Tax Lawyer's Blog

We recently reported that former Chairman of the Federal Reserve, Paul Volcker, thinks Congress nees to impose a value added tax (VAT) on American taxpayers in order to pay for the bailouts and healthcare reform.

Now the Wall Street Journal reports that Speaker of the House Nancy Pelosi is favor of a VAT:

Candor about taxes is rare in Washington, so when House Speaker Nancy Pelosi admits that Democrats may have to impose a huge new tax on the middle class to fund their spending ambitions, believe her.

Speaking with PBS’s Charlie Rose on Monday, Mrs. Pelosi mused publicly about the rising possibility of enacting a value-added tax, or VAT, as part of broader tax reform. “Somewhere along the way, a value-added tax plays into this,” she said. “Of course, we want to take down the health-care cost, that’s one part of it. But in the scheme of things, I think it’s fair to look at a value-added tax as well.”

The Journal rightly observes that VAT taxes are a backdoor tax in that they are easier for politicians to levy on taxpayers without having to suffer political consequences:

The allure of a VAT for politicians is that it applies to every level of production or service, rakes in piles of money, and is largely hidden from those who ultimately pay it—namely, consumers.

You can’t say you weren’t warned. Obama and the Democrats know they cannot fund healthcare reform and reduce the deficit without taxing ordinary Americans. We already see them searching for sneaky ways to indirectly tax the middle class.

So much for transparency.

Related Posts:

• Taxing the Rich to Reduce the Deficits: Is it Enough?
• Obama Will Raise Taxes on the Middle-Class, Financial Times Says
• Obama Floats Trial Balloon of Middle-Class Tax Hikes, Balloon Bursts
• Tax Increase Strategy: Divert the Public’s Attention
• Backdoor Taxes Part Deux

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