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VAT Tax Proposed

I didn’t think we’d hear about it this year, but in the 2010 Forecast I told you that eventually a European style VAT tax would be implemented to cashflow our national debt and budget deficit.

Today, Paul Volker laid the ground work today in the story below from Reuters. Keep an eye on this as it is growing more likely.

Volcker: Taxes likely to rise eventually to tame deficit
NEW YORK
Tue Apr 6, 2010 7:57pm EDT

NEW YORK (Reuters) – The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.

Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax “was not as toxic an idea” as it has been in the past and also said a carbon or other energy-related tax may become necessary.

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. “If at the end of the day we need to raise taxes, we should raise taxes,” he said.