposed to a VAT on purchases over $20000 real estate exempt.

[bluestateguy]

10. I have always supported a small tax on stock transactions

It would raise shitloads of revenue and tamp down on speculating.

[SocialistLez]

13. +1

I liked it when I heard about the "Let Wall Street Pay for the Restoration of Main Street Act" or something to that effect.

Of course it didn't go anywhere because the Dems and Repubs need "campaign donations."

[Flora]

9. VAT

Isn't a Valued Added Tax a progression tax. In other words, a tax on each component of an item as it is being made and in the end be a financial burden on the lower and middle class>

[karynnj]

16. that is qhy it's always been supported by the right to replace the income tax

I think that Obama needs to let the Bush tax cuts expire just as they were designed to. Then starting from there tax cuts can be made where needed. (Rather than letting Blanche Lincoln be the decider on what the estate tax should be. Let the Democrats write the bill as they want and let the Republicans know the default is that they are back to Clinton level.)

[BootinUp]

7. Not much choice really

Lets not do a Mondale.

[Rincewind]

14. How about a value added tax tax?

Charge a high tax on anyone who calls for a value added tax, a very regressive tax that would really hurt low and middle class people.